Modeling in Incentive Management

Each fiscal year, most compensation teams introduce changes and updates to plans to reflect changes in the company’s sales strategies. For example, a new product may be introduced, prices and costs may change, and compensation elements such as commission rates and bonuses may fluctuate. To approach these challenges, it is helpful to have a method to test the effects of changes to a plan without having to create a new plan in the production environment. This can be done in Incentive Management using Modeling.

Modeling is an easy-to-use feature that helps administrators test out different compensation plan scenarios before implementing them, to ensure that proposed changes align with the company's goals and yield the desired outcomes. The modeling tool provides a detailed analysis at both the macro and micro-levels. It allows administrators to see the big-picture impact, as well as the individual payee-level effects. By using historical sales data, the tool can predict the outcomes of proposed changes accurately.

To access Modeling, the user must belong to a role that grants access to the Modeling workspace. As with other roles, this access can include Read, Workspace, Create, Update, and Delete options.

The Promote permission is required for a user to promote a model to production.

To open the Modeling feature, select Modeling from the application menu.

To create a new model:

1. Select Create New Model.
2. Enter a name and description for the model and select Next.
3. Select the calendar and Processing Unit and the source date range for the model. The source range is the dataset that the model will use as a baseline. The more periods included in the source data, the more accurate the model will be. In the example here, the 12 month period of 2023 is used as the source data.
4. Select the plan to model.
5. Select the rule elements for which you would like to make a change.
6. Update the values to model. For example, in the image below, Bikes in Motion is considering changing the commission rates by updating the rate table.
7. Select Save.

To run the model:

1. Select Run Model.
2. Select Proceed.
3. Select the start and end dates for the model calculation run.
4. Select whether to run for all plans or only for the currently selected plan.
5. When the model is complete, select View Report.
6. To view a breakdown by user, select Show → By User.
7. By default, only the measurement is displayed. To see the updated commission, select Model Report By → Incentive.