Treating top salespeople like superstars: the role of an informal sales climate in boosting sales output

Abstract

The authors examine the concept of an informal sales climate—a work environment with informal rewards in the form of recognition, respect, and status for salespeople producing high sales numbers—and explore its effects as an informal control mechanism in driving sales outcomes. Using a two-level model with objective sales data from 626 salespeople working in 68 organizational units, they empirically assess its effects in relation to analogous formal controls, that is, formal methods implemented by the organization to also evaluate and reward salespeople’s sales output. Further, the study explores contingencies—specifically the role of transformational leadership and the size of the organizational unit—in determining the efficacy of said organizational climate. Results show that an informal sales climate, as an informal control, does indeed make a unique contribution toward increasing salespeople’s sales output, above and beyond the impact of formal controls. The two control mechanisms, however, do not interact with each other. Transformational leadership greatly enhances the positive effect of an informal sales climate, as does the size of the organizational unit. In demonstrating the importance of this organizational climate, the study justifies measuring it and provides a scale that can be used for this purpose.