Calculate Monthly Bonuses Based on Quota Attainment

This incentive plan example demonstrates how to create a new annual plan that provides participants with monthly bonuses as they meet their sales quotas.

This table summarizes the key decisions for the plan component in this scenario.

Decision to Consider	In This Example
What's the payout frequency?	Monthly
What type is the calculation?	Interval-based
How many measures do you require and what are their weights?	One measure with no weight
How many rate tables do you require, and how many dimensions for each table?	None
How do you want to apply the rate?	Earnings are calculated using target incentive

Here's a summary of key decisions for the performance measure in this scenario.

Decisions to Consider	In This Example
How should calculations process the transaction?	Group by interval
What's the unit of measure?	Percent
What's the performance interval?	Monthly
Does the calculation involve quota?	Yes
Does the calculation involve a scorecard?	No

Summary of the Tasks

In the Compensation Plans work area, create a plan by creating the parts first, and then associate them with the plan. To create a compensation plan:

1. Create the attainment expression.

2. Create the performance measure, associating the attainment expression in the measure formula.

3. Create the earnings expression, which uses the results from the performance measure that you created in step 2.

4. Create the plan component, associating the earnings expression in the incentive formula.

5. Create the incentive compensation plan, associating the plan component.

Use the default values for fields unless the steps specify other values.

Create the Attainment Expression

Create the attainment expression that calculates the percentage of quota attainment for the period:

1. Click Create in Manage Expressions.

2. Name the expression Percentage of Quota.

3. Select the business unit.

4. In the Configure Expression section, create the attainment expression SUM(Credits.Credit Amount / Measure.Interval Target).

   1. On the Attributes menu, select Functions > Aggregate functions > SUM.

   2. Click the left parenthesis (.

   3. On the Attributes menu, select Credit, > Credit Amount.

   4. Click the slash /.

   5. On the Attributes menu, select Measure > Interval Target.

   6. Click the right parenthesis ).

5. Click Save and Close to return to the Manage Expressions page.

6. Click Done.

Create the Performance Measure

Create the performance measure that calculates the percentage of period quota attainment, using the attainment expression that you just created:

1. Click Create in Manage Performance Measures.

2. Name it Percentage of Period Quota.

3. In the Unit of Measure field, select Percent.

4. The performance interval is Period and the business unit is selected. Enter start and end dates for the quarter.

5. Click Next to open the Define Goal page.

   1. In the Target field, enter the goal, such as 1,200,000.

   2. In the Unit of Measure field, select Amount.

   3. Click Distribute Evenly.

6. Click Next to open the Add Credit Categories page.

   1. Add the credit categories.

      If a credit category doesn't exist, then click Create to create it and add it to the measure.

7. Click Next to open the Define Measure Formula page.

   1. In the Process Transactions field, select Grouped by interval.

   2. In the Expression Name field, search for and select the attainment expression you created, Percentage of Quota.

8. Click Save and Close to return to the Manage Performance Measures page.

9. Click Done.

Create the Earnings Expression

Create the earnings expressions to calculate the bonus payment for the period:

1. Click Create in Manage Expressions.

2. Name the expression Monthly Bonus for Quota Attainment.

3. In the Configure Expression section, create the earnings expression Measure results.ITD Output Achieved * Plan.Target Incentive / 12.

   1. On the User Defined Objects menu, select the attribute Measure result.

   2. Search for and select the performance measure that calculates the percentage of the period quota attainment Percentage of Period Quota.

   3. Select the attribute ITD Output Achieved.

   4. Click Add to Expression.

   5. Click the asterisk *.

   6. On the Attributes menu, select Plan > Target Incentive.

   7. Click the slash /.

   8. On the Attributes menu, select Constant.

   9. Enter 12 in the Add Constant field.

   10. Click Add to Expression.

4. Click Save and Close to return to the Manage Expressions page.

5. Click Done.

Create the Plan Component

Create the plan component that calculates the period bonuses using the performance measure and earnings expression that you just created:

1. Click Create in Manage Plan Components.

2. Name your plan component Period Bonus from Quota Attainment.

3. In the Calculate Incentive field, select Per interval.

4. In the Incentive Type field, select Bonus.

5. Enter start and end dates for the quarter.

6. Click Next to open the Add Performance Measure page.

   1. Add the measure that calculates the percentage of the period quota attainment, Percentage of Period Quota.

7. Click Next to open the Define Incentive Formula page.

   1. In the Expression Name field, search for and select the earnings expression that calculates the period bonus payment, Monthly Bonus for Quota Attainment.

8. Click Save and Close to return to the Manage Plan Components page.

Create the Incentive Compensation Plan

Create an incentive compensation plan that provides period bonuses that are based on quota attainment:

1. Click Create in Manage Compensation Plans.

2. Name the compensation plan Monthly Bonus for Quota Attainment.

3. Enter start and end dates for the quarter.

   Tip: Always end date your compensation plans.

4. Click Next to open the Add Plan Component page.

   1. Add the plan component that calculates period bonuses, Period Bonus from Quota Attainment.

5. Click Save and Close to return to the Manage Compensation Plans page.