Calculating Awards
The Calculate Awards process calculates both monetary and non-monetary variable-compensation (VC) awards, including stock awards. It enters the results of its calculations on the Allocate Awards page. The award calculation can be simple or complex, depending on the plan business rules.
Values Used by the Calculate Awards Process
The Calculate Awards process uses these values:
Target, minimum, and maximum values computed by the Determine Allocation process.
Group and organization performance factors computed by the Determine Allocation process.
Proration factor computed by the Determine Eligibility/Proration process.
Funding amounts entered on the Plan Funding and Allocate Group Funding pages.
Calculations Performed by the Calculate Awards Process
The Calculate Awards process:
Determines the performance factor if the plan uses weighted goals.
Calculates the individual performance factor, if appropriate.
Sums the performance factors from all goal levels to determine the performance factor to use for calculating the award.
The Calculate Awards process then:
Calculates one of these formulas:
Business Rules
Formula
No proration or goals
Target Value
Proration
Target Value × Proration Factor
Weighted goals
Target Value × Performance Factor
Weighted goals and proration
Target Value × Proration Factor × Performance Factor
Matrix goals
Value of the payout from the Payout Schedule
Matrix goals and proration
Value of the payout from the Payout Schedule × Proration Factor
Calculates the calculated award by comparing the value calculated in the previous step to the maximum award and minimum award, if specified in the plan.
If the plan uses proration and the proration factor of the group member is less than one, the system does not perform this step.
If the award is greater than the maximum, the process sets the calculated award at the maximum.
If the award is less than the minimum, the process sets the calculated award at the minimum.
Calculates the funds available for funded plans and computes the adjustment factor, if appropriate.
Calculates the adjusted award by applying the adjustment factor to the calculated award.
Proceeds according to the plan type:
Monetary plans: Calculates the award amount and award value by applying the VC rounding rule to the adjusted award.
Non-monetary plans: Stores the adjusted award as the award unit. The process calculates the award value by applying valuation and VC rounding rules to the award unit.
Stock-type plans: Calculates the award unit by applying stock rounding rules, and then calculates the award value by applying valuation and VC rounding rules to the award unit.
Updates the Award table and sets the Award status to Init Calc (initial calculated).
The system populates the Allocate Awards page from the Award table. Modify and approve awards on the Allocate Awards page.
Note: If the plan uses group funding, managers must calculate the awards for their direct reports, and the approver must approve them, before they can allocate funding to the child groups.
Page Name |
Definition Name |
Usage |
---|---|---|
Calculate by Plan Page |
RUNCTL_VC_CALWRD_P |
Run the Calculate Awards process for plans that do not use groups. This process calculates awards and enters calculation data on the Allocate Awards by Plan page. Select a VC plan ID and payout period. |
Calculate by Group Page |
RUNCTL_VC_CALWRD_G |
Run the Calculate Awards process for selected groups within plans administered with groups. This process calculates awards and enters calculation data on the Allocate Awards by Group page. Select a VC plan ID, payout period, and group ID. |