Understanding Commissions
PeopleSoft Order Management enables you to determine commission rates in a variety of ways. Commission rates can be defined by employee or by product and can be earned by individuals or shared by teams. They can be granted at the order level or at the scheduled shipment level for quotes in addition to sales orders.
This section lists common elements and discusses:
Team members.
Methods for calculating commission rates.
Commission application levels.
Field or Control |
Description |
|---|---|
Basis |
Time at which commission rates are determined, either at booking or at shipping. |
Support team |
Group of people working together to sell to or support a customer. You can assemble support teams and associate them with customers, quotes, sales orders, and sales buying agreements. |
Team member |
Individual who is part of a support team. Each team member has either a commissionable or a non-commissionable role. |
Commission schedule |
Sale amount, date ranges, and corresponding commission rates for support team members, also known as commission plans. |
Pro rata commission method |
Calculation method by which products determine commission rates, which are then distributed among team members. Available at the schedule level only. |
Before you can calculate commission rates, set commission variables for your business units and products, and set up team members:
Establish whether or not commissions are calculated, and if they are, whether they are calculated at the header or schedule level on the Order Management Definition - Order Management Setup page.
Define products as commissionable on the Product Definition - Options page.
Establish commission settings on the Team Member Types page.
Establish commission settings for team members on the Team Member Personal Data - Member Commission page.
Set up a commission schedule on the Member's Commission Schedule page.
PeopleSoft Order Management refers to your customer sales and support staff as team members.
Define groups of team members by employee role, such as account manager, sales manager, or customer support; such team member groupings are called team member types. Refine team member types further by associating them with customers, quotes, and sales orders.
Note: Support teams (groups of team members) do not have commissionable statuses. You cannot declare a support team eligible or ineligible for commissions as a team. Support teams are distinct from team member types.
Each team member type and each individual team member has a status of either commissionable or non-commissionable. That status determines whether the system calculates commission rates for team members. Determine commission statuses for team member types on the Team Member Types page, and commission statuses for team members on the Team Member Personal Data - Member Commissions page. The Member Commissions page takes precedence over the Team Member Types page. If the settings on the two pages conflict, the system uses the settings from the Member Commissions page.
PeopleSoft Order Management provides three methods for determining commission rates:
Team member: A flat percent applied to every sales order for a particular team member.
For example, a team member might receive a 10 percent commission rate on every sales order completed.
Commission schedule: A varied range for sales date and sales amount applied to every sales order for a particular team member.
The commission schedule method depends on the date and the minimum and maximum sales amount. You cannot use a date range only. For example, a team member might receive a 6 percent commission on sales orders completed in the first quarter of the year, and 8 percent on sales orders completed in the second quarter of the year, as the commission sales amount increases.
Pro rata: Based on the ordered product, divided among team members.
For example, set the commission rate for a product at 10 percent. Two team members are eligible to receive commissions for that product. To split the commission from that schedule evenly between the two team members, each team member receives a 5 percent commission for that schedule.
When you select a commission rate calculation method, some commission options are available and other options become unavailable. The table shows the options available for each of the three commission rate calculation methods:
|
Commission Rate Calculation Method |
Available at Header Level |
Available at Schedule Level |
Rate Determinant |
Rate Flat or Variable by Sales Amount |
Time of Sales Amount Calculation |
|---|---|---|---|---|---|
|
Team Member |
Yes |
Yes |
Team Member |
Flat |
Booking |
|
Commission Schedule |
Yes |
Yes |
Team Member, Sale Price, Date |
Variable |
Booking or Shipping |
|
Pro Rata |
No |
Yes |
Product |
Flat |
Booking |
PeopleSoft Order Management can determine commission rates at either the header level or the schedule level:
Header level: Rates are established for the entire order or quote.
Use one of the two calculation methods that are based on team member criteria: the team member method or the commission schedule method.
Schedule level: Rates are established for individual schedules, where the team might vary or the commission rate might vary, based on the products sold.
Use any of the three calculation methods: team member, commission schedule, or pro rata.
Note: Enter commission information at the header level even if you have chosen to calculate commissions at the schedule level. If you are calculating commissions by schedule, the system uses the commission information that you enter at the header level to create a commission template that changes by default to every schedule for the order; you can override that template.