Resources · Glossary

The compensation glossary.

Plain-language definitions for the 64 terms used across inLOGIC and sales performance management.

Back to resources

A

Attribute: Elements that can be factored into any rule writings.

B

Base Salary: A fixed income that reflects cost of labour.
Bi-weekly: A type of period occurring every two week typically on the same day of every other week. It is differentiated from Semimonthly occurring twice a month, typically on every 15th and 30th.
Bonus: A bonus also is a type of incentive. In most cases, a bonus payment is tied to actual performance compared to a goal (e.g., a sales quota). It can be capped or uncapped.

C

Child: The lower level of data is called Child. In Organization Hierarchy, subordinates are considered as children of a parent who is one level above them. Also, when you build a relationship between Transaction and Sub-transaction table, sub-transaction data is always referred to as Child to a parent transaction data.
Capping: In some cases, capping may be necessary to avoid overpayment due to windfalls or inaccurate quota-setting. Capping methods include a total cap on earnings, a percentage limit bonus payment, a sales-credit limit per order or account and a regressive (declining rate) formula that limits earnings.
Commission: A commission is a type of incentive. It can be expressed as a percentage of sales dollars, a percentage of gross margin (profit) or a dollar amount per unit sold.
Credits: Sales personnel earns sales credits for sales activities.
Cumulative Period: It considers year-to-date performance. A salesperson who is measured quarterly but on a cumulative year-to-date basis must continue to achieve results that meet annual objectives.

D

Direct Measurement:
Discrete Period: It measures performance without reference to previous periods.
Draw: A compensation payment paid in advance to encourage sales performance either recoverable or non-recoverable.

E

Effective Date: The effective date specifies the date when the sales compensation rules and policies are executed. The effective date is different from the Start Date and/or the Transaction Date.
Eligibility: The job must involve both contact with customers and a persuasion role, which means the employee attempts to persuade customers to purchase from the organization.
Expiry Date: The Expiry Date can be set for Plans or Measurements that are expected to be effective during the certain time frame only (e.g., special product promotions, holiday incentives, etc.). As of the Expiry Date set by the user, the plan or measurement will become no longer in effect.

F

Farmers: Sales reps who are selling products to existing customers whereas Hunters refer to those who sell to new customers in sales territory management.
Field: The space where you can store data.
Field Label: A General User Interface (GUI) helps you interact with a computer through easy-to-read screen display. A Field Label is a display format of various elements that are shown in GUI (User Interface, i.e. Web browser). They appear on user’s screen such as in table, edit/view mode or reports (e.g. First Name).
Field Variable: Unlike a field label, a Field Variable always corresponds with the field label as a format that the system can understand especially when writing rules so that the system can process the data behind user’s GUI. (e.g. firstName). Field variable always starts with a lower case, and cannot have a space between words.
Forecast: Company’s overall performance objectives.
Formula: An incentive formula relates the pay opportunity to performance achievement. (Unlinked incentive formula, Adjusted-value incentive formula, and Linked-incentive formula)

G

Group Management:
GUI: General User Interface (GUI) refers to any computer or electronic device where human-machine interactions occur. Through GUI, humans feed data or enter command expecting appropriate feedback from machines.

H

Hierarchy: A pyramid-like organizational structure where one person is responsible for a functional area with one or more subordinates in charge of the sub-functions.
Hunters: Generally hunters are considered as the sales personnel who are selling the products to new customers whereas Farmers refer to those who manage the existing customers in sales territory management.
Hurdle: A stated level of performance must be achieved on one measure before another measure (and, therefore, a bonus or commission payment) can be activated.

I

Import: An easy way of populating data from external sources. e.g., spreadsheets in .XLS or .CSV format.

J

Just-In-Time (JIT): A term used to describe the availability of goods and services when needed. Organizations who operate using just-in-time principles are typically very acute to predict consumer needs, in order not to overstock, yet ensure sufficient product in inventory for manufacturing or delivery when customers demand.

K

Key Performance Indicators (KPIs): It refers to the primary measures an organization uses to measure their own internal performance.

L

Leverage: Leverage represents the upside earning opportunity. A common leverage amount for sales positions is a “triple,” which means that three times the at-risk portion of the mix equals the upper earning opportunity for the top 10 percent of all performers.
Lookup: Also known as quota, target, and/or territory. There are two types of lookup; Payee lookup and Plan lookup.

