Variable compensation plans, which at one time were A good ICM solution can help you achieve those goals.
limited to a company’s sales force and senior management,
play an increasingly important role at all organizational levels. This white paper describes the applicability and functions asso-
In today’s economy, it is essential to align high-cost items like ciated with new incentive and commission software technologies.
your compensation plans and their administration with your It explores the many sales challenges in today’s competitive mar-
overall corporate goals. ket and describes some key considerations in designing and re-
viewing your compensation plan. It then investigates some of the
You can greatly enhance your organization’s productivity by common issues associated with implementing an incentive and
rewarding your employees with variable pay according to their compensation plan, and it provides an outline for implementing
performance and business contributions. More important, you such a plan. The final sections describe SAP® Incentive and Com-
can align desired behaviors with business strategy and help all mission Management and examine the many ways that the appli-
employees develop a connection between their contributions cation can benefit your staff, managers, administrators, IT teams,
and your organization’s goals. and the organization as a whole.
Incentive1 and commission management (ICM) has an impor-
tant part to play in achieving positive business results. This is
true both for organizations that derive significant revenue from
an externally facing sales force (such as companies in the auto-
motive, retail, telecommunications, insurance, and e-business
sectors) and for organizations that can benefit from a greater
focus on key performance indicators (such as project-driven
activities in the construction and IT sectors).
Various factors might motivate you to design a sales incentive
plan. Perhaps your company is in a highly innovative industry
in which an aggressive sales force is vital to entering and
penetrating the market with new products. Maybe you want
to change your current incentive plan to encourage employees
to obtain specific results, such as retaining existing business.
Maybe your company has a fast-changing organizational
structure, dynamic sales channels, and frequent new-product
introductions. Perhaps you want to motivate your internal
workforce by replacing fixed-salary agreements with
See the glossary at the end of this paper for a description of this and other terms set in bold type.
THE CHALLENGES OF TODAY’S
Compensation and its management are two of the largest
expenditures for many organizations. These costs include FINANCE
dollars spent on actual compensation, as well as administrative
expenses and the costs of aligning compensation corporate
SUPPLIER Purchas- Manu- Distri- CUSTOMER
goals (including the opportunity costs of not achieving business Marketing
ing facturing bution
objectives). tracts tracts
The most effective compensation plans – and the software INTRANET
systems that support them – evolve with your organization INTERNET
and are immediately scalable to accommodate changes, such
as expansion into new territories, sales channel variations, Figure 1: Product-to-Market Process
or the introduction of new products. The new generation of
incentive and compensation management (ICM) software Whether your organization sells intangibles (such as financial
can help both the sales force and the organization as a whole. services) or goods (such as cars), an ICM solution can play a key
By ensuring that variable pay is leveraged to improve corporate role in both your sales management process and in achieving
performance, such technology can be especially beneficial in the overall business objectives of your organization. In today’s
helping your organization obtain maximum value from your fast-moving business environment, many enterprises amend
payroll. their compensation plans annually. Your plans must also be
capable of evolutionary change that reflects the new ways in
In an era of Internet-enabled transactions, your business must be which your business is conducted and the new products and
able to transform rapidly or risk losing market share. No longer is markets you must address. At the same time, your plans must
it sufficient to invest heavily in lengthy product development, adapt readily to a shorter life cycle for those products and
hoping the market will remain static long enough to reward your markets.
R&D efforts. Succeeding in today’s business markets requires
rapid concept-to-market timelines, and third-party alliances are You can elevate the sales process to a more strategic level by
often needed to complete the sales chain. All channels affiliated encouraging your sales staff to be more sensitive to your orga-
with this product-to-market process must be closely integrated nization’s business needs and to find solutions that give added
with your corporate strategy. value to customers. Increasingly, however, sales management
lacks a system infrastructure that is flexible and robust enough
The speed of change in business methods today, and in the to support these objectives.
delivery of business solutions, must be matched by an equally
rapid change in the system infrastructure that supports your One reason for the increased needs in system infrastructure
individual business processes. In implementing any compensa- is that, in an effort to improve the performance of the or-
tion plan, your organization must overcome the gap between its ganization as a whole, many forward-thinking organizations
compensation strategy and the ability of its existing system have extended incentive-based compensation plans into com-
infrastructure to support that strategy. pany divisions that have historically received only fixed pay.
Such innovations have changed the rules about contribution Meeting Your Organization’s Vision
and reward, as well as motivation and retention. Whether the Any investment in organization-wide management tools is a
net result has been new levels of productivity, efficiency, and strategic decision. The management support provided by an
profitability or greater confusion and an inability to manage ICM solution helps you achieve an optimum balance among
as complexity increases depends largely on both the rules and alignment, cost control, and productivity.
system support for the new compensation plans.
Aligning motivation and reward with organizational strengths
and direction can be a central force in the rapid evolution of the
global economy. Organizations must be able to work with such
metrics as product profitability, repeat business, and the time
from order to fulfillment. By establishing stakeholder-centric INCENTIVE AND
compensation plans, along with the right management tools, MANAGEMENT
your organization can ensure that everyone is working toward
the same goals.
