Defining Attainment Levels and Associated Rewards

Incentive design step

This article is referenced by our incentive design guide as step #4.

Once you have chosen a performance metric (ex: revenue) and a way to measure it (ex: raw value), you have to define attainment levels and associated rewards such as:

• A fixed cash amount
• A value calculated from a performance metric (ex: 5% of total revenue)
• A cash amount calculated from the employee's salary (bonus)
• A prize (ex: trip to the Bahamas)
• A notification via email (ex: congratulatory email)
• A notification on the participant dashboard (ex: special announcement)
• Etc.

Attainment Levels

Attainment levels can be defined as follows:

• Level 1 - <performance value> is between A and B
• Grant reward 2A
• Grant reward 2B
• Etc.
• Level 2 - <performance value> is between C and D
  
• Grant reward 2A
• Grant reward 2B
• Etc.

You can define as many levels as you want. You can also define as many rewards as you want for each level. Obviously, you don't want gaps (or overlapping ranges) between levels. Each level can also have a difficulty, which is useful for reporting.

Formulating threshold values

Attainment threshold values (such as A or B above) should be defined in a way that is compatible with the metric you have chosen. For example, if you have selected "percentage increase in profit" as your measurement metric, then your attainment level threshold should be expressed as percentages. If you have selected "revenue total rank" as your measurement metric, then your attainment level threshold should be expressed as a rank.

Cumulative Rewards

When you define an attainment level, you have to decide whether rewards are cumulative or not. If cumulative, rewards at lower (easier) attainment levels as also granted. For example, you may decide that users who reach level 2 should also receive all rewards at level 1.

Also, consider the special case of a "% of revenue" reward. You should decide whether the percentage should be applied to revenue earned at level 2 only, or to revenue at level 1 and 2 both. We will always offer the most conservative choice by default. If we believe your configuration is incorrect, we will notify you in plan review.

Reward Types

Here are a few example of rewards you can grant at each level:

• Prize
  
  • Choose this option to grant an reward that isn't a cash amount. It may be monetary in nature or not. For example, this could be a lunch with the CEO, extra time off, a trip to the Bahamas, or employee recognition.
• Cash Reward
  
  • Choose this option to grant a fixed monetary cash reward. For example, this may be USD 1,000. This cash award will be assigned to each user or team who attained the associated level. You can choose a target currency, but we will convert each award to each user's currency.
• Percent Of Revenue
  
  • Choose this option to grant a monetary cash reward which depends on revenue. For example, this could be 5% of the total revenue. You can choose whether the percentage should be applied to revenue earned at the current level only, or to revenue earned at both the current and lower attainment levels.
• Percent Of Profit
  
  • Choose this option to grant a monetary cash reward which depends on profit. For example, this could be 5% of the total profit. You can choose whether the percentage should be applied to profit earned at the current level only, or to profit earned at both the current and lower attainment levels.
• Percent Of Score
  
  • Choose this option to grant a monetary cash reward which depends on scoring. For example, this could be 5% of the total score (understood to represent money in your workspace's default currency). You can choose whether the percentage should be applied to scoring earned at the current level only, or to scoring earned at both the current and lower attainment levels.
• Percent Of Salary
  
  • Choose this option to grant a monetary cash reward which depends on the beneficiary's salary. For example, this could be 5% of the beneficiary's salary. Make sure to prorate the percentage to the evaluation period. For example if the evaluation period is quarterly, and you want to grant a 5% salary bonus, use 5% divided by 4 = 1.25% of the employee's salary.
• Announcement
  
  • Choose this option to add a notification on the participant dashboard. This can be a congratulatory message, but it can also be an alert displayed to a sales manager.
• Badge
  
  • Choose this option to display a badge on the beneficiary's personal incentives dashboard. This can be used for gamification.
• Email
  
  • Choose this option to send an email. This can be a congratulatory email, but it can also be an alert sent to a sales manager.
• No Rewards
  
  • Choose this option to track the fact that the attainment level does not result in any reward. This is useful for reporting.

For more information on how to set attainment thresholds, click here.

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