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Explaining Sales Pay Strategy Using Agency, Transaction Cost and Resource Dependence Theories

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  • Michel Tremblay
  • Jérôme Côté
  • David B. Balkin

Abstract

ABSTRACT The purpose of this study is to investigate, using data gathered from 325 French‐Canadian organizations, the influence of key constructs related to agency, transaction cost and resource dependence theories on the proportion of salary in sales compensation. Usefulness analysis showed that performance information (9 per cent), uncertainty (8 per cent) and dependence resource (5 per cent) constructs have a significant incremental contribution to sales compensation. Regarding specific hypothesis tests, results of full model show that the capacity to observe behaviour, team sales and financial resources offered are associated with an increased use of salary pay. In contrast, adaptability of product/service‐related resources, salesforce experience and high marginal salesforce productivity are associated with decreased use of the salary component. However, the results of full model have failed to support the direction or influence of relationships between programmability, span of control, market and selling uncertainty, the predominance of salespeople and TCA measures on proportion of salary. The results support the argument that integration of multiple theoretical perspectives better explains pay policy.

Suggested Citation

  • Michel Tremblay & Jérôme Côté & David B. Balkin, 2003. "Explaining Sales Pay Strategy Using Agency, Transaction Cost and Resource Dependence Theories," Journal of Management Studies, Wiley Blackwell, vol. 40(7), pages 1651-1682, November.
    • Handle: RePEc:bla:jomstd:v:40:y:2003:i:7:p:1651-1682
    DOI: 10.1111/1467-6486.00395
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    Cited by:

    1. Ankur Shukla & N. Sivasankaran & Shilpee A Dasgupta, 2018. "Do Board Characteristics Impact the Market Performance of Indian Banks?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(11), pages 1365-1383, November.
    2. Ankur Shukla & Narayanasamy Sivasankaran & Prakash Singh & Ayyaluswamy Kanagaraj & Shibashish Chakraborty, 2021. "Do Women Directors Impact the Risk and Return of Indian Banks?," IIM Kozhikode Society & Management Review, , vol. 10(1), pages 44-65, January.
    3. Boulay, Jacques & Caemmerer, Barbara & Evanschitzky, Heiner & Duniach, Krista, 2020. "Multi-unit franchising from franchisor and franchisee perspectives: Antecedents, performance outcomes, and the optimal mini-chain size," Journal of Business Research, Elsevier, vol. 113(C), pages 49-58.
    4. Ng, Stephen C.H. & Rungtusanatham, Johnny M. & Zhao, Xiande & Lee, T.S., 2015. "Examining process management via the lens of exploitation and exploration: Reconceptualization and scale development," International Journal of Production Economics, Elsevier, vol. 163(C), pages 1-15.
    5. Eungoo Kang & Hyoyoung Lee, 2021. "Employee Compensation Strategy as Sustainable Competitive Advantage for HR Education Practitioners," Sustainability, MDPI, vol. 13(3), pages 1-23, January.

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