‘Targeted unit rate with monetary targets’ mechanism

Description

A mechanism where the earnings are an amount per unit volume, the size of this amount depends on the level of target achieved, and target is expressed as an amount of money rather than a number of units.

Example

A program line for which the earnings are £0.50 per unit if transactions is less than £500,000, £0.65 per unit if transactions is greater than or equal to £500,000 but less than £750,000, or £0.80 per unit if transactions is greater than or equal to £750,000.

Configuration approach

You will be required to:

• Configure one or more target bands, with a transactions target and a per unit rate for each (where each transactions target is a monetary amount, in the currency of the parent trading program), as illustrated below for a GBP program:

• Select one or more items for each dimension that has been configured for you as included items for the program line.

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 determine which target band, and therefore which per unit rate, applies to the program line, Enable will compare the total for transactions value across the matching transaction lines with the transaction targets that have been configured for the program line.

To calculate an earnings result for the program line as a whole, Enable will multiply the per unit rate that applies to the program line by the program line level total for transaction units.

To calculate an earnings result for each matching transaction line, Enable will multiply the per unit rate that applies to the program line by the entry for transaction units that applies to the transaction line.

Optional settings

You will be able (but not required) to use the ‘Mechanism details’ area of the program line configuration page to:

• Untick the Retrospective? tick box.
• Tick the Separate target and earning transactions? tick box.
• Enter a value in the Discount %
• Select one or more program lines as deduction program lines.

Retrospective vs Non-Retrospective

For a program line that uses the Targeted unit rate with monetary transactions plug-in, the Retrospective? tick box is ticked by default. When the Retrospective? box is ticked, the earnings will be calculated with the achieved rate applied retrospectively, or ‘back to zero’.

If the Retrospective? box is unticked, Enable will instead perform a non-retrospective calculation that involves applying each of the achieved rates to the transactions that ‘belong’ to the corresponding target band.

Consider for example a program line that has target bands as follows:

If the totals for included transactions are 18,000 units and £1,800,000, Enable will calculate the earnings as:

• £2.50 per unit x 18,000 units = £45,000 if the Retrospective? box is ticked.
• £2.00 per unit x (the equivalent in units of £1,500,000 - £1,000,000) + £2.50 per unit x (the equivalent in units of £1,800,000 - £1,500,000) if the Retrospective? box is not ticked.

To derive the equivalent in units of a particular amount of money, Enable will multiply the monetary amount by A / B, where A is the program line total for transaction units and B is the program line total for transactions value.

For the example program line above, the conversion factor is 18,000 units / £1,800,000 or 0.01 units per £. Hence for this program line, Enable would calculate the earnings as follows if the Retrospective? box is not ticked:

• (£2.00 per unit x 0.01 units per £ x (£1,500,000 - £1,000,000)) + (£2.50 per unit x 0.01 units per £ x (£1,800,000 - £1,500,000)) = (£2.00 per unit x 5,000 units) + (£2.50 per unit x 3,000 units) = £17,500.

The above example shows how the program line level result for earnings would be calculated for a non-retrospective program line that uses the ‘Targeted unit rate with monetary transactions’ plug-in.

To calculate an earnings result for each of the included transaction lines for such a program line, Enable uses the entries for transactions value from the included transaction lines to apportion the program line level result for earnings and derive an earnings result for each of the included transaction lines.

Separate target and earning transactions?

For a program line that uses the Targeted unit rate with monetary transactions plug-in, the Separate target and earning transactions? tick box is unticked by default.

When the Separate target and earning transactions? box is unticked:

• You will be required to configure a single set of dimension items as included items for the program line, where the set of included items contains at least one item for each dimension that has been configured for you.
• Enable will:
• Use the set of included dimension items, in conjunction with the start and end dates of the program line and the currency of the parent trading program, to select a single set of matching transaction lines for the program line;
• Use the set of matching transaction lines, in conjunction with the target bands that have been configured for the program line, to calculate the earnings.

When the Separate target and earning transactions? box is ticked:

• You will be required to configure two sets of dimension items — one for target transactions and one for earning transactions — where each set of included items contains at least one item for each dimension that has been configured for the client.
• Enable will:
• Use the two sets of included dimension items, in conjunction with the start and end dates of the program line and the currency of the parent trading program, to select two sets of matching transaction lines for the program line — one for target transactions and one for earning transactions;
• Use the target transaction lines to determine which target band, and therefore which per unit rate, applies to the program line;
• Use the earning transaction lines to calculate the earnings for the program line;
• Assign earnings to all of the earning transaction lines and none of the target transaction lines.

Discount %

For a program line that uses the Targeted unit rate with monetary transactions 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 unit rate with monetary transactions’ plug-in:

• The Discount deducted from entry will be set to (and fixed as) Target transactions (regardless of whether the Separate target and earning transactions? box is ticked).
• Enable will:
• Use transactions that are net of the discount percentage to determine which target band applies;
• Ignore the discount percentage when applying a per unit rate to calculate the earnings (for the program line as a whole or for the included transaction lines).

Deductions

When using the Targeted unit rate with monetary transactions 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 unit rate with monetary transactions 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 transactions value across the included transaction lines for the ‘deduct from’ program line (for target transactions specifically if the program line has separate target and earning transactions) and subtracts the grand total for deducted earnings from this total to derive an adjusted transactions total for the program line.
• Compare the adjusted total for transactions value with the transactions targets that have been configured for the program line.
• Use data on transactions units that have not been adjusted for the deducted earnings to calculate the earnings.

Please note — 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.