Dysfunctional Sales Force Turnover: The Effect of Occupational Concentration and Pay Dispersion

Organizations try to recruit and retain the high performing salespeople not just because they are the main value generators but also because they may destroy value by dysfunctional turnover and mobility is to a competitor. Drawing on human capital and social network theories I introduce and test the effect of two isolating factors of labor forces i.e. pay dispersion and regional concentration of salespeople on the dysfunctional turnover of salespeople. Analysis of the data on the entire population of sales organizations in France in 2004 shows that high performing salespeople’s turnover decisions are affected by the interaction of concentration of salespeople in a region with the organization’s compensation dispersion relative to its competitors.