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Managing Salesforce Compensation During the Growth Stage: A Financial

Modelling Approach

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DOI: 10.1177/0886368716657620

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Managing Salesforce Compensation

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DOI: 10.1177/0886368716657620

Modelling Approach cbr.sagepub.com

Pankaj M. Madhani, Professor, ICFAI Business School (IBS)

Abstract
The salesforce is a strategic lever of the sales organization for improving sales growth, market share and profitability. Various
attributes of salesforce such as its size and structure are key components of salesforce compensation design. This research
focuses on this direction and provides methodology to indentify optimal size of salesforce and the right balance between
generalized and specialized sales roles in the salesforce structure. The size and structure of the salesforce significantly impact
the operation of salesforce in terms of efficiency and effectiveness and hence it needs to change as the sales organization
enters the growth stage. It is mainly because these attributes have highest impact on overall success of sales organization in
the growth stage compared to other stages of business life cycle. However, designing an optimal salesforce size and structure
is an intricate task. This study looks into this area and develops various matrices and analytical tools to determine optimal
salesforce size and structure during growth stage. At optimal salesforce size and corresponding structure, sales organization
is able to attract, retain and motivate the ‘right’ type of sales people, build long term relationship with customers, gain
market share, enhance profitability and thus maximize the value of sales organization. Research develops a financial model
and provides a numerical illustration to calculate optimal salesforce size and structure.

Keywords
salesforce size, generalist salesforce, specialist salesforce, salesforce structure, growth stage, compensation

The salesforce represents an expensive and important human
resource (HR) asset for a sales organization as it is a large
percentage of total costs for most sales organizations and has
a major impact on both top line and bottom line perfor-
mances of sales organizations. The overall sales compensa-
tion cost of a sales organization depends on salesforce size
(i.e., large vs. small salesforce) as well as structure (i.e., gen-
eralist vs. specialist salesforce). Salesforce size and structure
are key dimensions of salesforce compensation in sales
organizations and significantly affect the successful opera-
tion of a salesforce in terms of efficiency and effectiveness.
The most practical way to develop a sales compensation
estimate is to work backward using as the starting point the
total size of the salesforce for the level of sales performance
desired. After looking into a host of the factors, a sales orga-
nization then carefully determines the salesforce structure.
In the process of salesforce structure identification, sales
organizations determine whether they want to have more
generalist or more specialist salesforce after considering
advantages and disadvantages of each option. Generalist
salesforce do all selling activities and all products to all cus-
tomers while specialist salesforce do certain selling activi-
ties for certain products for certain customers. During the
growth stage, salesforce structure decisions are driven by a
desire to increase salesforce effectiveness with higher degree
of specialization. Hence, during the growth stage, sales
organizations need to design salesforce size and structure to
ensure that it supports the salesforce strategy and the organi-
zation’s strategic goals. This involves finding the right size
of salesforce and the right balance between generalist and
specialist salesforce. This research focuses on this direction
and provides methodology to identify the optimal size and
structure of the salesforce during the growth stage.
Role of Salesforce: Efficiency and
Effectiveness Focus
Traditionally, the basic task of a salesforce is sales calls
directed at the marketplace. This activity is important as the
market responds to such sales calls by buying the products
and services offered by the sales organization. Accordingly,
efficiency monitors the sales process and reflects the rate at
Corresponding Author:
Pankaj M. Madhani, ICFAI Business School (IBS), IBS House, Opposite
AUDA Lake, Near Science City, Off SG Road, Ahmedabad, Gujrat
380060, India.
Email: pmadhani@iit.edu

