Bookshelf v7.5: Creating a Rule

Siebel Incentive Compensation Administration Guide > Plan Design >

Creating a Rule

When you create a rule, you identify the performance measures by which employees are evaluated. Although a rule can be used by multiple plans, each plan must be associated with at least one rule in order to generate compensation.

You can create stand-alone rules and rule table definitions, associate other stand-alone elements to a rule at the rule level, and add multiple rules to a plan. You can also create rule definitions for specific types of rules. Using stand-alone rules eliminates the need for creating and maintaining identical rules for multiple plans. In addition, you can personalize plan rules and plan rule payout factors at the participant level.

The following procedure explains how to create a rule.

To create a rule

From the application-level menu, choose View > Site Map > Incentive Compensation Administration > Rules.

In the Rules list, click New, and in the Name field of the new record, enter a name for the rule.

In the Type field, select the type of rule you want to create.

Options are Bonus-Other Results, Bonus-Sales Results, or Commission).

As soon as you choose the Type, the field becomes read-only. Some of the remaining fields may be unavailable, depending on the rule type you select.

In the Table field, select the type of rate table you want to create (Simple or Tiered).

A tiered table with cumulative performance measures must start with zero in the low value.

Select the performance measures.

In the Performance Measure 1 field, select the first performance measure.

Performance measures are the variables that are actually measured by a rule. The available performance measures depends on the rule type.

(Optional) In the Performance Measure 2 field, select the second performance measure.

Select the Aggregate check box if aggregation is desired.

In the Low Value Operator (LVO) field, select the operator (<= or <).

In this case, the High Value Operator (HVO) is automatically supplied. It is always the opposite of the Low Value.

For additional information, see Creating a Plan Rule Rate Table.

(Optional) In the Transaction Level field, select either Transaction or Transaction Detail.

In the Participant Level field, select either Individual or Group.

In the One Time Award field, select either Recurring or One Time.

One Time Awards are recognition awards, not monetary awards. For a monetary award, select the One Time Bonus check box.

In the Measure Period Type field, select the measure period type.

In the Cumulative Measure Period Type field, select the type.

In YTD calculations, do not use a rule with a cumulative measure period. The performance measure of the rule automatically accumulates from the beginning of the year.

The table that follows describes the fields in the rule record.


