Skip to main content

Remuneration Policies in the Marketing Area: Behavioural vs. Performance Measures

Buy Article:

$55.00 plus tax (Refund Policy)


This paper analyses the design of control systems and compensation plans in the marketing area of the firm, using the framework proposed by agency theory. Recent research suggests the need to focus the research agenda on compensation policies in particular functional areas and jobs. Following this recommendation, our purpose is to isolate the marketing and sales area in order to concentrate our attention on the specificity of its compensation policies. The central idea is that, in a context where it is easy to supervise workers' or managers' effort, remuneration will be based on employee behaviour and will take the form of a fixed salary. However, if the effort is difficult to control, the firm will establish a compensation system based on the result obtained by the agent.

Our results show that the probability of receiving a variable salary decreases with the size of the firm (because of the scale economies associated with the control process) and job tenure (the asymmetry of information is reduced). However, it increases with the complexity of the task and the foreign ownership of the firm (which makes supervision more difficult). The results also confirm some differences in the remuneration systems adopted in the marketing and sales area, as well as between small and large firms.


Document Type: Research Article


Publication date: 2000-11-01

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more