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2 Compensation & Benefits Review 
Figure 1.  Optimal salesforce size and structure: Efficiency
and effectiveness relationship.
Source. Model developed by the author.
which they convert salesforce investment into calls. A
highly efficient salesforce has a high level of call activity
for its resource investment. Effectiveness measures sales
performance and represents the buyer’s response to the call-
ing level of the selling organization. A highly effective
salesforce has high impact per call; it generates high levels
of sales for the call investment.
To better understand the critical role of salesforce size
and structure in the sales organization, efficiency and
effectiveness are conceptualized as a closed loop: sales-
force effectiveness focus on particular tasks, measures
sales efforts as well as sales performance, which in turn
generates requirements to accomplish such defined tasks
in shortest time with minimal investment of resources, to
ensure that those activities are completed in the best way.
This push comes from salesforce efficiency and as such it
further strengthens effectiveness (Figure 1).
Salesforce efficiency is considered as an internal mea-
sure of process operations, while salesforce effectiveness
is considered as an external measure of process output.
Salesforce effectiveness refers to what particular tasks
are performed with the ultimate goal of driving revenue,
while salesforce efficiency refers to how best those activ-
ities are completed in a given setting. In short, salesforce
effectiveness is the quality of the actions, while sales-
force efficiency is the speed of the actions.
Salesforce Size and Structure:
Impact on Compensation Cost
The salesforce is a sales generator as well as a cost genera-
tor, influencing not only the cost of the salesforce but also
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the variable expenses associated with sales volume. The
salesforce size affects customers, salespeople and the over-
all sales organization. The size of the salesforce affects the
salesforce morale, compensation methods used by the
sales organization and ultimately the overall salesforce
management. The salesforce is a long-term investment for
the organization and cannot be upsized and downsized
quickly as variable resources. It takes longer for the orga-
nization to hire and train good salespeople, and it also takes
time for salespeople to build relationships with customers.
A salesforce that is of the right size are challenged, but not
overworked, connect with customers effectively, sales
compensation costs are reasonable, and sales as well as
profitability of the organization is strong.
The relationship between salesforce size and revenue
depends on various factors, many of which are difficult to
control and predict. Some of these factors are internal as
well as external to the salesforce. Internal factors include
the launch of a new product or exit from a key market.
Other factors originate within the salesforce. The skills,
knowledge and capabilities of salespeople, for example,
and the effectiveness of the salesforce systems, programs
and processes that the sales organization provides all affect
sales. External factors include customer needs or change in
their buying processes, competitive intensity (change in the
size and structure of their salesforce) and the swings in eco-
nomic outlook, for example, are all hard to forecast yet can
affect the ability of a salesforce to create sales.
External and internal drivers create constant new chal-
lenges and opportunities for sales organizations. Because it
is impossible to predict the precise effect of these complexi-
ties on a salesforce’s ability to generate revenues, sales orga-
nizations often use decision rules that rely on common sense
rather than precise analytics to determine how large their
salesforce should be.1 However, the salesforce size that is
finally selected must be good for its customers (how much
time is spent with those customers), sales employees (as
they are motivated yet not overstretched) as well as the sales
organizations (how many customers and prospects the sales-
force can cover and how much sales effort products receive).
Sizing is not a simple task for organizations, since the pri-
mary goal of sizing strategy is not simply to reduce or mini-
mize salesforce capacity but also to build a more productive
and effective organization. Salesforce size also varies,
reflecting tradeoffs the sales organizations must make
between selling efficiency and effectiveness.
Along with salesforce size, sales organizations need to
spend a significant amount of time in evaluating and rede-
signing the salesforce structure to ensure that it supports
sales strategies and strategic goals of the organization.
Often, this involves finding the right balance between gen-
eralized and specialized sales roles in the salesforce struc-
ture. Generalist salesforce usually have to spend time on
marketing, planning and reporting. Generalist salesforce
Madhani 3
Figure 2.  Salesforce size, structure and compensation cost.
Source. Figure developed by the author.
sells the firm’s entire product line to all of the accounts and
prospects in their territory. The salesperson is responsible
for all selling activity in the territory. Such a salesforce usu-
ally generates higher call activity and more face-to-face
selling effort than one with a specialist salesforce.
A specialist salesforce is normally output driven and
can focus more narrowly on selling. However, specializa-
tion also creates some risk for a business. If the markets
in which a specialist focuses weaken, it may be very dif-
ficult to adapt and redeploy the specialist salesforce
structure quickly. Generalist salesforce structures usually
provide greater flexibility than do specialized structures.
As generalist salesforce are familiar with all the products,
markets and selling tasks, their effort can be redeployed
more quickly as markets and business strategies evolve.
While adopting salesforce specialization and evaluating
its potential benefits and risks, the need for flexibility
should always be considered.
Salesforce size and structure (degree of specialization)
are key levers of sales organization profitability during the
growth stage. A larger salesforce composed of salespeople
who specialize by product or market is more effective, cre-
ates higher revenues but costs more than a smaller, gener-
alist salesforce. In comparison to a generalist salesforce, a
specialist salesforce is expensive and also requires larger
size. Hence, relying on optimal mix of generalist and spe-
cialist salesforce provides both efficiency and effective-
ness of sales. Figure 2 shows how salesforce size and
structure (i.e., generalist vs. specialist salesforce) influence
compensation costs of a sales organization.
Salesforce Sizing During the
Growth Stage: Conservative Versus
Aggressive Approach
During the growth stage as business grows, the salesforce
have to call on prospects in a broader set of markets as
their product portfolio expands. Hence, in this stage
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Figure 3.  Growth opportunity and salesforce expansion: An
optimal scenario.
Source. Matrix developed by the author.
salesforce sizing issues remain highly prominent as the
sales organization expands. During the beginning of the
growth stage when uncertainty is low, growth opportuni-
ties are high and the product has achieved traction and
has been accepted in the market, the salesforce can be
hired as rapidly as the sales organization’s financial con-
straints will allow. Sales come in relatively easily in the
growth stage, and salespeople are motivated and full of
optimism. Hence, during the period of higher growth, an
aggressive approach is optimal and the organization
should ramp up the salesforce as early as possible to max-
imize profitability (Figure 3).
A meta-analysis of econometric studies of personal
selling sales response relationships indicates that the
mean personal selling sales elasticity (corrected for meth-
odological biases) is significantly larger than the mean
advertising–sales elasticity.2 Hence, it may be beneficial
for a sales organization to spend aggressively on the high-
elasticity marketing variable such as salesforce early in
the growth stage to build high market share, to maintain
market dominance and to secure long-term payoff.
Aggressive investment in enhancing salesforce size dur-
ing the growth stage allows organizations to capitalize on
early opportunities, forestall competitors and build a
strong base of loyal customers and increase sales and
profits quickly.
Hence, smart sales organizations increase salesforce
investment as early success signals emerge. During the
growth stage many sales organizations continue to main-
tain a smaller salesforce as they take a conservative risk-
averse strategy approach and are leaving money on the
table by failing to deploy sufficient salespeople. They
view the salesforce as a cost item that needs to be justi-
fied by immediate sales rather than an investment that
4 Compensation & Benefits Review 
Figure 4.  Salesforce sizing: Undersizing versus oversizing
errors.
Source. Matrix developed by the author.
drives sales. As a result, they undersize their salesforce
and miss out growth opportunity.3
In the growth stage, the business risk of the organiza-
tion will magnify if any wrong decision is taken for sales-
force sizing. During the growth stage, if the salesforce is
too small, it cannot serve the needs of customers effec-
tively, become overstretched and the organization will
miss out on considerable opportunities. However, if the
salesforce is too large, it can become an annoyance to
customers, salespeople probably are not challenged, the
compensation and benefit costs of maintaining the sales-
force will be too high and the productivity of the organi-
zation will be low.4
Two types of salesforce sizing errors are common in
sales organizations. First, if salesforce growth is aggres-
sive, but the market opportunity is small, error of sales-
force oversizing occurs (also called type I error). To
rectify this sizing error, the sales organization will have to
reduce its salesforce size to increase the efficiency of the
salesforce. Second, if salesforce growth is conservative,
but the market opportunity is large, error of salesforce
undersizing occurs (also called type II error). This type of
sizing error can result in significant loss of market oppor-
tunity, a substantial forfeiture of sales and profits and, in
the long term, reduced growth opportunity for the sales
organization. In this type of sizing error, the sales organi-
zation will need to enhance salesforce size to increase the
effectiveness of the salesforce; otherwise, it may forfeit
its best chance to become a market leader. The sales and
market loss suffered when a sales organization initially
undersizes its salesforce has a lasting impact on its ability
to grow its sales and reach peak market share (Figure 4).
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Having a salesforce of the right size is critical for sales
organizations in the growth stage of the business life
cycle. However, as discussed earlier many organizations
are too conservative in increasing their salesforce size
even when clear success signals emerge. Hence, they
often make major mistakes in sizing their salesforce.
Such organizations increase salesforce size gradually and
continue to understaff in the growth stage, and as a result,
they are unable to capitalize on all the market opportuni-
ties that exist (undersizing error).
Such an “earn your way” (i.e., start with small sales-
force size and add more head counts—after the organiza-
