Researchers from Vanderbilt University, San Diego State University, the University of Denver, and the University of Georgia have published a new study looking at how performance rankings affect salespeople’s results and turnover.
In the U.S., companies spend around $3.6 billion each year on sales performance management (SPM) tools and practices, and this is expected to grow to $6.4 billion by 2030. A common SPM strategy is ranking salespeople based on performance metrics and sharing these rankings with the team. The goal is to motivate employees by showing them how they compare to their peers. But, until now, there’s been little research on whether this approach works.
What motivates people?
The study, which involved over 27,000 salespeople from 170 companies in 83 countries, focused on four main questions: Do rankings actually motivate salespeople? Does the way rankings are presented make a difference? When do rankings work better or worse? And what are the long-term effects on employee turnover?
The results were mixed. Anonymized rankings—where employees don’t know who’s who—did lead to better sales results, but they also caused more employees to quit. This turnover comes with hidden costs, like the expense of hiring and training new workers and losing experienced ones.
Identifiable rankings—where salespeople are named—were more effective overall. Salespeople worked harder, and fewer left the company. The motivation came from both wanting to improve and wanting to look good in front of others. But when quotas were shown along with the rankings, the benefits were reduced, suggesting that too much information can backfire.
The study offers useful advice for managers. First, more information isn’t always better. Choosing the right mix of data matters. Identifiable rankings can boost performance and cut turnover, but tying these rankings to quotas might lessen their impact.
For executives, the research highlights the value of investing in performance dashboards that fit the company’s needs. Done right, these systems can pay off by improving results and lowering turnover, making the sales team more effective. In short, transparency helps—if used wisely.
