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Unit Quota Compensation Examples

Oracle Sales Compensation uses different formulas for calculating commissions based on the number of units sold, assuming the interval type is the same, and the transaction factors, payment and quota uplifts are all set to 100%.

The compensation examples employ the following syntax:

<Payment Type>:<Apply Txn>:<Split On/Off>:<ITD On/Off>

The methods to use Unit Quota compensation to calculate transactions are:

The Sales Activity table lists the transaction amount, the product sold, and the performance that is being used to calculate the commission for each of these methods. Assume a quota of 1,000 units in the two examples. Revenue classes A and B are tied to these plan elements.

Sales Activity
Transaction Amount $ Units Product Performance % (Achievement/Quota) Revenue per Unit ($Amount/Unit)
$500 40 A 40/1000 = 4% $500/40 = $12.50
$500 600 B 640/1000 = 64% $500/600 = $0.83

The UQ Percentage Rate Table is used to calculate the commission rate for the following payment types:

UQ Percentage Rate Table
Tier Commission
Percent Percent
From % To % %
0 50 5
50 100 10
100 999 15

The UQ Amount Rate Table is used to calculate the commission amount for the fixed amount payment type.

UQ Amount Rate Table
Tier Commission
Percent  
From % To % Amount
0 50 5.00
50 100 10.00
100 999 15.00

Applied Transaction Amount Percentage : Individually : Split On : ITD Off

This type of plan element is typically used to compensate internal sales representatives on units sold. The sales representatives receive a percentage of the revenue that they earn for the company. This percentage or rate amount is determined by their overall unit achievement towards the quota set by sales management. Both unit and revenue have an affect on their compensation amount.

Unit Quota Plan Element Example 1
Active Periods JAN-97 to DEC-97
Interval Type Quarter
Split On
Apply Txn Individually
Quota 1,000
Payment Type Applied Transaction Amount Percentage
Rate Table UQ Percentage
Discount Option None
ITD Off

This plan element calculates the commission for each transaction and allows the commission to be paid each period. Unit achievement is reset at the beginning of each interval. Oracle Sales Compensation calculates the commission for each transaction during each quarter, finds the appropriate tier in the UQ Percentage Rate Table associated with this level of achievement to determine the corresponding commission rate, and multiplies this rate by the revenue per unit times the number of units sold.

Calculation Formula
Commission rate Determined by the tier in which the unit performance percentage is located in the UQ Percentage Rate Table.
Commission Commission rate x revenue per unit x units.

   To calculate the commission for product A:

   To calculate the commission for product B:

In this case, the unit performance percentage of 64% crosses over both the first and second tiers in the UQ Percentage Rate Table; therefore, the revenue will be split across both tiers, and two different rates will be used to calculate the commission.

   To calculate the commission for products A and B:

Calculate the commission for products A and B.

The total commission for products A and B for the quarter is: $25 + $30.71 = $55.71.

Fixed Amount : Individually

This type of plan element is typically used to compensate sales representatives on units and provide them with a fixed amount per unit sold, which is determined by their level of achievement towards unit goal.

Unit Quota Plan Element Example 2
Active Periods JAN-97 to DEC-97
Interval Type Quarter
Apply Txn Individually
Quota 1,000
Payment Type Fixed Amount
Rate Table UQ Amount
Discount Option None

This plan element calculates the compensation for each transaction. The quota is for each quarter in the year. Thus, quota achievement starts over at the beginning of every quarter. This plan allows the salespeople to get compensated on the number of units sold. Oracle Sales Compensation calculates the commission for each transaction during each quarter, finds the appropriate tier in the UQ Amount Rate Table associated with this level of achievement to determine the corresponding commission amount, and multiplies this amount by the number of units sold.

Calculation Formula
Commission rate Determined by the tier in which the unit performance percentage is located in the UQ Amount Rate Table.
Commission Commission amount x number of units.

   To calculate the commission for product A:

   To calculate the commission for product B:

   To calculate the commission for products A and B:

Calculate the commission for products A and B.

The total commission for products A and B for the quarter is: $200 + $6,000 = $6,200.

Payment Amount Percentage : Individually : ITD Off

This type of plan element is typically used to compensate sales representatives on the number of units sold, and provide them with a commission that is a percentage of payment or incentive quota. The rate is determined by the sales representatives' percentage achievement towards unit goals.

Companies may use payment quotas to more closely budget the cost of all sales. Although the rate is determined by the unit achievement towards quota, the actual commission earned will be the percentage of payment.