tion has generated the money to pay for them) salesforce
sizing approach seems extremely logical but often results
in missed opportunity for sales organizations during the
growth period. One danger in keeping salesforce size
small during the growth stage to increase short-term
profit is that the organization may lose strength, prevent-
ing it from rebounding when growth is assured or better
market conditions prevail.
Sales organizations typically view the consequences of
hiring too many salespeople as being more serious than
those of hiring too few. If they hire too many salespeople
and the sales forecast is not realized, then at some point they
must take the unpleasant step of reducing the size of the
salesforce by layoff and downsizing, thereby lowering the
morale of salesforce. It also shatters the confidence of the
investor community as they view such steps as loss of mar-
ket share. If, on the other hand, they hire too few salespeo-
ple, the investor community rarely recognizes its failure to
make the most of a significant sales opportunity.5
A sales organization should determine the most appro-
priate size for its salesforce by evaluating the probable
size of the opportunity and assessing the potential risks of
pursuing an aggressive sizing approach. An aggressive
salesforce strategy is appropriate when the sales organiza-
tion has a high likelihood of success and management has
confidence in the sales projections. Determining the right
size for a salesforce is not easy during the growth stage as
salesforce size affects both revenues and costs. While it is
fairly easy to predict the cost side of sizing decisions
(variable expenses for items such as compensation, bene-
fits, field support and travel) by using historical data, it is
much more difficult to predict the revenue impact.
Changes in the size of a salesforce have both short-
term and long-term impacts on costs and sales. As sales-
people are added, incremental sales increase slowly at
first and accelerate over time as new salespeople become
acclimatized to their jobs and the new customers they
acquire make repeat purchases. The morale of the sales-
force can be linked to its size. When there are either too
many or too few salespeople, morale suffers. In case of
salesforce undersizing, a sales organization decides to
increase the number of salespeople. The additional
Madhani 5
salespeople not only generate incremental sales but also
have a positive impact on salesforce morale as salesforce
are not overstretched. It also results in higher retention of
the salesforce. Improved salesforce retention leads to
lower hiring and training costs and greater customer loy-
alty. High salesforce turnover can be a signal that a sales-
force is not sized correctly.
Salesforce Size Calculation: Various
Approaches
The salesforce is a critical component to the overall success
of the sales organization’s goals and objectives. Salesforce
sizing focuses on salesforce deployment decisions that are
related to determining selling effort needed to cover sales
accounts adequately. Based on the desired amount of selling
efforts, the size of the salesforce is calculated and territories
are designed to ensure proper coverage of accounts and to
provide each salesperson with a reasonable opportunity for
success. Deciding on the proper size of the salesforce is a
strategic management issue because it has an important
impact on the sales organization’s revenues and profits. A
properly sized selling organization assures that customers
and prospects receive appropriate coverage, the sales organi-
zation’s products get proper representation, the salesforce is
stretched but not overworked and the organization makes an
appropriate investment in its sales resources. Appropriately
sized salesforce maximize the economic return on invest-
ment of selling resources.6
Determining the most appropriate salesforce size is
dependent on a number of factors, such as stages of busi-
ness life cycle, the use of selling partners, the return on
investment for new salespeople, productivity of salespeo-
ple and turnover of the sales staff. Sales organizations use
a number of analytical tools to determine the appropriate
salesforce size, including the following:
1. Breakdown approach: This approach determines
the appropriate salesforce size by using the fore-
casted sales to calculate the average sales per
salesperson. This approach is easy to develop;
however, it is weak conceptually. The concept
underlying the calculations is that sales determine
the number of salespeople needed.
Salesforce size = Forecasted sales/Average sales
per salesperson
2. Salesforce costs approach: This approach sets
average salesforce cost as a constant percentage
of forecasted sales in line with its historical aver-
age or the industry sales. Maintaining the sales-
force cost to sales ratio is not the same as
maximizing profits. When the salesforce is under-
sized, adding salespeople increases the salesforce
cost to sales ratio and at the same time increases
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profitability. However, when the salesforce cost
to sales ratio is reduced by cutting headcount, the
impact on profitability will be positive only if the
salesforce is already too large. Some sales organi-
zations use this approach to keep their costs under
control. But this method fails to recognize the
direction of causality between sales and sales-
force size. It is important to note that a salesforce
drives sales and not vice versa.
3. Workload approach: This method determines
the total selling effort needed to adequately
cover the sales organization’s market and then
calculate the average selling effort per salesper-
son to find the appropriate salesforce size for
the desired selling effort. This approach is rela-
tively simple to develop.
Salesforce size = Total selling effort needed/
Average selling effort per salesperson
4. Incremental approach: This incremental approach
states that a new salesperson should be added until
the gross profit on new business is equal to the cost
of deploying another salesperson. Early in the
growth stage, when uncertainty is low, a sales orga-
nization adds sales employees until the increased
contribution equals the incremental cost. This
approach is rigorous for calculating salesforce size
as it quantifies the important relationships between
salesforce size, sales and costs. However, this
approach is difficult to develop, and it cannot be
used for new salesforce where historical data and
accurate judgments are not possible.
5. Return on investment (ROI) approach: This
approach calculates the 3-year ROI of salesforce
to determine whether an appropriate return is
being made on the salesforce investment. ROI
analysis is a powerful financial model to help
determine whether a salesforce is too large, too
small or about the right size.
The breakdown, selling expenses and workload
approaches tend to be very rough methods but can be use-
ful in determining some basic information about the
salesforce. The incremental and ROI approaches are
appropriate and robust as they tend to require more
detailed analysis and rigor.
Developing a Financial Model for
Salesforce Size Calculation During
the Growth Stage
A sales organization in the growth stage relies on the ROI
approach for salesforce size calculation. It requires the
sales organization to conduct a breakeven analysis to
check if its salesforce is the right size. Various steps
6 Compensation & Benefits Review 
involved are computing the breakeven ratio (the ratio of
the incremental sales revenue per additional salesperson
to the breakeven sales), estimating the carryover sales
rates and using those estimates to determine the 3-year
ROI for salesforce.
Because of sales carryover, the multiyear sales impact
of adding salespeople is much larger than the 1-year
impact. Upsizing a salesforce can result in an incremental
profit reduction in the first year because salesforce costs
increase immediately while sales increase slowly, but a
significant profit improvement can be attained as the
impact of carryover sales is fully realized over years.
According to research published by the management con-
sulting firm ZS Associates, the salesforce size that maxi-
mizes companies’ 3-year profits is 18% larger, on average,
than the size that maximizes 1-year profits.3
On should follow the six steps given below to conduct
the salesforce sizing analysis:
1. Estimate the annual cost of a salesperson (CS),
the gross margin (GM) and the gross margin rate
(GMR). The annual cost of a salesperson includes
all costs that vary with the number of salespeople,
including salary, benefits, taxes, bonuses, auto-
mobiles, travel and expenses (T&E), computers
and administrative support.
GM = Sales revenue ( SR )
− Variable product costs ( VC )
GMR ( % ) = GM/SR
2. Calculate breakeven sales (B) (i.e., the amount a
salesperson must sell in a year to cover his or her
costs).
B = CS/GMR
3. Estimate the incremental sales revenue for additional
salesperson (I) (i.e., sales revenue an additional sales-
person could generate in a year). Incremental annual
sales revenue per additional salesperson will be less
than the average annual sales per current salesperson
because of the diminishing return on additional sales-
force effort and because of the lower effectiveness of
new salespeople.
4. Calculate breakeven ratio (BER) (the ratio reflects
the extent to which an additional salesperson will
generate sales to cover his or her costs in a year).
BER = I/B
For example, a ratio of 3 implies that, on average,
a new salesperson will generate gross margin
equal to thrice his or her cost within a year.
5. Estimate the carryover sales percentage (CO)
based on past trends. The sales carryover rate is
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the percentage of this year’s sales that the sales
organization will retain without any salesforce
efforts next year. Accordingly, CO1 refers to the
carryover sales percentages for next year and CO2
for the year after.
6. Determine the 3-year ROI on sales staff.
ROI = [(The gross margin on the incremental
sales revenue that an additional salesperson
can generate in year 1) + (The incremental gross
margin on carryover sales in year 2) +
(The incremental gross margin on carryover sales
in year 3) – (The annual cost of an additional
salesperson)/(The annual cost of an additional
salesperson)]
The result is expressed as a percentage as per the fol-
lowing formula:
ROI = [(GMR × I) + (GMR × I × CO1 )
+ (GMR × I × CO 2 ) − CS] / CS
For 3-year ROI on salesforce, the above-mentioned
formula can be simplified as given below by substituting
value of GMR and I found earlier:
ROI = (CS/B) × (B × BER) + [((CS/B) × (B × BER) +
sales carryover) + (CS/B) × (B × BER) + (sales
carryover × sales carryover)) – CS]/(CS) = Breakeven
ratio (1+ sales carryover + sales carryover × sales
carryover) – 1
Financial Model for Optimal
Salesforce Size Calculation During
the Growth Stage
A sales organization develops a financial model for calcu-
lating ROI as shown in Table 1, for different breakeven
ratios and different levels of sales carryover. Sales carry-
over refers to the process in which a significant portion of
the given year’s sales volume is not due to efforts of the
salesforce in a given year but is a function of the prior
year’s selling efforts and other factors.7
Calculation
Three − year ROI for salesforce
= (Breakeven ratio) × (1 + sales carryover
+ ( sales carryover ) × ( sales carryover )) − 1.
The calculation of 3-year salesforce ROI for different
breakeven ratios and at different sales carryover rates is
calculated in Table 1. This relationship provides a valu-
able criteria check of whether a salesforce may be too
 Table 1.  Salesforce Size and Sales Carryover: Impact on ROI Calculation.

