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Defining Compensation Rates

In many companies, higher levels of achievement are rewarded with higher compensation payments. Similarly, for each transaction, Oracle Sales Compensation determines compensation rates by calculating the achievement, or level of performance against a quota or revenue goal.

For each plan element, you define a compensation rate table, which pairs ranges of achievement in tiers, or rate brackets, with compensation rates, expressed as percentages or dollar amounts. In a traditional rate table, higher compensation rates are paid for higher levels of quota or revenue achievement as shown in this table:

Bracket Achievement Level (% or $ Amount) Compensation Rate (% or $ Amount)
  From % To % %
1 0 25 1
2 25 50 2
3 50 75 3
4 75 100 4
5 100 999 7

For each bracket in the table, Oracle Sales Compensation pays every dollar at the specified rate up to the minimum of the next bracket. The point at which achievement crosses into a new bracket is called the breakpoint. In this example for a revenue quota plan element, a rate of 1% is paid on every dollar until quota achievement reaches the 25% breakpoint.

For each transaction, Oracle Sales Compensation figures the achievement by adding the quota credit from the transaction to the salesperson's current level of achievement. Oracle Sales Compensation uses the formula shown in FIgure 7 - 3 to determine the sales credit.

For each bracket in the rate table, Oracle Sales Compensation applies the rate specified until the quota achievement reaches a breakpoint, or the minimum of the next bracket. If the quota credit from a single compensation transaction forces the quota achievement to straddle brackets, part of the compensation for that transaction is paid at the lower rate and part at the higher, as shown in Figure 7 - 4.

If the quota credit from a single compensation transaction forces the quota achievement to fall exactly on a boundary, compensation for that transaction is paid at the lower rate. For example, if the quota credit of $500 is applied in Figure 9 - 5, payment is calculated using the 1% compensation rate.


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