|Bookshelf Home | Contents | Index | PDF|
Draws are compensation payments that companies make to sales representatives in advance of performance. Companies use draws to guarantee that employees earn a certain amount of compensation even though their performance may not result in compensation earnings of that amount.
As a compensation administrator, you can set up default draws, and establish different draws for certain participants. For example, you set up a default draw of $2,000 for new sales representatives. However, one representative has negotiated a $2,500 draw. You can override the default draw and set up a $2,500 draw that only applies to this individual.
You can view draw amounts and draw balances by navigating to the Compensation Tracking screen's Calculation Summary view. Employees can review how draws affect their compensation calculations by navigating to the Compensation views.
For example, suppose your company sets up a draw amount of $2,000 for new sales representatives during their first six months of employment. In a given month, if a sales representative's performance results in gross earnings of $800, the company pays the sales representative the $800 earned, plus an additional $1,200, so that the total net earnings equals the draw amount of $2,000. The sales representative is guaranteed to earn at least $2,000.
Draws can be recoverable, nonrecoverable, or recoverable balance forgiven. Recoverable draws are paid back. Nonrecoverable draws are not paid back. Recoverable balance forgiven draws can be recovered during the draw effective period and then forgiven. If a sales representative earns more than draw amount, the sales representative is paid the additional amount beyond the draw amount.
NOTE: A draw is only executed if it is included in a calculation run with the same measure period as the draw frequency. A plan is not included in the calculation run unless there is a rule with the same measure period. Calculation runs must be released before draw balances are actually applied.
|Siebel Incentive Compensation Administration Guide|