Determination of Level of Target Achievement (Valuation) 

Use

The level of target achievement is determined in the valuation of the commission case. The level of target achievement indicates to what extent an agreed target has been met. It is expressed as a percentage. This value is then transferred to the remuneration.

It may be beneficial to store remuneration amounts for the lower-level targets and to derive the remuneration of the complex target through a logical link.

Levels of target achievements and information on these are stored in the same way as the valuations in Incentive and Commission Management (ICM) in the valuation lines of the commission document. There are two possible methods:

●     The level of target achievement for an elementary target type is usually calculated in the valuation of the commission case (elementary valuation). When ICM is called as the target administration system, the BAdI: Rules for Calculating Levels of Target Achievement calculates the levels of target achievement. In this case, a calculation rule for the elementary target type must have been defined and specified as the filter criteria for the BAdI.

●     The aggregated target achievement level for the complex target type is calculated in a subsequent step of the commission case, in the complex valuation.

An elementary valuation may be identified as a knockout criterion in the valuation aggregation for target agreements. The result of this elementary valuation is either 0 or 1. This value is multiplied by the weighted total of the other valuations.

In the valuation, the level of target achievement for an agreed business target is 120%, which may call for the target remuneration being paid out.  However, the business target contains an additional knockout criterion – a cancellation rate with a target value of 5%.

If the actual value is below the target value, the knockout does not take effect and the agreed target is remunerated on the basis of the level of target achievement.

If the actual value exceeds the target value, the cancellation rate acts like a knockout, and no target remuneration is paid out.