Do Activity-Based Incentive Plans Work? Evidence from a Large-Scale Field Intervention

Many firms incorporate activity-based incentive (ABI) compensation into their pay plans. These ABIs are based on salespeople’s activity measures derived from their call reports. Despite their prevalence and theory-based expectations, there is a distinct lack of empirical work studying the sales productivity effects of ABI pay. With the cooperation of a large pharmaceutical firm, the authors conducted a three-year-long intervention based on a...