‘Targeted amount with growth targets’ mechanism

Description

A mechanism where the earnings are a fixed amount, but the size of this amount depends on the level of transactional growth achieved.

For this plug-in, growth relative to baseline can be expressed as a number of units, as an amount of money, as a percentage that is calculated using transacted units, or as a percentage that is calculated using transaction value.

Example

A program line for which the earnings are £10,000 if transactional growth is less than £500,000, £20,000 if transactional growth is greater than or equal to £500,000 but less than £750,000, or £30,000 if transactional growth is greater than or equal to £750,000.

Configuration approach

You will be required to:

• Select a growth target type, from a choice of Value, Units, % by value or % by units;
• Configure one or more target bands, with a transaction target and an earnings amount for each (where the target reflects the user’s selection for growth target type and the earnings amount is always a monetary amount, in the currency of the parent trading program), as illustrated below for a GBP trading program and a program line where the growth target type is % by value:

• Select one or more items for each dimension that has been configured for you as included items for the program line.
• Enter baseline figures for transaction value and transaction units.

Enable will select matching transaction lines for the program line, based on:

• The trading partner to which the program line belongs.
• Your dimension item selections.
• The start and end date of the program line.
• The currency of the parent trading program.

To calculate an earnings result for the program line as a whole, Enable will use whichever of the following is appropriate given the growth target type you have selected to determine which target band, and therefore which earnings amount, applies:

• The difference between the total for transacted value across the matching transaction lines and your entry for transaction value if the growth target type selection is Value.
• The difference between the total for transaction units across the matching transaction lines and your entry for transaction units if the growth target type selection is Units.
• The ratio of the total for transaction value across the matching transaction lines to your entry for transaction value if the growth target type selection is % by value.
• The ratio of the total for transaction units across the matching transaction lines to your entry for transaction units if the growth target type selection is % by units.

To calculate an earnings result for each matching transaction line, Trading Programs will use:

• The entries for transaction value from the matching transaction lines to apportion the program line level result for earnings and derive an earnings result for each of the matching transaction lines if the growth target type is Value or % by value.
• The entries for transaction units from the matching transaction lines to apportion the program line level result for earnings and derive an earnings result for each of the matching transaction lines if the growth target type is Units or % by units.

Optional settings

Which configuration options are available in the ‘Mechanism details’ area of the program line configuration page depends on which option you select for the growth target type setting.

If the growth target type is Value or % by value, you will be able (but not required) to use the ‘Mechanism details’ area of the program line configuration page to:

• Enter a value in the Discount % box.
• Select one or more program lines as deduction program lines.

If the growth target type is Units or % by units, no optional settings will be available in the ‘Mechanism details’ area of the program line configuration page.

Discount %

For a program line that uses the Targeted amount with growth targets plug-in, the discount percentage is set to null by default to indicate that there is no (i.e. zero%) discount percentage.

You will have the option of taking no action to accept the default null value for Discount % or typing a numeric value (to a maximum of 3 decimal places) to specify a discount percentage.

Please note — you should enter the percentage value, e.g. 2.5 as opposed to 0.025 for a 2.5% discount.

The expected scenario is one where a user enters a positive percentage (e.g. 2.5) to reduce the qualifying transactions, although the user may enter a negative percentage to inflate the relevant transactions. You will not be allowed to enter a percentage that is greater than 100% or less than -100%.

When a non-zero value is entered into the Discount % box a Discount deducted from setting will become visible.

For a program line that uses the ‘Targeted amount with growth targets’ plug-in:

• The Discount deducted from entry will be set to (and fixed as) Target transactions.
• Enable will use transactions that are net of the discount percentage to determine which target band applies.

Deductions

When using the Targeted amount with growth targets plug-in, no program lines will be selected for the Deductions setting by default.

You will have the option of taking no action to accept this default selection or selecting from a list of the program lines that have been configured for the parent trading program.

If you accept the default option, Enable will calculate both transactions and earnings for the ‘deduct from’ program line in the normal way without referring to the earnings from any other program lines.

To calculate the earnings for a program line that uses the Targeted amount with growth targets plug-in where one or more program lines have been selected for the Deductions setting, Enable will:

• Sum the total program line earnings across the selected deduction program lines to derive a grand total for deducted earnings.
• Calculate the total for transaction value across the included transaction lines for the ‘deduct from’ program line and subtracts the grand total for deducted earnings from this total to derive an adjusted total transacted value for the program line.
• Compare the adjusted total for transactions value with your entry for baseline value and the transactions targets that have been configured for the program line to determine which target band, and therefore which earnings amount, applies to the ‘deduct from’ program line.
• Use the entries for transactions value from the included transaction lines for the ‘deduct from’ program line to apportion the program line level result for earnings and derive an earnings result for each of these transaction lines.

For a program line where one or more program lines have been selected for the Deductions setting and a non-zero discount percentage has been entered, the discount percentage is applied first. That is, the relevant percentage discounts are applied before the earnings from the deductions program line(s) are subtracted.