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Motivating salespeople: What type of bonus is best?

Harvard University researchers investigated whether conditional or unconditional bonuses served as better motivators for sales teams.

By Katie Kuehner-Hebert | Updated on October 06, 2017
Conditional bonuses could potentially demotivate salespeople over time. (Photo: Shutterstock)

Which type of bonus best motivates salespeople – an unconditional reward, a conditional bonus based on meeting performance goals, or a conditional bonus in the form of being punitive by withholding or even taking away bonuses if goals are not met?

For the sales force of an Indian manufacturer of durable goods, conditional bonuses work better than unconditional – but contrary to what their management had predicted, punitive damages did not yield better results, according to a randomized field experiment by Harvard University researchers, Doug J. Chung and Das Narayandas.

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Katie Kuehner-Hebert

Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.

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