Considerations for Adding Performance Measures to Plan Components

Avoid assigning the same performance measure to multiple plan components in the same plan. Limit the number of performance measures because measure result records always equal or exceed the number of credit records.

Avoid creating multiple measures that have the same credit categories and formula within the same plan. When you add a performance measure to plan components in the Compensation Plans work area, you can set a weight, calculation sequence, and earning basis.

Weight

The weight is the percentage of influence that the measure has in calculation expressions. If you enter weights, then the total weights for all added performance measures must equal 100 percent.

Calculation Sequence

Set calculation sequences when dependent measures refer to the calculated results of other, base measures. Dependent measures must have a higher calculation sequence than base measures. Whenever you associate a dependent measure with a plan component, also add the base measure to complete the plan component setup.

For example, calculate the weighted attainment for two measures, weighted at 70 and 30 percent. Use that attainment to calculate the earnings for the plan component.

The table describes the measures in this example and shows the weight and calculation sequence settings when adding these measures to the plan component.

Measure	Description	Relationship	Weight	Calculation Sequence
Desktop Revenue	Calculates desktop revenue attainment	Base	70	1
Laptop Revenue	Calculates laptop revenue attainment	Base	30	1
Weighted Revenue Attainment	Calculates the weighted attainment score of the base revenue attainment measures	Dependent	0	2

Earning Basis

Earning Basis specifies whether attainment and earnings calculations use the same credit categories and if the incentive formula uses the measure attainment in calculations.

This table describes each earning basis selection.

Selection	Description
Yes	Yes is the default selection. Keep this selection if you reference the performance measure attainment in the incentive formula expression of the plan component. The expression calculates the incentive earnings. Earning basis must be Yes when you associate a performance measure that processes transactions individually with plan components that calculate incentive for each event.
No	Select No if the measure formula result is an input to a rate table rather than part of an earning calculation. In this case, the performance measure is a hurdle or multiplier, whose objective participants must meet to start earning or to get to a higher tier.

Selection

Description

Yes

Yes is the default selection. Keep this selection if you reference the performance measure attainment in the incentive formula expression of the plan component. The expression calculates the incentive earnings.

Earning basis must be Yes when you associate a performance measure that processes transactions individually with plan components that calculate incentive for each event.

Select No if the measure formula result is an input to a rate table rather than part of an earning calculation. In this case, the performance measure is a hurdle or multiplier, whose objective participants must meet to start earning or to get to a higher tier.

Earning Basis Selection Examples

This table lists two measures, identifies the use for each and the corresponding earning basis selection, and explains the reason for each selection.

Measure	Use	Earning Basis	Reason
Service quota attainment	One factor to determine the rate table rate.	No	Attainment is part of a rate dimension input expression.
Product license revenue	The bonus is a percentage of product license revenue.	Yes	Attainment is part of the incentive formula expression.