Matrix Goal Terminology

This section discusses terminology related to matrix goals.

Term	Definition
Weight	The weighting percentages assigned to the performance goals that you set up in the matrix.
Threshold	Minimal performance conditions that must be met before a payout occurs. Thresholds cancel payouts when a minimally acceptable performance level is not achieved for the goals that you set.
Target	Performance conditions that must be met before an optimal payout occurs. A target involves the average level of performance in achieving the goals in the matrix. A group or organization typically meets the target level of performance 80 percent of the time.
Stretch	Performance conditions that must be met before the highest payout occurs. Stretch involves the maximum level of performance in achieving the goals in the matrix. A group or organization typically reaches the stretch level of performance 50 percent of the time.
Performance level	The percentages that you assign to the threshold, target, and stretch levels in the matrix. The system uses these percentages to calculate the performance score. The number of performance levels corresponds to the number of columns that you specify for the matrix. Common practice is to set up five levels that range from 80 percent to 120 percent. In such a scheme, 80 percent and 90 percent represent performance that is below expected, 100 percent represents the expected level of performance, and 110 percent and 120 percent represent higher-than-expected performance. Three-level and seven-level matrices are also common.
Attainment	Numeric representation of the attainment of a matrix goal. The system interpolates the goal attainment value to a performance value. That performance value determines the performance level percentage used in the performance score calculation.
Score	The system calculates the score for each goal by multiplying the goal weight by the percentage of the performance level at which the attainment value falls. The total performance score is the sum of the scores for all goals in the matrix. The system determines the payout formula based on where the total performance score falls on the payout schedule.
Total score	Sum of the performance scores for all goals within the matrix. The system determines the payout formula based on where the total performance score falls on the payout schedule.
Payout schedule	Schedule of performance score ranges and associated payout formulas.
Payout formula	Formula that the system uses to calculate the plan member's variable compensation award. Typically, the formula is a percentage of base pay.