Name: Creating a Rule that Pays a Guarantee in SAP SuccessFactors Incentive Management
Uploaded: 2020-6-3
Duration: 445 s
Description: This video demonstrates how to create a compensation plan that calculates a Guarantee. You’ll learn how to create a self-referencing Incentive Rule. This is a rule that has two results: the first calculates the amount of the commission, and the second result calculates the amount that will be paid as a Guarantee.

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<div><div><div>This video demonstrates how to create a compensation plan that calculates a Guarantee. You’ll learn how to create a self-referencing Incentive Rule. This is a rule that has two results: the first calculates the amount of the commission, and the second result calculates the amount that will be paid as a Guarantee.</div></div></div>

Creating a Rule that Pays a Guarantee in SAP SuccessFactors Incentive Management

Hi, my name is Lily.  In this video, I’ll show you how you can create a compensation plan that calculates a Guarantee.    What is a guarantee? While there are several definitions of a Guarantee,  in this case we’ll define a Guarantee as a variable payment advance to a payee.  When would we pay a Guarantee?  Let’s say we want to hire a sales rep, Susan.  She brings proven results at her current employer, where she’s currently earning $5000 a month in commissions.  It would be hard for Susan to move to a new company, as she would have no commissions for the first few months  as she builds up her sales pipeline!  To entice Susan to join our team, we can offer a guarantee of $5000 for 3 months.  The key is that this is only a guaranteed payout and it’s offset by any commissions  Susan might earn during this period.  During Susan’s first month, she would be spending her time in training, shadowing and building her pipeline.  Since she earns no commission, the Guarantee portion of her compensation plan would cover the full $5000. In the second month, Susan has started selling!  She earned $1500 in sales commissions, which is great.  We now only need to pay $3500 of her Guarantee to make up the remainder of the $5000. The third month, Susan earns $3500 in commissions, so we now only pay $1500 toward the Guarantee. By the fourth month, her ramp-up period is over, so even though her commission doesn’t quite reach $5000, she doesn’t  get a Guarantee.  To calculate a Guarantee, I’m going to create a self-referencing Incentive Rule.  This is a rule that has two results: the first calculates the amount of the commission,  and the second result calculates the amount that will be paid as a Guarantee. We also need to make sure that the second result doesn’t take effect after the  Guarantee period ends. First, I’ll create an object that contains the monthly Guarantee amount.  I’ll show how to create a Fixed Value.    To create this Fixed Value, From Compensation Elements,  I’ll click the Fixed Values workspace.  I’ll click the plus icon to create a new Fixed Value and I’ll accept the default dates.  I’ll enter a name.  Description, Business Unit and Fixed Value Type are optional.  I’m going to leave the Period Type blank.    You can set this to whatever the period for the guarantee is, Month, Quarter etc.  Since I know my guarantee is going to have a value of 5000.00 each month for example,  I can leave the Period Type blank and enter 5000 USD in the Fixed Value field.  Then, I’ll click Create.  Now that we have the amount of the Guarantee,  I’ll show you how to create an Incentive rule that calculates the Guarantee.  There are three things to keep in mind about this rule. First, we need to use a condition, so the rule only takes effect if the Participant was hired within the last 3 months.  For this, I’m going to use a function called Fiscal Period End Date.   It checks if the last day of the third period after the hire date has passed.  Second, I’m going to set the Incentive Amount to be a bonus, even though it’s not really a bonus.  This is because the bonus option makes it easier to enter a calculated amount. Third, the value of the Incentive will contain an If statement in which we’ll test if the commission is less than the guarantee.  If it is, we’ll subtract the commission from the guarantee.  If not, we'll just pay the commission. I’ll show you how to create this Incentive rule to calculate the commission. From the Plan Data Menu, I’ll Click Plans Wizard.  I’ll select the 2019 Sales Rep Plan with Guarantee, Click the pencil icon to edit and Click Incentive Rule.  Then, I’ll click the plus icon to create a new rule.  This will be an Aggregated Incentive Rule.  I’ll enter the name.   I’ll enter a Business Unit and a description. And, I’ll click Next.  This is where I’m going to put in a condition that tells the rule only to take effect  for three months after the payee has been hired.  I’ll open the Window Editor.  I’ll select Sales Rep Hire date from the dropdown.  The hire date has to be less than or equal to   (the date I’m going to use is the last day of the third period after the participant’s hire date.)  To do this I’m going to use a Function called Fiscal Period End Date The date will be the sales rep’s hire date. The Period Type will be month.   This means I want the last day of the month.  To enter the month, I’ll select Reference: Period Type from the dropdown and type Month.   The period offset in this case means the number of months after the sales rep’s hire date.  In this case, it’s three months.   So, I will enter a period offset of 3, and the value is selected as an integer.   I’ll click the gray check mark at top right-hand corner to save that condition. And I’ll click Next.  I’ll create a New Incentive Amount for the guarantee. I’m going to make this a bonus because the lay out for a bonus Incentive Rule is easier for entering a calculation. I’ll click Next.  I’ll change the output name.I’ll make sure the Unit Type and the Period Type are correct.  I’ll change the Display Name for Reports.  In the amount field, I don’t just want to enter a specific amount.  I’m going to enter an “If” statement that checks to see if the incentive is higher than the 5000.00 guarantee.  I’ll open the Window Editor and  start by selecting Function and choosing If then Else from the dropdown. The condition will be, is the incentive greater than the guarantee? I’ll start by referencing an incentive from the dropdown I’ll choose the incentive that calculated the commission from the dropdown.  Everything else, I’ll leave at the default and I’ll click OK. If the incentive is greater than or equal to The amount of the guarantee.   The amount of the guarantee was stored in a fixed value.   So, I’m going to reference that fixed value and select monthly guarantee from the dropdown Then I’m going to enter in a statement what will happen if the incentive is greater than or equal to the guarantee Which is, it’s only going to pay out the commission incentive and not try to make up a difference with a guarantee.  So, I’m going to reference the incentive.  I’ll choose the incentive from the dropdown and click OK. Now, if the incentive is not greater than or equal to the guarantee amount, then I’m going to take the amount of the guarantee minus the  incentive. For this, I’m going to get the guarantee once again from the fixed value.   I’ll reference fixed value, monthly guarantee from the dropdown,  I’ll select the Minus symbol then I’ll select the reference incentive, and choose from the dropdown. I’ll Click OK.  Then, I’ll Click the gray checkmark to save.  We said, if the Monthly commission is greater than the amount of the guarantee, then we don’t need a guarantee.   We’ll just pay the amount of the incentive. But if it’s not greater than the guarantee, then we’ll take the amount of the guarantee, subtract  the commission amount.  The difference is going to be the payment.  I’ll click Next, Finish the rule and Save the plan.  Let’s look at the results! You can see that in January, February, and March, Susan receives two payouts: one for her commission, and one for  the Guarantee, which makes up the difference.  Since she was hired in January, beginning in April, she’ll only earn commission. In this video, I showed you how you can use an incentive rule to calculate a Guarantee.  Thanks for watching!