|Bookshelf Home | Contents | Index | PDF|
Each rule has a performance measure which indicates the type of performance that employees must achieve to receive an incentive. Siebel Incentive Compensation includes several predefined performance measures. Table 7 lists the predefined performance measures by category. For information on creating customized performance measures, see Configuring Incentive Compensation.
% Quota. The percentage achievement against a target number. Many plans often compensate employees for achieving the quota. For example, you might give sales representatives a quota target of closing $1,000,000 of revenue for the year. If they achieve that goal, they receive a bonus.
Cumulative % Quota. The cumulative percentage of quota is determined by an accumulation of revenue to date. The rate is determined by the total of the deals to date rather than the amount of the current deal.
MBO. The score received on a management-by-objective measure. Employees might be given one or more objectives to accomplish during a time period. A manager might assign an employee a score based on the employee's performance toward those objectives. Bonuses can be set up to pay an employee for achieving a certain score.
KSO. The score received on a key sales objective measure. Employees might be given one or more sales objectives to accomplish during a time period. A manager might assign an employee a score based on the employee's performance toward those key sales objectives. Bonuses can be set up to pay an employee for achieving a certain score.
Customer satisfaction. The score received on a customer satisfaction measure. Many organizations take customer satisfaction surveys to determine the satisfaction and loyalty of their customers. These scores are often associated with the employee who works closely with them. Bonuses can be set up to pay an employee for achieving a certain customer satisfaction score.
Service level. A bonus for achieving a monthly service level for incoming calls. The percentage of calls answered in a certain time period is the monthly service level. Bonuses can be set up to pay call center managers for achieving a certain percentage.
When two performance measures are specified, an implied AND exists. For example, if Performance Measure 1 is Revenue and Performance Measure 2 is % Discount, then the definition could be read as shown in Table 8.
For example, Performance Measure 2 is used when you create matrices. In this example you have a matrix in which the compensation of a given order is determined both by the Revenue and the % Discount, as shown in Table 9.
Cumulative performance measures, such as Cumulative Revenue and Cumulative % Quota, allow compensation calculations on accumulated revenue or % Quota Attainment. You can accumulate revenue or quota within a period, or over a number of periods. To accumulate over more than one period, you must define the cumulative measure period for calculation runs that are not year-to-date. For more information on year-to-date calculation runs, see Incentive Compensation Calculations.
For example, assume the commission rule of the Geographic Sales Rep Plan pays commission based on cumulative revenue, as shown in Table 10.
Table 11 illustrates how the revenue is accumulated and how the compensation is calculated using accumulated revenue.
A compensation plan can be created with an incentive rule that has a performance measure of Cumulative % Quota. For example, the bonus rule of the Geographic Sales Representative Plan pays compensation based on cumulative quota attainment, as shown in Table 12. The quota target amount for this plan is $100,000 and target incentive is $10,000.
Table 13 illustrates how the revenue is accumulated and how the compensation is calculated.
Siebel Incentive Compensation rate tables are preconfigured to calculate payout based on a percentage of a deal, a dollar amount, or a target incentive amount. However, you can also calculate payout using your own formulas. This section explains how rates and rate tables are used in Siebel Incentive Compensation.
There are two types of rate tables, simple and tiered. Simple rate tables pay out an amount corresponding to the row of the table that matches the amount of the performance measure. Tiered rate tables pay out an amount that is a function both of the row of the table in which the revenue falls and of all previous rows. Specifically, a tiered rate table pays out the maximum amount that the previous rows yield, plus an amount corresponding to the excess of the attained value over the lower range of the attained row.
The rate table in Table 14 illustrates a typical scenario. Assume that you have closed a deal worth $180,000. The row of the table in which this revenue falls is the second row, with a low value of $150,000, a high value of $200,000, and a corresponding payout rate of 2%.
Using a tiered table, 1% is paid on the first $150,000 and 2% is paid on the remaining $30,000 (yielding $1,500 + $600 = $2,100 commission). The tiered table payout is the maximum amount of the first row (1% * $150,000 = $1,500), plus the incremental amount of the attained value of the deal, over the lower range of the attained row (2% * $30,000 = $600).
The type of rate you can apply depends on the rule type chosen for the plan rule, as shown in Table 15. The types of rates are:
As Table 15 shows, if your rule type is Bonus-Sales Results or Bonus-Other Results, you can pay either a dollar amount, a percentage of the target incentive amount, a rate calculation, a recognition award, or a combination of the four.
Compensation for the deal is calculated at 5% of the deal amount, or $5,000, as the total commission on the deal. However, because the commission is split between the representatives, each receives 50% of the total commission (Smythe receives $2,500 and Beale receives $2,500).
There could be an additional member on the sales team, such as a product specialist, whose credit allocation may be 100%. However, because product specialist is associated with another compensation plan, the specialist receives 100% of the compensation for this deal.
The credit allocation on a deal does not have to equal 100%. However, it often equals 100% for the same type of sales representative on a deal (in this instance, Smythe and Beale in geographic sales).
For an aggregated rule, the payment is made on an aggregate of deals for a time period (for example, when the salesperson receives a bonus on the deals closed for the month). The bonus rule of the Geographic Sales Representative Plan pays a bonus based on monthly, aggregated revenue, as shown in Table 16.
In this example, geographic sales representatives Terry Smythe and Keith Beale are working together to close a deal for $100,000. The credit allocation on the deal is split equally—50% for each representative.
The deal is included as part of the monthly total for both Smythe and Beale. Therefore, the credit allocation is used to determine how much of the deal should be credited to each representative. Because each receives a 50% credit allocation, Smythe receives credit for $50,000 and Beale receives credit for $50,000.
In many sales situations, several people working together as a team are responsible for closing a deal. When a number of people are assigned to a particular deal, you must determine how much credit each person receives for closing the deal. In the case of splits, you might divide the commission among the members of the sales team (for example, each geographic representative on the deal gets 50% of the total commission on the deal). If you double the commission, then everyone on the sales team receives either a partial or full credit for the deal (that is, each geographic representative on the deal receives 100% of the total commission on the deal).
Either Commission Credit Allocation% or Quota Credit Allocation% can be used to calculate commissions. For example, suppose a $1 million deal is closed. You would use the full $1 million revenue to calculate Commission Allocation. However, there might also be an award toward which the revenue is credited, and the award only counts 50% of the revenue. In this case, $500,000 would go into the Quota Credit Allocation.
You can use Siebel Assignment Manager to make certain that the employees are assigned to the appropriate opportunities. You can also use the Sales Credit Assignment view to verify that employees are assigned to the right orders. For more information about Siebel Assignment Manager, see Siebel Assignment Manager Administration Guide.
|Siebel Incentive Compensation Administration Guide|