Human Resources Management Commons^™

Motivating Increased Sales: Variable Or Fixed Compensation Structure?, Kevin Chalk

Engaged Management ReView

This critically appraised topic (CAT) examines the question of whether a variable compensation structure helps motivate increased sales more than a fixed compensation structure. The analysis is based on peer reviewed articles focused on compensation and incentive structures and performance measurement. The findings suggest that variable compensation can increase sales performance, but only to a certain degree. A proper incentive structure would be a combination of both variable and fixed components.