Overview of Performance Measures

Use performance measures to track participant progress, or attainment, toward a defined organizational goal.

Here are some examples of what to base performance measures on:

Volume production, such as dollars or sales units

You can use sales volume, revenues, market share, or profits as part of this type of measure.
Sales effectiveness, such as product mix sold, customer retention, price management, and order size
Customer impact, including customer satisfaction survey data and loyalty
Resource usage, including productivity and use of partners

As this chart shows, performance measures consist of goals, credit categories, a measure formula, and scorecards. The resulting attainments serve as input to expressions or rate tables.

The key aspects of performance measures and plan components aspects that use the resulting attainment

Create and manage performance measures in the Compensation Plans work area.

Goal

You can optionally define a goal to use to evaluate participant attainment: You can use any of the goal numbers (target, interval target, period target, and interval-to-date (ITD) target) in expressions, as they're available for attainment calculation. Use measures without goals when you want to pay based on management by objectives (MBO) or percentages of revenue or quantity. For example, the percentage of all real estate or insurance sales by the salesperson.

Credit Category

If a performance measure uses a transaction, credit attribute (such as margin), or participant attribute, then associate the appropriate credit category with it. When associating a credit category with a performance measure, you can optionally set these factors:

Credit factors to provide increased credits, such as requiring 125 percent attainment for the first quarter
Transaction factors to provide different weights for different transaction types, such as orders count as 60 percent of attainment while invoices count as 40 percent

Do not assign a credit category to a performance measure if you're only referencing the output of another performance measure in its measure formula. It creates unnecessary records in the calculation tables and can cause a calculation error. If a per-event plan component has multiple process-individually measures, then the measures must have the same credit categories. Group-by measures for a per-event plan component can have different credit categories. A per-interval plan component with multiple measures can have different credit categories.

If you include one or more credit categories for a measure, then either the input expression or the measure output expression must include a transaction or credit attribute. You don't need to include a credit category for a Group By measure, if that measure expression doesn't include a transaction or credit attribute. For example if a Group by Measure GBM1 expression simply refers the ITD Output of another Measure GBM2, Measure.GBM2.ITD Output, then you don't need to include a credit category for Measure GBM1.

Measure Formula

The formula contains an expression that the calculation process uses to compute the attainment for a set of credit categories. It also has the period of measurement, called performance interval, such as Month, Quarter, and Year.

The measure formula is where you:

Specify attainment as revenue, units sold, percentage of attainment, score, and so on.
Optionally, specify to use a rate table as a scorecard to look up and transform the calculated result into a score or points.

Scorecard

The scorecard determines the compensation score for attainment calculations, such as when you want to use customer satisfaction scores to calculate bonuses.