Break even <--------------------------------------------------------------------------- Sales Carryover --------------------------------------------------------------------------->

ratio (I/B) 0% 5% 10% 15% 20% 25% 30% 35% 40%

0.2 -80% -79% -78% -77% -75% -74% -72% -71% -69%

0.4 -60% -58% -56% -53% -50% -48% -44% -41% -38%

0.6 -40% -37% -33% -30% -26% -21% -17% -12% -6% Effectiveness

0.8 -20% -16% -11% -6% -1% 5% 11% 18% 25%

1 0% 5% 11% 17% 24% 31% 39% 47% 56%

1.2 20% 26% 33% 41% 49% 58% 67% 77% 87%
Optimal
1.4 40% 47% 55% 64% 74% 84% 95% 106% 118%
Sales force
1.6 60% 68% 78% 88% 98% 110% 122% 136% 150%

1.8 80% 89% 100% 111% 123% 136% 150% 165% 181%

2 100% 111% 122% 135% 148% 163% 178% 195% 212%

2.2 120% 132% 144% 158% 173% 189% 206% 224% 243%

2.4 140% 153% 166% 181% 198% 215% 234% 253% 274%

2.6 160% 174% 189% 205% 222% 241% 261% 283% 306%

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2.8 180% 195% 211% 228% 247% 268% 289% 312% 337%
Efficiency
3 200% 216% 233% 252% 272% 294% 317% 342% 368%

3.2 220% 237% 255% 275% 297% 320% 345% 371% 399%

3.4 240% 258% 277% 299% 322% 346% 373% 401% 430%

3.6 260% 279% 300% 322% 346% 373% 400% 430% 462%

3.8 280% 300% 322% 346% 371% 399% 428% 460% 493%

4 300% 321% 344% 369% 396% 425% 456% 489% 524%

Note.
Italic = Oversized salesforce.
= Optimal salesforce size.
___ = Undersized salesforce.

