Understanding Matrix Goals

When you use a goals matrix, you set up goals, performance levels, and a payout schedule. The system calculates a performance score that determines the payout formula that the Award Allocation process uses to calculate awards.

Because a goals matrix determines the payout formula at the organization or group level, consider your options carefully before using a goals matrix for plans administered with one of these plan member rules:

• Employee VC Record

• Employee VC Record with Groups

With these plan member rules, you can set the target payout at the individual plan member level. You override this feature when you use a goals matrix.

You can manage a variable compensation plan with a goals matrix at the organization level or the group level. The level depends on the plan member rule that you established for the plan, as shown here:

• Use an organization goal matrix if the plan member rule is Empl VC Record (without groups).

• Set up the matrix at the group level for group goals if the plan member rule is Empl VC Record with Groups or Define Tree/Group.

  The system does not support matrix goals at the individual level.

This section discusses terminology related to matrix goals.

Here are the high-level steps for using a goals matrix to manage a variable compensation plan:

1. Define goal IDs on the Goals page.

2. Define the goals matrix option on the Plan Definition page.

   To define the goals matrix:

   1. Select Goals Matrix as the plan goals type.

   2. Define the number of columns that you want to set up in the matrix.

3. Set up the goals matrix on the Plan Goals - Matrix Goals page or the Plan Goals with Groups - Matrix Goals page.

   1. Enter the goal IDs that you use to evaluate performance.

   2. Establish a weighting percentage for each goal ID (the cumulative total of the weights for all goals must equal 100 percent).

   3. Enter the threshold, target, and stretch performance level percentages for the number of matrix columns that you define for the plan.

   4. Identify the measurable performance level values for each goal at each performance percentage level.

4. On the Payout Schedule page, identify a payout schedule that represents the amount of award that a plan member would receive at the various performance levels.

5. On the matrix goal attainment pages, enter the goal attainment value for each goal.

   The system performs these calculations:

   1. Determines the performance score for each goal.

   2. Sums the scores of all goals.

   3. Determines the payout formula.

6. Calculate the award using the payout formula by running the Calculate Awards process.

7. Determines the performance score for each goal

This example illustrates a sample goal matrix with five rows showing threshold, target, and stretch amounts.

The sample matrix shows these elements:

• Five performance levels ranging from 80 percent to 120 percent (for the threshold, target, and stretch levels).

• Three goals for measuring performance.

• Weight percentages for each goal (the total goal weight is 100 percent).

• The performance values to be attained for each goal at each performance level.

  Note: The contribution margin is usually expressed as a percentage. The plan administrator has indicated that a contribution margin of 12 percent is the lowest value that the organization needs to reach to qualify for a reward. However, 16 percent is the ideal target.

  You do not have to express performance values as percentages. Note that the customer satisfaction performance value is a flat amount because it is measured by scores on a survey.

• The actual goal attainment value expressed in the same measure (percent or flat amount) as the performance value for each goal.

• The score that the system has calculated for each goal and the total performance score.