TY - JOUR
T1 - Do agents game their agents’ behavior? Evidence from sales managers
AU - Benson, Alan
N1 - Publisher Copyright:
© 2015 by The University of Chicago. All rights reserved.
PY - 2015/10/1
Y1 - 2015/10/1
N2 - This paper examines how sales managers, acting as agents of the firm, game the staffing and incentives of their subordinates. Sales managers on a quota’s cusp have a unique personal incentive to retain and lower quotas for poor-performing subordinates, allowing one to isolate a manager’s interest from the firm’s. Using micro-data from 244 firms that subscribe to a cloud-based service for processing sales compensation, I estimate that 13%-15% of both quota adjustments and retentions among poor performers are explained by managers’ incentives around quotas. Although a minority of poor performers are subsequently terminated or transferred, most are retained indefinitely.
AB - This paper examines how sales managers, acting as agents of the firm, game the staffing and incentives of their subordinates. Sales managers on a quota’s cusp have a unique personal incentive to retain and lower quotas for poor-performing subordinates, allowing one to isolate a manager’s interest from the firm’s. Using micro-data from 244 firms that subscribe to a cloud-based service for processing sales compensation, I estimate that 13%-15% of both quota adjustments and retentions among poor performers are explained by managers’ incentives around quotas. Although a minority of poor performers are subsequently terminated or transferred, most are retained indefinitely.
UR - http://www.scopus.com/inward/record.url?scp=84941888073&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84941888073&partnerID=8YFLogxK
U2 - 10.1086/681107
DO - 10.1086/681107
M3 - Article
AN - SCOPUS:84941888073
SN - 0734-306X
VL - 33
SP - 863
EP - 890
JO - Journal of Labor Economics
JF - Journal of Labor Economics
IS - 4
ER -