7
Source. Calculated by the author.
8 Compensation & Benefits Review 
Table 2.  Advantages and Disadvantages of Generalist Salesforce.
Advantages
No duplication of effort.
As generalist salesforce can live close to their accounts, it
minimizes travel time and costs and maximizes the time
devoted to face-to-face selling.
There is more clarity regarding who is responsible and
accountable for each customer.
The generalist salesforce nurtures entrepreneurship culture,
as they “own” their customers and have the freedom to
make decisions about how to spend their time.
It is a flexible structure, allowing quick reallocation of sales
effort to different customers or product lines as sales
organization’s priorities change.
Source. Tabulated by the author.
small, too large or the right size. In Table 1, the percent-
ages in each cell represent 3-year returns on salesforce
investment.
Use Table 2 to find out what the breakeven ratio and
the carryover rate imply about salesforce size. As calcu-
lated in Table 1, the numbers in each cell of the table rep-
resent a 3-year ROI on incremental salesforce investment.
Based on the financial model, the sizing criteria are given
on the following ROI targets:
•• ROI of less than 75%: The salesforce is too large.
•• ROI of 75% to 150%: The salesforce is the right
size.
•• ROI of more than 150%: The salesforce is too
small.
However, in reality sales organizations can set their own
criteria for ROI selection based on forecasting, market
research and sales response analytics.
Salesforce Structure: Key Features
The structure of the salesforce comprises of two compo-
nents, that is, generalist salesforce and specialist sales-
force. In a generalist sales organization, each salesperson
sells an organization’s entire, but usually limited, product
line to customers who typically are all in the same indus-
try, thus providing a single point of business contact to
customers. A generalist salesforce would be expected to
engage in all types of sales activities for all of the prod-
ucts and to sell to all of the customers. A specialist sales-
force would be expected to engage in a limited set of
selling activities for only a portions of the organization’s
products and would be selling only to a certain group of
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Disadvantages
Generalist salesforce are typically not as effective as specialist
salesforce.
Generalist salesforce are overloaded as they have to do
everything, including administrative tasks that take time that
might otherwise be spent making sales calls.
As generalist salesforce are asked to sell many products to
many diverse customers, they often choose to work within
their comfort zone and may tend to ignore some strategically
important products, customers or selling activities.
Limited product line and customer knowledge, lack of
management control over product or customer.
Not suitable in heterogeneous market.
customers. The need for a specialist salesforce is studied
by assessing how heterogeneous or complex are the prod-
ucts, markets and salesforce activities as explained below:
Products Assessment
1. Ability of salesperson to sell all the products
2. Effectiveness gains obtained through product
specialization
3. Impact on key products if a generalist salesforce
deployed
Markets Assessment
1. Scope of market segmentation to facilitate similar
selling processes for customers and prospects in
each segment
2. Market potential and heterogeneity across these
segments
3. Customer synergy within the segments
4. Effectiveness gains obtained through specializa-
tion in these segments
5. Impact on key markets if a generalist salesforce
deployed
Activity Assessment
1. Impact of information technology (IT) on the role
of the salesforce to create opportunities for activ-
ity specialization
2. Effectiveness gains obtained through activity
specialization
3. Impact on essential selling activities if a general-
ist salesforce deployed
Madhani 9
Figure 5.  Optimal salesforce structure: Trade-off between efficiency and effectiveness.
Source. Figure developed by the author.
Such assessment will help sales organizations to explore
the opportunity for salesforce specialization. If the gains
in potential effectiveness exceed the potential cost of
inefficiency, then specialization can be used to generate
various options for salesforce structure. Salesforce spe-
cialization produces effectiveness gains. However, over-
specialization creates efficiency losses. Hence, the best
salesforce structure aims at the right balance between
efficiency and effectiveness. To decide which salesforce
structure is most appropriate for a sales organization, it is
essential to evaluate the trade-off between salesforce effi-
ciency and effectiveness.8
Figure 5 shows the trade-off between efficiency and
effectiveness with an optimal salesforce structure. The
salesforce structure that is finally selected must be good
for its customers (creates values, responsive to needs of
customers and enhance a long-term partnership), sales
employees (rewarding work, growth opportunities and
earning potential) as well as the sales organizations (con-
sistent sales and profitability through gains in efficiency
and effectiveness).9
Generalist Versus Specialist
Salesforce: Advantages and
Disadvantages
Sales organizations using a generalist salesforce structure
assign their salesforce to sales territories made up of a list
of accounts or a group of contiguous geographic units.
Generalist salesforce are usually the most efficient as
typically they have smaller sales territories, less travel
time and the most face-to-face time with customers. They
also have a greater opportunity to gain in-depth knowl-
edge of economic, cultural and competitive conditions in
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the territory. However, generalist salesforce have certain
disadvantages, as given in Table 2.
Specialization is the mechanism that deals with het-
erogeneity and as such a salesforce that specialize in a
market, product or activity uses its focus to increase
effectiveness. A salesforce that focuses its time, efforts
and emphasis on the most appropriate products, cus-
tomers, geography and selling activities creates more
sales in the long-term and successfully executes the
strategies of the sales organization. Because of their
expertise and skill, they generate higher levels of sales
per call. While they are highly effective, specialized
salesforce often have overlapping sales territories, with
different specialized salespeople covering the same
geography but calling on different market segments,
selling different products or engaging in different activ-
ities. Consequently, a specialized salesforce is rarely as
efficient as a generalist salesforce. A specialized sales-
force increases effectiveness in a complex environ-
ment; however, it also causes efficiency losses. So a
good rule of thumb is: Use specialist salesforce as long
as the gains in effectiveness exceed the losses in
efficiency.
Salesforces specialize in different ways such as by
customer, geography, function, product, market, activity
within the sales process and industry vertical. Customer
specialization makes salesforce structure more market
driven and focus on select group of customers.
Specialization by geography focuses on geographic ter-
ritories. Salesforce specialization by functions is illus-
trated by the delineation between the “Hunter” and
“Farmer” roles of the salesforce. Hunters typically focus
on new sales, while farmers cultivate current customer
relationships to drive revenue growth.10
10 Compensation & Benefits Review 

Table 3.  Advantages and Disadvantages of a Product Specialist Salesforce.

Advantages
When a product line is broad, diverse or complex,
a product specialist salesforce has better product
knowledge and thus is more effective.
Sales organizations can intensify and direct the salesforce
effort toward strategically important products more easily.
The salesforce becomes more accountable to product-
based business units.
Disadvantages
More time and money is expended when several salespeople must
travel to the same customer. It is more expensive to operate.
May result in duplication of effort.
Missed opportunities for cross-selling. Salespeople are focused
on their own products and may miss opportunities to sell other
products in the company’s portfolio that can meet customer needs.

Source. Tabulated by the author.

Table 4.  Advantages and Disadvantages of a Market Specialist Salesforce.

Advantages
Market specialist salesforce have enough knowledge of
customers and thus enhances their ability to meet the
complex needs of a diverse customer base.
Salespeople become highly adaptable to customer
needs and buying requirements.
Sales managers can intensify and direct sales efforts
toward strategically important customers more easily.
It creates clear accountability for salesforce to meet
overall needs of the customers.
Disadvantages
Market specialist salesforce may compromise a focus on products or
selling activities.
As attention of salespeople is centered on markets and customers,
they may not have complete knowledge of the company’s products.
It is hard for sales managers to properly allocate effort to
strategically important products or selling activities.
Not suitable for companies with product based business units.

Source. Tabulated by the author.

Table 5.  Advantages and Disadvantages of an Activity Specialist Salesforce.

Advantages
Activity specialist salesforce are low cost and easier to deploy,
with no geographic overlap.
Activity specialist salesforce are effective where activities are
well defined.
The salesforce has better knowledge of sales activities that
require diverse skills and knowledge and hence more
effective.
With activity specialist salesforce, some tasks can be assigned
to sales assistants or telesales. Thus, the company may be
able to improve its efficiency because of cheaper selling
alternatives.
Disadvantages
Activity specialist salesforce may have lack of customer focus.
It has increased coordination requirements.
Salespeople may spend a considerable amount of time
documenting customer information and activities that reduce
the amount of time spent with the customer.
Customers prefer the convenience of working with one
salesperson who is responsible for all products and all
activities. Hence, may dislike dealing with several salespeople
from the same company.

