Options for Splitting Attainment Numbers Across Rate Tiers
When associating a rate table with a plan component or incentive formula in the Compensation Plans work area, you specify whether to split the rate across tiers.
When the rate spans multiple tiers, you also specify whether rates are fixed or varied within a tier. The Split option applies to only one rate dimension input expression or dimension.
Rate Not Split (Flat Commission)
The application applies a single fixed rate based on the highest tier attained.
In this example: the application uses the transaction amount to get the rates from this rate table.
|
Sequence |
Tier Range (USD) |
Rate (Percent) |
|---|---|---|
|
1 |
0 -- 10,000 |
1 |
|
2 |
10,000 -- 50,000 |
2 |
|
2 |
50,000 -- 100,000 |
3 |
|
4 |
100,000 -- 9,999,999 Always ensure that the final range covers all possible values. |
4 |
Here is the resulting rate table rate for specific transaction amounts.
|
Transaction Amount (USD) |
Rate Table Rate (Percent) |
|---|---|
|
5,000 |
1 |
|
15,000 |
2 |
|
60,000 |
3 |
Rate Is Split (Ramp Commission)
When the transaction value spans more than one rate tier, the application splits the attainment units, such as amount and quantity, across the appropriate tiers.
Two additional selections appear when you elect to split a rate:
-
Fixed, or nonproportional, the most common selection
-
Varied, or interpolated
Split Rates Are Fixed for the Tier (Step Rate)
The application applies a fixed rate to the transaction units within each rate table tier range.
Using the rate table from the first example, this table shows the resulting fixed rates for the same transaction amounts using step rate.
|
Transaction Amount (USD) |
Rate Table Rate (Percent) |
|---|---|
|
5,000 |
1 |
|
15,000 |
1 for the first 10,000 2 for the remaining 5,000 |
|
60,000 |
1 for the first 10,000 2 for the next 40,000 3 for the remaining 10,000 |
Split Rates Vary and are Proportional Within a Tier (Interpolated Rate)
The application uses interpolation to determine the proportional rate when the transaction value spans more than one rate tier and the split attainment value doesn't cover the full range of the final tier. Typically, for this choice, the rate is an amount.
In this example, the application uses the attainment percentage to get the rates from this rate table.
|
Sequence |
Tier Range (Percent) |
Rate (USD) |
|---|---|---|
|
1 |
0 -- 25 |
1,000 |
|
2 |
25 -- 50 |
2,000 |
|
3 |
50 -- 100 |
5,000 |
|
4 |
100 -- 999* |
6,000 |
* Always ensure that the final range covers all possible values.
Calculation Formula: ((Percent Value / (Upper Bound of Tier Range - Lower Bound of Tier Range)) * Rate)
If the percent value is 12, then use 12 in the calculation. Don't convert it to .12. This table shows the resulting rate table rate for specific attainments.
|
Attainment (Percent) |
Rate Table Rate (USD) |
|---|---|
|
25 |
1,000 |
|
40 |
1,000 for the first 25 percent 1,200 for the remaining 15 percent Calculation: ((15 / (50 - 25)) x 2000) |
|
80 |
1,000 for the first 25 percent 2,000 for the next 25 percent 3,000 for the remaining 30 Calculation: ((30 / (100 - 50)) x 5000) |
Proportional Rates with First Tier as a Threshold
This option is the same as the proportional rates within a tier, except the first (lowest) tier isn't proportional. It serves as a threshold to meet first before commission rates apply. Then the tiers from two on are proportional. The lowest tier can have negative or positive from and to values. Here's an example of a 0 percent rate threshold.
|
Attainment (Percent) |
Rate Table Rate (Percent) |
|---|---|
|
-50 |
0 |
|
-50 to 25 |
3 |
|
25 to 50 |
6 |
|
50 to 100 |
9 |
|
100 to 9,999,999 |
9 |