‘Targeted unit rate with growth targets’ mechanism

Description

A mechanism where the earnings are an amount per unit volume, but the size of this amount depends on the level of transactions 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 transactions in units, or as a percentage that is calculated using transactions value.

Example

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

Configuration approach

Within Enable, 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 transactions target and a per unit rate for each (where the transactions target reflects the user’s selection for growth target type and the rate is always a per unit rate in the currency of the parent trading program), as illustrated below for a program line where the growth target type is % by units and the currency of the parent program is GBP:

• 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 transactions 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 your growth target type selection to determine which target band, and therefore which earnings amount, applies:

• The difference between the total for transactions value across the matching transaction lines and your entry for transactions 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 transactions value across the matching transaction lines to your entry for transactions 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, Enable will multiply the per unit rate that applies to the program line as a whole by the entry for transaction units that applies to the transaction line.

Optional settings

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

• Tick the Fully retrospective? tick box when Retrospective? is also already ticked.
• Tick the Separate target and earning transactions? tick box.

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:

• Tick the Fully retrospective? tick box when Retrospective? is also already ticked.
• Tick the Separate target and earning transactions? tick box.
• Enter a value in the Discount % box.
• Select one or more program lines as deduction program lines.

Fully retrospective vs retrospective

For a program line that uses the Targeted unit rate with growth targets plug-in, the Retrospective? box will be ticked by default.

If the Fully retrospective? box remains unticked, Enable will perform a partially retrospective calculation that involves applying the achieved rate ‘back to baseline’ rather than ‘back to zero’.

Alternatively, when both of these boxes are ticked, the earnings will be calculated with the achieved rate applied retrospectively, or ‘back to zero’.

Consider for example a program line that has a growth target type of % by value with target bands as follows:

If for the above program line the total for included transactions is £23,500 and the baseline value is £20,000 (such that the % growth by units is 23,500 / 20,000, or 117.5%), Enable will calculate the earnings as:

• £2.50 per unit x (23,500 units - 20,000 units) = £8,750 if the Fully retrospective? box is not ticked but the Retrospective? box remains ticked.
• £2.50 per unit x 23,500 units = £58,750 if the Fully retrospective? box is also ticked.

The above example shows how the program line level result for earnings would be calculated for a partially retrospective or non-retrospective program line that uses the Targeted unit rate with growth targets plug-in. To calculate an earnings result for each of the included transaction lines for such a program line, Enable will use:

• The entries for transactions 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.

Separate target and earning transactions?

For a program line that uses the Targeted unit rate with growth targets 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 you.
• 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 growth targets plug-in, you will only be able to configure a discount percentage if the growth target type is Value or % by value. If the growth target type is Units or % by units for a program line that uses the Targeted unit rate with growth targets plug-in, the Discount % setting will be hidden.

By default, the discount percentage is set to null 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 becomes visible.

For a program line that uses the Targeted unit rate with growth targets plug-in and has a growth target type of Value or % by value:

• 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 is 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

For a program line that uses the Targeted unit rate with growth targets plug-in, you will only be able to select deduction program lines if the growth target type is Value or % by value. If the growth target type is Units or % by units for a program line that uses the Targeted unit rate with growth targets plug-in, the Deductions setting will be hidden.

The Deductions setting allows you to select one or more program lines whose earnings should be deducted from the qualifying transactions before the program line results are calculated for the ‘deduct from’ program line.

By default, no program lines are selected for the Deductions setting.

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 growth targets plug-in where one or more program lines have been selected for the Deductions setting, Trading Programs 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.
• Use data on transactions value that have been adjusted for the deducted earnings to determine which target band applies.
• Use data on transaction units that have not been adjusted for the deducted earnings to calculate the earnings.

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.