Source. Tabulated by the author.

Product specialists are technical experts who know the
products inside out. Market specialists gain considerable
advantage by specializing on the basis of key market and
customers. Activity specialist salesforce gains considerable
effectiveness by specializing on the basis of critical activity
such as a team to sell new accounts, a team to maintain and
expand business at existing accounts, separate selling teams
for account management or problem solving.
Table 3 lists the advantages and disadvantages of a
product specialist salesforce.
Table 4 lists the advantages and disadvantages of a
market specialist salesforce.
Table 5 lists the advantages and disadvantages of an
activity specialist salesforce.
Some specialist sales teams focus on products, others
on markets and still others on customer segments.
Salesforce can also specialize in certain activities: Some
salespeople concentrate on acquiring customers and oth-
ers on servicing existing customers. Every kind of spe-
cialization has benefits and costs. For instance,

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Madhani 11
specialization by markets reduces salespeople’s focus on
products, while product or activity specialization forces
customers to deal with multiple salespeople. Many sales
organizations therefore create hybrid structures that
include a mix of generalists as well as market, product
and activity specialists as specialist salesforce are more
expensive in terms of compensation costs. Some sales
organizations also design separate specialty forces dedi-
cated to a single product, market, territory or customer
segments.11 Thus, the decision of a sales organization to
structure its salesforce remains more of an art than a sci-
ence as the issues and advantages associated with it are
interdependent, complex and involve many trade-offs.
Determination of Optimal Salesforce
Structure During the Growth Stage
During the growth stage as products are established in the
market, repeat sales becomes a larger proportion of over-
all sales; customers will require service and support, add-
ing to salesforce’s workloads. At some point, a salesperson
who is expected to perform many different selling tasks
for several different customer segments with complex
and diverse needs will not be able to perform the job
effectively. The job will exceed the salesperson’s band-
width. As such selling and supporting tasks grow beyond
the salespeople’s capacity to perform their jobs, they are
likely to ignore the customers, products and selling activ-
ities that are most difficult to manage or unpleasant for
them. Unfortunately, what they drop may be lucrative or
strategic opportunities for the business. So a salesperson
who is trying to do a job that exceeds his bandwidth may
not be able to produce the results the sales organization
wants. In this situation, sales organizations require a sales
bandwidth that is much greater than the capacity of a gen-
eralist salesforce. At this point, sales organizations need
to set up specialist salesforces to master multiple prod-
ucts, markets and selling tasks.3
A sales process that is complex and diverse relative to
the bandwidth, skills or capacity of the salespeople who
perform it requires specialist salesforce, while a sales
process that is straightforward can be accomplished more
efficiently with a generalist salesforce. Specialist sales-
force are typically more effective and are deployed to
drive revenue during the growth phase. In this stage, as a
sales organization’s product portfolio grows bigger and
more complex or if the customers are numerous and from
different industries, a specialized salesforce is the usual
choice. In fact, broader the product portfolio and the
greater the number of markets in which the customers
operate, the greater is the need of the sales organization
for specialization. However, sales organizations need to
determine whether deployment of specialized salesforce
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costs more than the resulting benefits in terms of sales
and margins justify.8
To figure out an optimal salesforce structure, sales
organization determines the degree of specialization
required (i.e., proportion of specialist salesforce in sales-
force structure) in the overall salesforce design. The basic
approach for calculating the proportion of specialist
salesforce needed to reach the point of profit maximiza-
tion is increasing proportion of specialist salesforce till
the value of the organization reaches maximum. As
shown in Figure 6, at optimal salesforce structure (So), a
sales organization’s profit will be maximum.
The choice of salesforce composition between gener-
alists versus specialists affects the sales organization’s
cash flow and profitability. The ultimate choice of the
salesforce composition should meet the goal of maximiz-
ing the value of the organization and hence the sharehold-
ers’ wealth. As Figure 6 shows, when the salesforce
composition is changed (i.e., from higher proportion of
generalist to specialist salesforce), the value of the orga-
nization first rises, then likely peaks and eventually falls.
The reason for this relationship is that initially when the
salesforce composition is still low in specialists, the mar-
ginal increase in organization value (i.e., higher effective-
ness) due to the gains from more specialists outweighs
the marginal decrease in organization value due to the
losses (i.e., lower efficiency). At a certain point, the mar-
ginal increase in organization value equals the marginal
decrease and the value of the organization reaches the
peak (i.e., point “O”). Beyond this point, however, the
marginal decrease outweighs the marginal increase, and
the value of the organization falls.
Determining an Optimal Salesforce
Size and Structure: An Illustration
The salesforce is a powerful vehicle for driving sales in
the growth stage of a sales organization but they are
expensive resources that need to be optimized. Every
sales organization in the growth stage should conduct a
breakeven methodology and use the financial model of
Table 1 to check if its salesforce is of the right size. The
right sized salesforce has an optimal balance between
efficiency and effectiveness.
Illustration
This illustration first calculates the 3-year ROI for
Sales Organizations “A,” “B,” and “C” to determine
the optimal size for salesforce. After calculating the
optimal salesforce size, it proceeds further to deter-
mine the optimal salesforce structure. Sales
Organizations A, B, and C differ only in incremental
12 Compensation & Benefits Review 
Figure 6.  Optimal salesforce structure and profit maximization.
Source. Chart developed by the author.
revenue per sales employee. These sales organizations
have sales carryover of 40% as estimated by the man-
agement. To understand the impact of sales carryover,
Table 6 also shows calculation for sales organizations
with no sales carryover. It is evident from Table 6 that
sales carryover positively impacts breakeven ratio as
well as ROI. Hence, the required salesforce size at the
breakeven point will be less for an organization with
sales carryover.
Calculations in Table 6 show breakeven sales as well
as breakeven ratio for sales organizations. Accordingly, it
would lead Sales Organization A to conclude it needs 24
salespeople and the corresponding 3-year ROI will be
optimal (118%). Similarly Sales Organization B con-
cludes that it needs 6 salespeople and the corresponding
3-year ROI will be very high (493%), and Sales
Organization C concludes that it needs 113 salespeople
and the corresponding 3-year ROI will be very low
(25%). Using the financial model of Table 1, we get the
same result for Sales Organizations A, B, and C. Read
Table 1 with 1.40 as breakeven ratio and 40% as sales
carryover to get 3-year ROI of 118% (Organization A).
Similarly for Organization B, read Table 1 with 3.80 as
breakeven ratio and 40% as sales carryover to get 3-year
ROI of 493%, and for Organization C, read Table 1 with
0.80 as breakeven ratio and 40% as sales carryover to get
3-year ROI of 25%. Here, Organization A is right sized,
Organization B is undersized while Organization C is
oversized. Hence, Organization B needs to add more
salespeople to reduce ROI to an acceptable range and
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Organization C needs to reduce salespeople to increase
ROI to an acceptable range.
Calculation of Optimal Structure
Choosing an appropriate salesforce structure of generalist
versus specialist salesforce depends on customer or prod-
uct characteristics as well as growth potential. The ulti-
mate choice would be the particular salesforce structure
that gives the highest value to the organization. The pri-
mary goal of the organization is to maximize its value.
The optimal balance of generalist and specialist sales-
force (i.e., optimal salesforce structure) in salesforce
design is an important consideration for the sales organi-
zation, as it maximizes the value of the organization
while holding other factors constant.
The change in the salesforce structure (i.e., generalist vs.
specialist salesforce) results both in gains and losses: gains
result in higher future cash flows and profitability due to bet-
ter sales performance caused by higher salesforce effective-
ness, and hence increases the value of the organization;
losses result in lower future cash flows and profitability due
to higher compensation costs (with larger proportion of spe-
cialized salesforce), and decrease in salesforce efficiency,
which ultimately decreases the value of the organization.
Table 7 provides an illustration for optimal salesforce
structure for Sales Organization A. Column (4) represents
the annual operating cash flow (AOC) when there is no
specialist salesforce in salesforce structure. In this exam-
ple, it is equal to $100 million. Column (5) and column (6)
 Table 6.  Salesforce Size Calculation During the Growth Stage Across Various Sales Organizations.