Field	Comments
Aggregate	The check box indicates whether or not the orders should be aggregated over the period. If the rule is an aggregate, then the calculation engine aggregates the orders for the time period and pays compensation based on the sum of those orders. An example is a bonus for the total amount of revenue the representative closes for the month. If the rule is not aggregated, then the calculation engine pays compensation for each order—for example, a 3% commission on each deal that is closed this month. Rules of type = Commission are always nonaggregate.
CCB Flag	(Optional) Cash Collection Bonus Flag. Select the check box to make the rule a CCB rule. A CCB rule can compare two statuses of an order and status dates. If the order was booked in April, 2002, and cash was collected in May, 2002, this rule can pay out a bonus, if the CCB Period Type is Quarter.
CCB Period Type	Period type. Required if you check the CCB Flag. Select the type (Week, Bi-Weekly, and so on) from the drop-down list.
Comments	(Optional) A text field for comments.
Cumulative Measure Period Type	The type of cumulative measure period: Day, Week, Bi-Weekly, Month, Quarter, Half-Year, or Year. Cumulative Measure Period Type should not be used with a Year-to-Date Calculation Run. The performance measure of the rule automatically accumulates from the beginning of the year.
Earned	Some organizations may pay compensation when the order is booked, some may pay compensation when the customer pays for the order, and some may compensate a combination of 50% when booked and 50% when paid. The rule only pays out compensation on transactions with a status equal to the earned value of the rule. In the Earned field, click the select button. In the Rule Earned dialog box, click New, and complete the fields: Select the Earned method (Billed, Booked, Installed, or Paid). Select the Percentage (default = 100%). Select Prorate (if appropriate). Select Prorate if you want to prorate compensation on paid status. For example, if you select an earned status of Paid and select Prorated. If a sales representative closes a deal worth $1,000,000, and the customer only pays $500,000, when compensation is calculated (for example, 1%), then the total compensation amount of $10,000 is prorated by the amount of the payment as follows: 500,000/1,000,000 =50% × $10,000 = a payment of $5,000 The prorate is used only with an earned status of paid. Select the Distribution (All, Current Sales Team, or Original Sales Team). The Distribution field determines how to distribute compensation payment to a transaction team. For example, if a rule with an earned status of Booked is designed to pay Smythe and Stern each 50% of compensation earned, but Stern is no longer on the sales team, and a new member Beale joins instead, payout options for a booked order are: Original (pays both Smythe and Stern), Current (pays Smythe and Beale), and All (pays Smythe, Stern, and Beale). Click Save. When the original Rule Earned list appears showing the new rule earned element, click OK.
Filters	(Optional) Select or create one or more filters for your rule. For directions, see Creating a Filter.
High Value Operator	Specifies the high value operator: <=. For more information, see Low Value Operator.
Last Modified	Login ID of the person to last modify the rule. This field is automatically populated.
Low Value Operator	Specifies the type of low value operator. The high value operator is directly inferred from the low value operator. Because the low value operator can either be < or <=, the high value operator is always the opposite. For example, if the low value operator is <, the high value operator is <=. This low value operator is used when a value sits on the edge of two tiers. For example, if you have a simple rate table with the following: 0 100 100 200 If the low value operator is <, the rate table is: 0 < x <= 100 (lower tier) 100 < x <= 200 (higher tier) where x is the value. In the example, this value is 100, and when the low value operator is <, the value: 100 falls into the lower tier. If the low value operator is <=, the rate table is: 0 <= x < 100 (lower tier) 100 <= x < 200 (higher tier) where x is the value. In this case again, this value is 100, and when the low value operator is <=, the value, 100, falls into the higher tier.
Measure Period Type	Specifies the measure period: Day, Week, Bi-Weekly, Month, Quarter, Half-Year, or Year. The measure period is period for which the compensation for the rule should be calculated (month, quarter, year, and so on). The measure period allows you to run the same plan rule for multiple periods. If you have a plan rule with a start date of January 1, 2001, and an end date of December 31, 2001, and you choose Month as the measure period, then this rule is calculated for every month within the plan activation period. For example, when you run the calculation engine for a month period (such as January 2001), the calculation engine uses those rules that have Measure Period = Month. It does not use those marked with measure period = Quarter or those marked with Measure Period = Year. Months are defined in the Period Administration view. For more information about defining periods, see Applications Administration Guide.
Modified Date	The date and time the rule was last modified. This field is automatically populated.
Name	Name of the rule.
One Time Bonus	Indicates that the bonus can be applied only one time during the plan rule effective period. This is used for a monetary bonus.
One Time Award	Indicates that the award can be applied only one time. This is used for a nonmonetary award.
Participant Level	Type of participant being compensated for the Rule— Individual or Group. The individual participant level refers to the performance of one person—you might use the individual participant level to pay out commissions on the deals that someone closes. The group participant level looks at the performance of a group of people—you might use the group participant level to pay out a bonus for the region achieving its number. Bonus-Other Results rules always have an individual level.
Performance Measure 1	The first variable measured by the rule. The choice of performance measure depends on the rule type selected. Possible values are %Discount, %Margin, %Quota, Commercial Credit Revenue, Cumulative %Quota, Cumulative Commercial Credit Revenue, Cumulative Quota Credit Revenue, Cumulative Revenue, Quota Credit Revenue, Revenue, or Units.
Performance Measure 2	(Optional) The second variable measured by the rule. This allows you to create matrices in which the commission payout is determined by two different variables (for example, when both the Revenue and the %Discount of a deal determine the commission rate). Possible values are %Discount, %Margin, %Quota, Annual Review, Commercial Credit Revenue, Cumulative %Quota, Cumulative Commercial Credit Revenue, Cumulative Quota Revenue, Customer Satisfaction, KSO, Leads, Management by Objectives, Periodic Review, Quota Credit Revenue, Revenue, Service Level, Time Available, or Units. The selection of performance measures depends on the rule type. Bonus-Other Results rule types cannot have a second performance measure.
Script Based	Check box indicates that the rule is based on a Siebel eScript. When a rule is based on a script, the script determines the compensation. In this case, other rule rate table calculations are not executed.
Script Method	Name of the script method. Required if you selected the Script Based check box.
Script Service	Name of the business service used.
Table	The type of rate table—either Tiered or Simple.
Transaction Level	Specifies the level of the transaction the calculation engine should read to calculate compensation—Transaction or Transaction Detail. The value in this field tells the calculation engine to look at the transaction aggregated line item totals or specific line items of the order to calculate compensation. If you need to use an include account filter, use the transaction level. On the other hand, if you want an include product filter, use the transaction detail.
Type	Specifies the type of rule.

