Performance against Quota and the Call Selection Decision

Abstract

What level of quota should be imposed on the salesperson? The author proposes that when performance against quota is a significant factor in a salesperson's compensation, that salesperson's call selection decision is influenced by his or her position in relation to quota. That is, quota acts as a reference point that influences the salesperson's behavior. Using recent advances in behavioral decision theory, the author proposes that (1) salespersons who perceive themselves to have no chance to attain quota are more likely to make risk averse decisions, (2) salespersons who have made quota are more likely to make risk seeking decisions, and (3) salespersons who have a chance to make quota select the alternative that affords the best opportunity of making quota. These propositions were tested in four studies, three involving hypothetical choice and one involving decisions made in a computerized, behavioral game theoretic experiment. The results indicate that the quota level a salesperson faces can significantly influence his or her decisions.