Impact of perceived overqualification on salesperson performance

Abstract

Salesperson performance is a key indicator of organizational performance. We know that many different factors such as qualification level, selling skills, organizational culture, reward systems etc. influence salesperson performance. Proper recruitment, training, monitoring and rewards for salespersons significantly impact organizational performance. Perceived overqualification (POQ), defined as a situation of a worker who possesses surplus education, experience, or skills relative to what a job requires, is one of the factors that are expected to have an impact on employees’ job performance. This thesis investigates the role of POQ in greater depth.

Perceived Overqualification (POQ) has been reported to exist in many developed countries- around 40% of the working population perceived overqualification in UK (Dolton & Vignoles, 2000), 25% of the working population perceived overqualification in US (Groot & Van den Brink, 2000) and POQ has been reported in Europe (Buchel and Mertens, 2004), Canada (Sadava, O’Connor & McCreary, 2000) and developing countries (Gorg & Strobl, 2003). According to Green and McIntosh (2007), sales occupation has the highest incidence of POQ (refer Table 2.1). The topic of POQ, despite its high prevalence, has received very little attention (Fine, 2007) and the overall conclusions from few studies that examined ‘POQ – Salesperson Performance’ relationships have been inconsistent.

Using ‘person-job’ fit theory, this thesis examined the role of organization type, sales force control system (SFCS) and sales career cycle (SCC) as moderators of ‘POQ – Salesperson Performance’ relationships and explains how organizations can benefit from enhancing sales performance of salespersons with POQ. Two research questions addressed are: (1) Does POQ varies across different stages of sales career cycle? (2) Which variables moderate the impact of perceived overqualification on salesperson’s sales performance?

The results of the study show that salespersons exhibit differences in (1) Perceived overqualification (POQ) across exploratory, establishment, maintenance and disengagement stage of sales career cycle. Salesperson at exploratory stage had highest levels of POQ and salesperson at disengagement stage had lowest levels of POQ. (2) Sales performances of POQ sales personnel across prospector, analyzer, defender and reactor type organizations. This study suggests that sales personnel with POQ perform well in prospector and analyzer type organizations as compared to in defender and reactor type organizations. Also, sales personnel with perceived overqualification perform better when controlled by outcome-based control system (OBCS) than when controlled by behavior-based control system (BBCS). This study concludes that maintenance stage sales personnel with POQ perform better than exploratory stage sales personnel with POQ. The results of the study would enable an organization to assess whether its reward systems and levels are getting the desired impact from sales personnel with different levels of POQ in terms of salesperson performance. This study suggests that ‘person-job’ fit criteria used in personnel selection should also consider environmental variables (organization type and control mechanisms) for better job outcomes.

The data for study has been drawn from 120 sales representatives and 59 sales supervisors from the pharmaceutical industry. This setting was appropriate for a variety of reasons – (a) The industry represents high technology and high growth industry and India is likely to become one of the top 10 global pharmaceuticals markets in terms of sales by 2020, according to a recent report by PricewaterhouseCoopers (PwC) (Jayakumar, 2010) (b) there are more than 20000 registered pharma companies in India (expresspharma, 2010) and there is greater representation of sales personnel across prospector, analyzer, defender and reactor type organizations that are being controlled by behavior-based and outcome-based control systems (c) The industry employs about 20 lakhs sales representatives (Unnikrishnan, 2007) which is a significant proportion of the Indian sales force across various industries; meaning that there is a greater probability of respondent to be at different career stages and (d) marketing and distribution in this industry contributes to nearly a third of the total cost and has a huge potential of ROI improvement (TCS, 2007).