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The Myth of the Salesperson: Intended and Unintended Consequences of Product-Specific Sales Incentives

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Abstract

Product-specific sales incentives (PSIs), or "spiffs," have instigated conflict in business and sales for more than fifty years. PSIs are exactly what they sound like: incentives offered by manufacturers to salespeople to encourage them to promote certain products above those of competitors. PSIs have provoked considerable controversy. They are sometimes likened to "bribes," in that their purpose is to motivate salespeople to offer advice that might contradict what they would otherwise recommend. If a salesperson's job is to sell an array of products, how is it equitable for him or her to receive additional compensation for selling certain products above others? In addition, how are we to justify the bias that the presence of PSIs introduces into the selling process. There is concern that this causes negative consequences for stakeholders, including manufacturers, retailers, salespeople, and, of course, customers. How does this affect the competitive process?The research conducted explores the reaction to PSIs by people of different ages. It reveals a correlation between age, education, and reaction to PSIs. The findings correspond with the Josephson Institute of Ethics report, which found that younger adults tend to exhibit higher tolerance for unethical behavior. Examination of PSIs, like other sales incentives, reveals intentional and unintentional consequences to a wide array of stakeholders. The research indicates that there is value inherent in considering both the propriety and manner of implementation of sales incentives, such as PSIs.

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Authors and Affiliations

  1. Hofstra University, 7 1/2 Carlton Avenue, Port Washington, NY, 11050, U.S.A.

    Tara J. Radin

  2. Manhattan College, 22 Bayview Avenue, Port Washington, NY, 11050, U.S.A.

    Robert J. Oppenheimer

Authors
  1. Tara J. Radin
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  2. Robert J. Oppenheimer
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Radin, T.J., Oppenheimer, R.J. The Myth of the Salesperson: Intended and Unintended Consequences of Product-Specific Sales Incentives. Journal of Business Ethics 36, 79–92 (2002). https://doi.org/10.1023/A:1014286110651

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