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How do firms value sales career paths?

Ali Reza Keshavarz1, Dominique Rouzies2,3,4, Francis Kramarz5,6

  • 1School of Business, Maynooth University, Co. Kildare, Ireland.

Journal of the Academy of Marketing Science
|December 13, 2024
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Summary
This summary is machine-generated.

Firms value sales managers' experience more than salespeople's, especially sales occupation experience, which is transferable across jobs. Sales careers offer distinct paths, with management roles often filled by those with prior managerial, not sales, backgrounds.

Keywords:
Career pathsExperienceJob signalSalesforce compensationSkills

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Area of Science:

  • Business Administration
  • Organizational Behavior
  • Human Resource Management

Background:

  • Sales careers offer diverse paths across industries and firms.
  • The impact of sales career trajectories on compensation remains unclear.
  • Understanding the value of sales experience is crucial for compensation practices.

Purpose of the Study:

  • To investigate how different sales career paths influence employee compensation.
  • To assess the monetary value placed on sales experience by firms.
  • To identify the most valued types of experience for sales roles.

Main Methods:

  • Analysis of compensation data from nearly 25,000 sales employees over 22 years.
  • Examination of career paths and experience types for both salespersons and sales managers.
  • Statistical evaluation of the relationship between experience and earnings.

Main Results:

  • Sales managers' experience is valued more highly by firms than salespeople's experience.
  • Sales occupation experience is the most significant and transferable type of experience.
  • Distinct career paths exist: one rewarding sales experience, another offering promotion to management.

Conclusions:

  • Sales occupation experience is a key driver of compensation across different roles.
  • Promotions to sales management often involve lateral moves from other managerial positions, not necessarily from sales roles.
  • Findings have implications for sales compensation strategies and career development research.