Sales organizations

A B C

Sr. No. Calculation Without C/O With C/O Without C/O With C/O Without C/O With C/O
(1) Annual incremental sales per sales employee ($) 0.518 0.518 1.406 1.406 0.296 0.296
(2) Loss in sales due to attrition of salesforce and uneven performance (%) 20 20 20 20 20 20
(3) Average revenue per sales employee = (1) − ((1) × (2)) ($) 0.414 0.414 1.125 1.125 0.237 0.237
(4) Carryover sales (%) — 40 — 40 —  40
(5) Year 1 carryover sales = (3) × (4) ($) — 0.166 — 0.450 — 0.095
(6) Year 2 carryover sales = (5) × (4) ($) — 0.066 — 0.180 — 0.038
(7) Total carryover sales = (5) + (6) ($) — 0.232 — 0.630 — 0.133
(8) Average revenue per sales employee = (3) + (7) ($) 0.414 0.646 1.125 1.755 0.237 0.369
(9) Gross contribution margin rate (%) 60 60 60 60 60  60
(10) Contribution per sales employee = (8) × (9) ($) 0.249 0.388 0.675 1.053 0.142 0.222
(11) Salary and bonus for salesforce ($) (total compensation) 0.110 0.110 0.110 0.110 0.110 0.110
(12) Benefits for salesforce (%) 30 30 30 30 30  30
(13) Total benefits = (11) × (12) ($) 0.033 0.033 0.033 0.033 0.033 0.033
(14) Field support for salesforce (%) 20 20 20 20 20  20
(15) Field support = (11) × (14) ($) 0.022 0.022 0.022 0.022 0.022 0.022
(16) Expenses related to T&E, automobile, computer, phone, etc. ($) 0.0125 0.0125 0.0125 0.0125 0.0125 0.0125

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(17) Total loaded cost of a sales employee = (11) + (13) + (15) + (16) ($) 0.178 0.178 0.178 0.178 0.178 0.178
(18) Marginal contribution per sales employee = (10) − (17) ($) 0.071 0.211 0.497 0.875 −0.035 0.044
(19) Breakeven sales = (17)/(9) ($) 0.296 0.296 0.296 0.296 0.296 0.296
(20) Breakeven ratio= (8)/(19) 1.401 2.185 3.802 5.931 0.800 1.249
(21) ROI = ((20) − 1) × 100 (%) 40.079 118.523 280.214 493.134 −19.955 24.870
(22) Total fixed cost of sales organization ($)  5  5  5  5  5   5
(23) Salesforce size at breakeven point (BEP) = (22)/(18) 70 24 10  6 — 113
(24) Decision rule regarding salesforce size Optimal Undersized Oversized

Note. C/O = carryover sales. All figures are in million $.

Source. Calculated by the author.

13
14 Compensation & Benefits Review 

Table 7.  Optimal Salesforce Structure in Sales Organization ‘A’.

Salesforce Annual operating Total AOC Value of the

Cost of cash (AOC) with Gain in Loss in = (4) + (5) organization
Generalists (%) (1) Specialists (%) (2) capital (%) (3) no Specialists (4) AOC (5) AOC (6) − (6) [(7)] = (7)/(3) [(8)]
100 0 15 100  0  0 100 666.67
80 20 15 100 4.5 1.2 103.3 688.66
60 40 15 100 16 3.9 112.1 747.33
40 60 15 100 31 14.5 116.5 776.66
20 80 15 100 43.5 39.5 104 693.33
0 100 15 100 50 68  82 546.66

Note. All figures in columns 4 to 8 are in million $. Figures in bold face indicate highest value of organization with optimal salesforce structure.
Source. Calculated by the author.

