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Business Scenario for Achievement Containers

This scenario provides an example of a process flow performed by the compensation administrator and sales representatives. Your company may follow a different process flow according to its business requirements.

Catherine Andrews, a compensation administrator for Networks Ltd., is working with her organization to define its sales structure for next year. As part of that process, she defines the sales hierarchy for the U.S., shown in Figure 12.

Figure 12.  Sales Hierarchy for Network Ltd.

According to its compensation plan, Networks Ltd. pays its sales representatives based on each representative's year-to-date achievement against both product and services goals. In addition, it pays its management team based on the performance of the representatives. Networks Ltd. wants to be able to determine what the achievement of each representative is on a daily basis. The company can use these numbers to forecast the financial performance of the company and motivate its representatives to close more business.

To accomplish these goals, Andrews plans to define a number of achievement containers which accumulate the daily attainment for each representative. In addition, this achievement will be rolled up to sales management, so that both the representatives and the managers can view their performance each day. Andrews, as the administrator, can review achievement information.

When defining the container, Andrews decides that the container will roll up booked revenue each day for the selected hierarchies. She also defines the Revenue Type as Product, which means that for this container she only wants to accumulate product revenue, and she applies a filter for the product line.

Andrews is also defining the compensation plans for the sales organization. In the Compensation Plans view, she has created a compensation plan for both sales representatives and sales managers. The positions in the hierarchy have been added to one of these compensation plans.

Both compensation plans have a % Quota rule that pays the participant based on attainment against a quarterly quota target. Andrews wants to use the information in the achievement containers to calculate the quota attainment. For the % Quota rule in the compensation plan, she links the Product Revenue Container that she just created. In the Rate Tables views she creates records for the payment rates. Now when she calculates compensation, the engine sums up the attainment in the containers and compare it against the quota to determine the compensation payments for the participants.

Each day the sales representatives sell different products and the order information is tracked in Network Ltd.'s order entry system. This information is continuously exported from the order entry system and imported into the Siebel application's order system, where an assignment process runs that assigns the sales team to the order, giving the correct sale team members credit for the order. The crediting process also accounts for the credit allocation of the sales team, including splits and overlays.

After these orders are imported into the Transaction Workbook, the accumulation process moves the achievement into the correct container. Because there is a container for product revenue, the server process takes the revenue for the product, and, based on the transaction team member, applies the credit allocation amount and adds the amount to the correct achievement container. The result is a container record for each sales team member with a sum of current achievement.

Finally, because Network Ltd. wants to compensate its employees on territory performance as well as on individual performance, Andrews creates a bonus area or team-based container with a territory of West that tracks performance based on the team's territory and includes the participants in that territory (Victor, Madison, Dan, Terry, and Pat).

Catherine Andrews logs in to the Achievement Containers Workbook to review the different containers and the container amounts. The sales representatives also log in to My Compensation each day to access their daily attainment records. This lets them know how they did each day, as well as which transactions they closed.

Midway through the quarter, one of the plan rules is changed retroactive to the beginning of the quarter. Andrews processes the change to create new containers and make the old ones obsolete.

At the end of the quarter, Andrews wants to calculate compensation payments. She executes a Calculation Run for the sales representative and sales manager plans. The calculation engine looks at the achievement records for each participant in the plan (there is one record for each day in the quarter) and sums up the achievement amounts. It then compares the total achievement amount for the quarter against the quota target for the participant. When it comes up with a % achievement, it compares that against the values listed in the rate table of the plan to come up with a compensation payment. Finally, it writes out a record in the Calculation Workbook, which displays the participant name, the compensation amount, and the amount in the achievement container. When Andrews drills down into the Calculation Workbook Detail, she can see what container was used, as well as the rate from the rate table used. In addition to calculating compensation for the sales representatives on the plan, the calculation engine can also sum up the achievement containers of the managers and pay them on their compensation plan as well. Andrews reviews these numbers and releases compensation to the compensation plan participants.