Group 5

Perspective on
Behavior-Based Vs Outcome-Based
Salesforce control system

A control system is an organizations set of procedures for monitoring, directing, evaluating, and
compensating its employees. Such systems affects the employee behavior ideally for the welfare of
both the firm and employee. Salesforce control systems can be classified into those monitoring the
finla outcoes of a process and those monitoring individual stages (Behavior) in the process. Many
salesforce control systems are a mix of approaches, containing elements of both behavior and
outcome based strategies.

Historically, salesforce managers and the performance appraisal systems used by managers have
tended to emphasize outcomes rather than behaviors due to the availability of simple, seemingly
equitable measures of sales volume. By its nature selling is an independent occupation and due to
the difficulty in measuring other individual forces, it is used as a measure as outcome based control.
But lack of attention to customer satisfaction, primary emphasis on the more profitable or
alternatively, easy to sell items in product line, can harm the organization in the long run. Managers
can avoid these problems by using multiple indicators of outcomes rather than one or two simple
indicators, accounting for complex systems as a trade-off.

Behavior-based control systems address the process of selling rather than simply the outcomes.
Complexity and subjectivity of the evaluation are the potential disadvantages of this system. Also
they strain managements ability to collect, sift and combine the information. But it ensures control
on the hand of the manager and eliminates inequities that arise in using simple output measures.

Some of the major theoretical approaches relevant to the salesforce control problems are
1. Agency theory,
2. Organization theory,
3. Ttransaction cost analysis,
4. Cognitive evaluation theory

The variables identified as moderating a preference for outcome or behavior control are categorized
as environmental, firm, and individual influences. Generally, environmental uncertainty, difficulty in
the quantification or translation of sales outcomes, and risk averse, firm-specialized, or intrinsically
motivated salespeople argue for behavior control whereas small firms with high relative
measurement costs and direct links between sales effort and performance argue for outcome
control. Studies are examined indicating the incidence of these practices among firms.

Based on set of propositions for the purpose of stimulating research in the area of sales control,
suggestions can be framed as
1. Control system strategies
2. Salesperson cognitions and capabilities
3. Salesperson affects and attitudes
Group 5

4. Salesperson motivation
5. Salesperson behavorial strategies
6. Salesperson performance

The more objective the measure, and more costlythe behavior measurement process, more control
is recommended. Inaccessible or inaccurate output measure argue for behavior control. Ideally, the
four theories gives us an idea about how control systems influence salesperson, even though it has
potential second order effects.