Incentive Problems in a Software Company

In July, 2009, Jeffrey Pfeffer, a professor at the Graduate School of Business at Stanford University, received an e-mail. The two co-founders and joint co-CEOs and their colleagues at Orange Kimono Software were struggling with their pay system. Orange Kimono, based in the north of England, was a software company with approximately 150 employees that made products sold to businesses. This case contains the text of the e-mail which details the old and new sales compensation systems and the resulting effects on sales, representative behavior, and customer experience.