A Rate Table is a special-purpose table used to hold a matrix of commission rates. Use a rate table in cases where the commission rate increases as achievement crosses thresholds.
Rate Tables:
- Can calculate per-credit or aggregate credit commissions.
- Are built with numeric values, fixed values, formulas, or values from data fields.
- Depend on the selections in the Incentive rule to make calculations.
- Can be used in multiple rules.
- Can be effective dated.
Attainment
To understand rate tables, it’s helpful to understand what attainment means in this context. Attainment is, put simply, achievement as a percent of quota or target. For example, if a sales quota is US$100,000 and a payee achieves total sales of $104,000, attainment is 104%.
The rate table then holds a list of rates for ranges of attainment.
Rate tables are generally used in Incentive Rules. The rule can calculate attainment and look up the rate, based on that attainment, in a rate table.
Step Commission vs. Straight Commission
Commission rates can be evaluated two ways: Step and Straight.
When step commission is used, the commission rate steps up as the payee reaches each attainment threshold. In contrast, when straight commission is used, only a single commission rate is applied at the final attainment threshold.
Let’s look at the above example of a rate table that pays a 3% commission for sales below 100% attainment and 5% for sales above 100%. Using step commission, all sales up to 100% of quota are compensated at 3%, and only the remaining 4% of sales are paid out at the higher rate. In contrast, if straight commission is used, the full amount is paid out at the higher rate.
Step Commission is more complex than straight commission but is more common. A single rate table can be used to calculate both step and straight commission, depending on the settings in the rule.
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