Unit Quota Plan Element Example 3
Active Periods JAN-97 to DEC-97
Interval Type Quarter
Apply Txn Individually
Quota 1,000
Payment Type Payment Amount Percentage
Payment $750.00
Rate Table UQ Percentage
Discount Option None
ITD Off

This plan element calculates the compensation for each transaction. The quota is for each quarter in the year. Thus, quota achievement starts over at the beginning of every quarter. Oracle Sales Compensation calculates the commission for each transaction during each quarter, finds the appropriate tier in the UQ Percentage Rate Table associated with this level of achievement to determine the commission rate, and multiplies this rate by the payment amount.

Calculation Formula
Commission rate Determined by the tier in which the unit performance percentage is located in the UQ Percentage Rate Table.
Commission Commission rate x payment amount.

   To calculate the commission for product A:

   To calculate the commission for product B:

   To calculate the commission for products A and B:

Calculate the commission for products A and B.

The total commission for products A and B for the quarter is: $37.50 + $75 = $112.50.

Applied Transaction Amount Percentage : Grouped By Interval

This type of plan element is typically used to compensate internal sales representatives on units. The sales representatives receive a percentage of the revenue that they earn for the company. This percentage or rate amount is determined by their overall unit achievement towards the quota set by sales management.

This plan allows the salespeople to get compensated on the number of units sold but also be awarded a percentage of the sales revenue. This associates the cost of sales to some percentage of revenue achievement.

Unit Quota Plan Element Example 4
Active Periods JAN-97 to DEC-97
Interval Type Quarter
Apply Txn Grouped By Interval
Quota 1,000
Payment Type Applied Transaction Amount Percentage
Rate Table UQ Percentage
Discount Option None

This plan element pays once per quarter. Unit achievement is reset at the beginning of each interval. Oracle Sales Compensation totals the units for all sales transactions during each quarter, finds the appropriate tier in the UQ Percentage Rate Table associated with this level of achievement to determine the corresponding commission rate, and multiplies this rate by the total transaction amount to derive the commission.

Calculation Formula
Commission rate Determined by the tier in which the unit performance percentage is located in the UQ Percentage Rate Table.
Commission Commission rate x total transaction amount.

   To calculate the commission for products A and B:

Fixed Amount : Grouped By Interval

This type of plan element is typically used to compensate sales representatives on units and provide them with a fixed commission amount per unit sold, which depends on their level of achievement towards unit quota or goal.

This plan allows the salespeople to get compensated on the number of units sold.

Unit Quota Plan Element Example 5
Active Periods JAN-97 to DEC-97
Interval Type Quarter
Apply Txn Grouped By Interval
Payment Type Fixed Amount
Rate Table UQ Amount
Discount Option None

This plan element pays once per quarter. Oracle Sales Compensation totals the units for all sales transactions during each quarter, finds the appropriate tier in the UQ Amount Rate Table associated with this level of achievement to determine the commission amount, and multiplies this amount by the total number of units sold to derive the commission.

Calculation Formula
Commission rate Determined by the tier in which the unit performance percentage is located in the UQ Amount Rate Table.
Commission Commission amount x total number of units sold.

   To calculate the commission for products A and B:

Payment Amount Percentage : Grouped By Interval

This type of plan element is typically used to compensate sales representatives on units sold and provides them with a commission that is a percentage of payment or incentive quota. The rate is determined by the sales representatives' percentage achievement towards unit goals or quota.

Companies may use payment quotas to more closely budget the cost of all sales. Although the rate is determined by the unit achievement towards quota, the actual commission earned will be the percentage of the payment.

Unit Quota Plan Element Example 6
Active Periods JAN-97 to DEC-97
Interval Type Quarter
Apply Txn Grouped By Interval
Quota 1,000
Payment Type Payment Amount Percentage
Payment $750
Rate Table UQ Percentage
Discount Option None

This plan element pays once per quarter. Unit achievement is reset at the beginning of each interval. Oracle Sales Compensation totals the units for all sales transactions during each quarter, finds the appropriate tier in the UQ Percentage Rate Table associated with this level of achievement to determine the corresponding commission rate, and multiplies this rate by the payment amount.

Calculation Formula
Commission rate Determined by the tier in which the unit performance percentage is located in the UQ Percentage Rate Table.
Commission Commission rate x payment amount.

   To calculate the commission for products A and B:

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