Incentivizing of inside sales units — the interplay of incentive types and unit structures

Abstract

Although companies are increasingly deploying inside sales units, knowledge is scarce regarding how to effectively incentivize them. In addressing this neglect, this study draws on network theory to scrutinize how various unit and individual financial and non-financial incentives affect inside sales units’ performance. In addition, the authors examine the contingent roles of two unit-level network measures, density and centralization. Using data from 366 salespeople working in 118 inside sales units, the authors empirically test the predicted relationships. Results reveal that unit incentives are positively related to unit performance, whereas individual incentives notably have a negative relationship with unit performance. Results further reveal that both density and centralization influence the incentive–unit performance relationships. Overall, findings indicate that the effects of various incentives in the inside sales unit context differ from those in other contexts, resulting in important implications for managers.