1. Using Incentive Compensation
  2. Calculate Monthly Product Bonuses with a Scorecard

Calculate Monthly Product Bonuses with a Scorecard

This example shows how to create a performance measure that uses weighted scores to calculate monthly product bonuses.

The incentive plan calculates a monthly bonus using the dollar value of the product that the sales force sells for that period.

  • Attainment is a weighted score that could range from 0 to 100

  • A score for each product line is based on the period revenue for three product lines

Here are key decisions for the performance measure in this scenario.

Decisions to Consider

In This Example

How should the application process the transactions?

Grouped by interval

What is the unit of measure?

Score

What is the performance interval?

Monthly

Does the calculation involve quota?

No

Does the calculation involve a scorecard?

Yes

Summary of the Tasks

In the Compensation Plans work area, create a performance measure by creating the parts first, and then associating them with the performance measure.

  1. Create the attainment and rate dimension input expressions.

  2. Create the scorecard.

  3. Create one performance measure, associating the attainment expression, scorecard, and rate dimension input expression.

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

Create the Expressions

Create these two expressions:

Type of Expression

Purpose

Attainment

Calculate period revenue attainment

Rate dimension input

Calculate the period weighted score for a product line

  1. Click Create in Manage Expressions.

  2. In the Configure Expression section, create the rate dimension input expression SUM(Credit.Credit Amount) and the attainment expression RTR * Measure.Weight Attainment.

    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 right parenthesis ).

    5. Click Save and Create Another.

    Attainment Expression

    1. On the Attributes menu, select Rate Table Rate.

    2. Click the asterisk *.

    3. On the Attributes menu, select Measure > Weight.

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

Create a Scorecard

Create a scorecard for the performance measure to use to find the score to apply based on generated revenue. You create rate tables and associate them with performance measures to create scorecards.

  1. Click Create in Manage Rate Tables.

  2. On the Rate Dimensions section toolbar, click Create.

    1. In the Tiers section, add the From and To values for each tier, such as 0 -- 10,000, 10,000 -- 50,000, 50,000 -- 100,000, and 100,000 -- 9,999,999.

      Make the final To value much larger than you would ever conceivably use.

    2. Click Save and Close to return to the Create Rate Table page.

  3. Click Edit Rates.

    1. Edit the rate for each tier, such as 25, 50, 75, and 100.

    2. Click Save and Close to return to the Create Rate Table page.

  4. Click Save and Close to return to the Manage Rate Tables page.

Create a Performance Measure

Create a performance measure that determines revenue attainment for the period based on sales credits, such as desktop.

  1. Click Create in Manage Performance Measures.

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

  3. Click Next to open the Define Goal page.

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

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

    1. Add the credit category, such as Desktop.

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

  5. 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 expression that calculates the period weighted score for a product line.

  6. Click Next to open the Add Scorecard page.

    1. Complete the fields, as shown in this table.

      Field

      Value

      Rate Table Dimensions

      1

      Split Attainment Across Tiers

      Yes

      Apply Split

      Fixed within a tier

    2. In the Scorecard section, add a row.

    3. In the Name field, search for and select the rate table that finds the score to apply based on generated revenue.

    4. In the Rate Dimensional Inputs section Expression Name field, search for and select the expression that calculates the period revenue attainment.

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

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