Creating a Multiplier for a Plan Rule

Use the following procedure to create a multiplier for the plan rule.

To create a multiplier for a plan rule

From the application-level menu, choose View > Site Map > Incentive Compensation Administration > Plans.

In the Plans list, select the plan that will have multiplier factors, and drill down on the hyperlink in the Name field.

Click the Plan Rules view tab, and in the Plan Rules list, select a plan rule and drill down on the hyperlink in the Name field.

In the Rate Table list, select a rate table or create a new one.

The number you enter in the multiplier field is a percentage by which the output of another plan rule is multiplied. For example, if a sales representative achieves 85% of quota, using the rate table, the output of the other plan rule, is multiplied by 80%.

Setting Up a Rule to Prorate Payments on a Paid Status

You can set up a rule so that compensation payments are prorated on the Paid status of the order.

To set up the rule to prorate payments

From the application-level menu, choose View > Site Map > Incentive Compensation Administration > Rules.

In the Rules form, click New.

In the new rule record, enter a name, and in the Type field, select Bonus-Sales Results.

In the Transaction Level field, select Transaction.

In the Earned field, click the select button, and in the Rule Earned dialog box, click New.

In the form, select Paid from the drop-down list in the Earned field.

In the Percentage field, leave the default 100% unchanged.

Select the Prorate check box.

In the Distribution field, select All, Original Sales Team, or Current Sales Team and click Save.

In Rule Earned list, click OK.

Complete the remaining fields (Performance Measure 1, Participant Level, One-Time Award, and Measure Period Type), as needed.

Create a Rate Table with the Deal equal to 10%.

For directions on creating the rate table, see Creating a Plan Rule Rate Table.

Creating a Plan Rule

You create a plan rule by associating rules with a plan.

To create a plan rule

From the application-level menu, choose View > Site Map > Incentive Compensation Administration > Plans.

In the Plans list, select a plan, and then drill down on the hyperlink in the Name field.

In the Plan Rules form, click New.

In the new record, click the select button in the Name field.

In the Pick Rule dialog box, select a rule, and then click OK.

Creating a Stand-Alone Rule Rate Table

You can create stand-alone Rule Rate Tables and several rate table definitions (each for a different effective period) for each rule. Using stand-alone rule rate tables eliminates the need to create and maintain multiple identical rate tables for more than one plan. You can vary the payout by defining different plans at the plan rule level. Sales Managers can personalize payout factors for plan rules at the participant level.

NOTE: The total compensation calculated by a rule rate table is multiplied by the personal plan rule % payout factor.

The following procedure describes how to create a stand-alone Rule Rate Table by associating a rate table definition to a rule.

To create a stand-alone rule rate table

From the application-level menu, choose View > Site Map > Incentive Compensation Administration > Rules.

In the Rules list, select a rule, and then drill down on the hyperlink in the Name field.

The Rule form, Rule Rate Table list and Rule Rate Table Definition form appear.

In the Rule Rate Table Definition form, click New.

In the Rule Rate Table Definition form, complete the fields.

The following table describes the fields.


Field	Comments
Amount	The dollar amount that is paid out for the performance tier. For example, if the revenue is between $0 and $100,000, the payout is $100. If you closed a deal for $50,000, then the payout is $100.
Calculation	Use this text field to create your own formulas for calculating compensation.
Comments	(Optional) A text field for comments.
High 1	The high value for the Performance Measure 1 tier.
High 2	The high value for the Performance Measure 2 tier.
Low 1	The low value for the Performance Measure 1 tier.
Low 2	The low value for the Performance Measure 2 tier.
% of Deal	The percentage of the deal revenue that is paid out for the performance tier. For example, the revenue for a deal is between $0 and $100,000, and the payout is 5% of the deal revenue. If you closed a deal for $50,000, then your payout is $2,500.
% of Target Incentive	The percentage of the target incentive that is paid out for the performance tier. For example, the revenue for a deal is between $0 and $100,000, and the payout is 5% of your target incentive. If you closed a deal for $50,000 and your target incentive was $25,000, then your payout is $1,250.
Multiplier	(Optional) A value used as a multiplier when the plan rule is linked to another plan rule.
Performance Measure 1	The first performance measure of the rule.
Performance Measure 2	(Optional) The second performance measure of the rule. An AND is implied between the first performance measure and the second performance measure. A second performance measure is often used with matrices.
Recognition Award	(Optional) A nonmonetary award for items such as trips, plaques, merchandise, or other prizes based on earned points. Click the select button in the field to query for a recognition award.