Dimensions and contingent effects of variable compensation system changes

Compensation systems are regarded as one of the best incentives to motivate salespeople. Organizations aim to align compensation incentives with organizational strategies in order to integrate top-level initiatives with ground-floor implementation, often requiring periodic adjustments to reflect fluctuating market conditions. What is not known, however, is to what extent variable compensation system changes (VCSCs) impact the attitudinal and performance outcomes of salespeople. Using a sample of 306 business-to-business salespeople, the authors study the conditional effects of VCSC. Specifically, the authors conceptualize a multi-dimensional assessment of VCSC - frequency, magnitude, and implementation speed - and investigate each dimension's effect on salesperson job satisfaction and performance, contingent upon two environmental conditions-technological turbulence and competitive intensity. Findings show a mixture of accentuating and attenuating effects on both outcomes, allowing future researchers to gain a better understanding of under which conditions VCSCs impact salesperson attitudes and performance.