Incentive Compensation Plan Options for Primary Details

When you create and edit plans in the Compensation Plans work area, you enter a target incentive, specify whether credit categories can overlap, and specify start and end dates.

Target Incentive

The target incentive, or on target earnings, is the expected earnings when the participant achieves 100 percent of the goals set in the associated performance measures. Set the target incentive percentage for each plan component until the total is 100 percent.

Allow Credit Category Overlap

Your Allow Credit Category Overlap selection determines how plans use credit categories.

Selection	Description
Yes	Use the same credit category across multiple plan components within a plan.
No	Use nonoverlapping credit categories across the plan components within a plan. If credit categories overlap, then the calculation process evaluates the credit categories associated with only the performance measures where the Earning Basis is Yes.

Examples of Not Allowing Overlap

Your plan consists of two plan components configured with the performance measures, earning basis, and credit categories shown in this table. Also, you selected No for Allow Credit Category Overlap.

Earning basis determines whether performance measure attainment calculations and incentive earning calculations use the same credit categories.

Plan Component	Performance Measures	Measure Earning Basis	Credit Categories
Product bonus	Communication	Yes	CC1, CC2, and CC3
Product bonus	Network	No	CC3, CC4, and CC5
Annual bonus	Revenue	Yes	CC4, CC5, and CC6

The Product and Annual bonus plan components can exist in the same plan because the communication and revenue performance measures don't share credit categories.

Example Variations and Results

• If the Revenue measure includes CC1, CC2, or CC3, then a plan can't contain both bonus plan components because the Communication and Revenue measure credit categories overlap.

• If Annual bonus has another measure, Service, that includes CC1, CC2, or CC3 and Earning Basis is No, then a plan can contain both bonus plan components.

Start and End Dates

When you create plans, you must specify a start date. While optional, you should also always end date your plans for easy maintenance and better reporting on interval-to-date and year-to-date numbers.