represents the gain and losses in AOC due to the increase

of proportion of specialists in salesforce structure. Column
(7) represents total AOC as sum of columns (4), (5) and
(6). Column (8) calculates value of the sales organization.
The value of a sales organization is equal to the discounted
future cash flows, that is, the future cash flows discounted
by the organization’s cost of capital. Hence, it is equal to
the total annual operating cash flow (column 7) divided by
the cost of capital (column 3). The value of Sales
Organization A is maximum at 40% (generalists)–60%
(specialists) ratio and reflects optimal salesforce structure.
The optimal salesforce size for Sales Organization A
is 24 (Table 6) while its optimal salesforce structure is
40% generalist and 60% specialist (Table 7). Hence, for
Sales Organization A, salesforce size of 25 divided into
salesforce structure of 10 generalized salesforce and 15
specialist salesforce is optimum. At the optimal sales- Figure 7.  Salesforce size and structure: Efficiency versus
force size and corresponding structure, the sales organi- effectiveness.
Source. Matrix developed by the author.
zation is able to attract, retain and motivate the “right”
type of salespeople, build long-term relationship with
customers, gain market share and enhance profitability. effectiveness at the cost of efficiency. High returns can
Hence, at the optimal point, the value of the organiza- justify the high cost of specialist salesforce. However,
tion is maximum. specialist salesforce will have to cover larger distances
than generalist salesforce do in order to call on the same
Research Implications and Major number of customers and hence lose considerable time in
travel. Such increase in travel time decreases the time
Challenges available to spend with customers. Hence, sales organiza-
The size and structure of the salesforce needs to change as tions require a bigger size of the specialist salesforce. A
the sales organization enters the growth stage. The sales- specialist salesforce is most effective, but it is least effi-
force size affects customers, salespeople and the overall cient. Salesforce efficiency is a function of how the sales-
sales organization. Salesforce structure also varies with the force are able to utilize their available time.
organization’s salesforce size, reflecting tradeoffs the orga- As shown in the matrix in Figure 7, oversize or bigger
nizations must make between selling efficiency and effec- salesforce with higher proportion of specialist salesforce in
tiveness. Generalist salesforce are efficient—they will have salesforce structure results in higher effectiveness but lower
smaller sales territories and less travel time, and thus they efficiency of salesforce. Similarly, undersize or smaller
can spend more time with customers. However, while a salesforce size with higher proportion of generalist sales-
generalist salesforce is efficient, it may not be very effec- force in salesforce structure enhances efficiency of sales-
tive, that is, salespeople may have a low impact per call. force at the cost of effectiveness. At the optimal salesforce
More complex sales processes usually require more size and structure, both efficiency and effectiveness of the
specialization and more salespeople, that is, enhancing sales organization will be high.

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 Madhani 15
Major Challenges
It is hard for sales organizations to isolate the effect of the
salesforce from all the other effects in the marketplace that
might cause sales to go up or down. These effects include
pricing, advertising, sales promotions, along with changes
in distribution, market needs and competitive behavior.
However, the salesforce is a strategic lever of the sales orga-
nization for improving sales growth, market share and
profitability.
Conclusion
Compensation policies and practices differ widely across
sales organizations and are based on the fact that fitting
salesforce design (i.e., salesforce size and structure) to
organizational and environmental conditions makes a dif-
ference as it has some desired effects on the performance
of sales organizations. This is particularly true during the
growth stage of the sales organization. Designing an opti-
mal salesforce size and structure is an intricate task during
the growth stage. Finding an appropriate salesforce size
and deciding on what salesforce structure (a balance
between generalist salesforce and specialist salesforce)
should be included for a given salesforce size is a chal-
lenge as it is influenced by many factors internal and exter-
nal to the sales organization. Hence, compensation costs of
a sales organization and its relationships with salesforce
size as well as structure determinants are highly complex
in nature.
The differing roles that generalist as well as specialist
salesforce should play (i.e., salesforce structure) and the
salesforce capacity to effectively serve the customers
(i.e., salesforce size) are key drivers for the sales organi-
zation in the growth stage. It is mainly because they
determine how quickly the salesforce respond to market
opportunities, influence salespeople’s performances and
affect sales organization’s revenues, compensation costs
and profitability.
The salesforce size and structure have highest
impact on the overall success of a sales organization
in the growth stage compared to other stages of the
business life cycle. This research looked into this area
and identified various matrices and financial models
to determine the optimal salesforce size and
structure.
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with
respect to the research, authorship, and/or publication of this
article.
Funding
The author received no financial support for the research,
authorship, and/or publication of this article.
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View publication stats
Notes
  1. Zoltners, A. A., Sinha, P., & Lorimer, S. E. (2011). Sizing the
sales force and designing sales territories for results. In D. W.
Cravens, K. Le Meunier-FitzHugh, & N. F. Piercy (Eds.), The
Oxford handbook of strategic sales and sales management
(pp. 277-312). New York, NY: Oxford University Press.
 2. Albers, S., Mantrala, M. K., & Sridhar, S. (2008). A
meta-analysis of salesforce response elasticities (Report
08-100). Cambridge, MA: Marketing Science Institute.
  3. Zoltners, A. A., Sinha, P., & Lorimer, S. E. (2006). Match
your sales force structure to your business cycle. Harvard
Business Review, 84(7/8), 81-89.
  4. Zoltners, A. A., Sinha, P., & Lorimer S. E. (2009). Building
a winning sales force: Powerful strategies for driving high
performance. Saranac Lake, NY: AMACOM Books.
 5. Madhani, P. M. (2013). Managing sales compensation:
A sales force configuration approach. Compensation &
Benefits Review, 45(2), 105-114.
 6. Madhani, P. M. (2013). Salesforce configuration: A key
driver for effective compensation planning. World at Work
Journal, 22(3), 15-26.
 7. Madhani, P. M. (2011). Reallocating fixed and variable
pay in sales organizations: A sales carryover perspective.
Compensation & Benefits Review, 43(6), 346-360.
  8. Madhani, P. M. (2012). Managing sales force compensation:
The strategic choice between direct sales force and indepen-
dent reps. Compensation & Benefits Review, 44(2), 86-99.
  9. Zoltners, A. A., Sinha, P., & Zoltners, G. A. (2001). The
complete guide to accelerating sales force performance.
New York, NY: AMACOM Books.
10. Madhani, P. M. (2010). Realigning fixed and variable pay in
sales organizations: An organizational life cycle Approach.
Compensation & Benefits Review, 42(6), 488-498.
11. Colletti, J. A., & Fiss, M. S. (2006). The ultimately
accountable job leading today’s sales organization.
Harvard Business Review, 84(7/8), 125-131.
Author Biography
Pankaj M. Madhani earned bachelor’s degrees in chemical
engineering and law, a master’s degree in business administration
from Northern Illinois University, a master’s degree in computer
science from Illinois Institute of Technology in Chicago and a
PhD in strategic management from CEPT University. He has
more than 29 years of corporate and academic experience in India
and the United States. During his tenure in the corporate sector,
he was recognized with the Outstanding Young Managers Award.
He is now working as a professor at ICFAI Business School
(IBS) where he received the Best Teacher Award from the IBS
Alumni Federation. He is also the recipient of the Best Mentor
Award. He has published various management books and more
than 270 book chapters and research articles in several refereed
academic and practitioner journals such as World at Work Journal
and the European Business Review. He has received the Best
Research Paper Award at the IMCON-2016 International
Management Convention. He is a frequent contributor to
Compensation & Benefits Review and has published 19 articles
on sales compensation. His main research interests include sales
force compensation, corporate governance and business strategy.
He is also editor of The IUP Journal of Corporate Governance.