M

Matrices: With matrices, two competing performance measures are tied together so that payout rewards are highest when outstanding performance is achieved on both.
Measurements: Performance measurement for incentive compensation purposes includes selecting the most appropriate measures to evaluate sales results, establishing standards to define expectations (e.g., goals and quotas) and tracking actual accomplishment.
Mix: The mix is the relationship between the base salary and incentive-opportunity component. Mix is expressed as a percentage of “target total compensation,” which is the pay level for achieving expected performance. The mix is realized when results are achieved at the “meets expectation” level. For example, a 90/10 plan reflects a mix of 90 percent base salary and 10-percent incentive opportunity.
Multipliers: Multipliers are used to calculate a second commission or bonus payment based on incentive earnings from the primary performance measure.

N

Node: It literally means a knot that defines a parent-child relationship between all nodes in a hierarchy.

O

Override: The amount of commission granted to sales managers calculated as a percentage based on the sales or commissions of his or her subordinate sales reps.

P

Parent: The higher level of data is called Parent. In Organization Hierarchy, a person has a subordinate, s/he becomes a parent of the subordinate. Also, when you build a relationship between Transaction and Sub-transaction data, transaction data is always referred to as a parent.
Payee: In general, a payee is referred to as a person who is going to receive cash incentives given that he or she is eligible for them through his or her sales activities.
Payee lookup: It allows you to set up sales quota, target sales amount, etc. at individual level.
Payment: The outcome of calculation to determine the amount of commissions and/or bonuses that payees are eligible to receive. Unlike Credit, Payment is always expressed as monetary metric.
Period: A calculation cycle when all the transactional data is collected to determine the payout amount usually at the end of the cycle. The period can be diverse as weekly, monthly, quarterly and/or yearly.
Plan lookup: Unlike Payee lookup, it allows you to set up sales quota, target sales amount, etc. at a larger scale of the group (e.g. team, department, organization, etc.).

Q

Quota: Performance objectives set for individual sales reps or sales teams. It defers from the overall organizational objectives, but is aligned with its business strategies to boost sales performance as well as reasonably reward sales personnel without overpaying or underpaying them.
Quota Adjustment: Changes in quota level during the fiscal year for various business related external and/or internal issues.
Quota Allocation: A method to determine quota level against a various type of measures to distribute the company’s forecast to sales personnel.
Quota Relief: A practice to lower the quota in some occasions such as customer account changes or mid-year territory changes.

R

Relational Database: A database is a collection of related tables where individual records can be stored in a series of rows and columns.
Required Field: A field that cannot be left blank, and the data input is mandatory.
Reversal:A partial or total modification in payment that a sales rep earned according to the rules and policies. For example, when a customer cancel the contract during the trial period, the rep’s sales commission will be reversed according to the cancellation policy.
Roll Over: Horizontal sales crediting practice to provide credits to individual contributors who are not the primary seller, but at the same level of position as the primary seller (e.g. Sales Support Team).
Roll Up: Vertical sales crediting practice to provide credits to individual contributors who are superior to the primary seller (e.g., Sales rep’s credit rolled up to Sales Manager)

S

Semimonthly: A type of compensation period occurring twice a month typically on every 15th and 30th. It is differentiated from bi-weekly occurring every two weeks.
Start Date: The Start Date indicates the date a user initiate the configuration of the system. This particular date has no relevance or impact on the Effective Date set in rule writings.

T

Target Cash Compensation (TCC): The target cash compensation for a sales job represents the pay level for achieving expected performance.
Threshold: A threshold is the minimum level of performance obtained before an incentive is paid. Thresholds help offset the cost of base salaries and provide performance standards.
Transaction Date: In general, the Transaction Date represents the time at which the ownership of the goods and services is transferred.

U

Unique Field: Unique filed is useful when updating the entire table without overwriting existing data.

V

Versioning: Record keeping mechanism that is unique to inLOGIC. The version control allows you to manage dispute resolutions, audit, and payout reconciliation easy and handy by tracking changes and corrections in transaction data.

W

Windfall: A time when a sales rep receives an unexpectedly large amount of additional pay accrued as a result of organization-wide events (e.g., territory realignment) or consumer behaviours (e.g., unforeseen purchases).

Conditional

if: _if_ opens up the _if-then-else_ statement, and it commands the system to evaluate a certain criteria followed by _if_.
then: When the _if_ clauses evaluate to true, the statement followed by _then_ will be executed.
else: When the _if_ clauses evaluate to false, the statement followed by _else_ will be executed.
else if: When there are more than one conditions to test, from the secondary commands, you can nest the _if_ statements using _else if_ A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Operators | Conditional | Symbols