COST CONTROL PRODUCTIVITY
At a strategic level, incentives and commissions can help Figure 2: The Balance Among Alignment, Cost Control, and Productivity
improve employee performance, productivity, and morale –
leading to better cost management. Incentive plans that are Alignment
both innovative and appropriate for the business are ideal for Organizational alignment and focus greatly increases the
communicating the goals of your organization, measuring per- chance that your enterprise will achieve its strategic goals.
formance, and rewarding strategically aligned behaviors. Smart A well-conceived incentive compensation plan motivates and
sales- and incentive-management technologies integrate sales promotes strategically desirable behaviors. The right incentives
channels within a broader business model, motivating employ- make counterproductive agendas hard to justify and sustain,
ees and increasing product quality, profitability, and customer promoting collaborative effort in pursuit of a shared
satisfaction. organization-wide goal.
Automated sales compensation systems produce primarily the
following cost savings:
• Improved productivity for commission administrators
because compensation administration becomes less labor
intensive, faster, and more accurate
• Reduced overpayments, lessening a common problem for
• Elimination of unauthorized or unintentional booster
commission rates for nonperformers
Productivity Your organization must be clear about the roles and expecta-
Automating ICM functions improves productivity by reducing tions for your sales force. This may include, for example, empha-
the time spent on managing the plan and rechecking error-prone sizing the connection between business development and achiev-
manual calculations. Developing reports on sales productivity ing sales volume targets, developing new business as opposed to
and commissions requires an understanding of the extended sales managing existing business, developing cross-selling opportuni-
process – especially the alignment of internal sales considerations, ties, or following through with after-sales care. All these factors
your company’s key business imperatives, and the current fit with combine to determine, for each sales group, the appropriate
systems developments and capabilities in the sales arena. Sales balance between fixed-pay and variable-pay components, the
management reports should thus provide the following: mix of incentive-pay arrangements (bonuses versus commis-
• Timely reporting sions), and the rules for calculating commissions and incentives.
• Actionable data
• Ease of use Your managers, especially those in sales, can’t achieve these
• Ease of access desired results without the necessary systems infrastructure.
• Accuracy With an ICM solution, you can adapt rapidly to changing busi-
ness conditions and easily track the history of your incentive
Actionable data in management reports shows your sales force’s and commission compensation plan.
performance from several perspectives. You might produce a
rank order of performance, for example, or a table of greatest Key Challenges in Designing a Compensation Plan
percentage increases. With the flexibility to organize your data The first challenge for management in designing a compensation
in these ways, you can proactively manage sales, rather than plan is to align incentives in an evolutionary sales process that in-
retrospectively view your performance. Ease of use in reporting volves many areas of your organization. Such an alignment gives
is key to giving individuals ready access to their relative ranks or your plan a contextual framework, allowing all staff members
performance. (especially those who are not part of the sales force) to understand
the pay decisions that support the organization’s values, culture,
An ICM solution helps your organization motivate and manage and business strategy. A staff that understands your corporate
your employees through different types of remuneration. expectations – and how individual members can benefit by
By combining report-generation software with commission- following your corporate strategy – gives your organization a
calculation tools, it can also help you process all transactions, competitive advantage.
agreements, and data associated with your incentive compensa-
tion plan and generate swifter and more accurate sales reports. The second challenge facing complex organizations today is to
develop a compensation plan that creates and harmonizes incen-
tives for the many different parties involved in the sales process,
including associates, affiliates, distributors, and Web-based partici-
pants. An ICM solution should effectively handle compensation
for all parties, including those who are indirectly involved with
Your overall corporate strategy must align all internal and volumes of data and frequent changes to base-compensation
external sales channels. For the many organizations that use rules. An ICM solution should be able to deal both with large
multichannel distribution, having timely, accurate information volumes of data across an elongated sales process and with com-
makes it much easier to coordinate new sales goals and perfor- plex, multilevel compensation calculations.
mance metrics. Although Web-enabled technologies can enhance
communication within your organization, the long-term success DECISION SUPPORT
of this approach depends on arranging the right information
around the right strategy or framework with minimum effort.
A third challenge in designing a compensation plan is to ensure DECISION SUPPORT
that the plan is sufficiently responsive to changing market condi- Rules
tions and business priorities. A well-designed ICM solution meets Accounts
each of these strategic challenges. For example, because a variety
of parties may be involved in the sales transaction and commission
processes, calculation rules should be linked across all areas of SETTLEMENT & ACCRUALS
vested interest, and all compensation results and rule changes
should be quickly processed.
The Compensation Gap Figure 3: Integration of ICM Functions with Upstream and Downstream
Variable compensation and incentive plans – previously restricted Applications
to an organization’s sales force – are increasingly available to em-
ployees who are not salespeople. The plans have become both Often, compensation systems must interface with multiple legacy
a means for motivating and aligning employee behavior with systems that may include sales operations data, financial systems,
overall corporate strategy and a method for ensuring that your human resource systems, customer relationship management
an organization can afford the compensation for such behavior. systems, and strategic enterprise management applications. Given
As a result, the volume of information that your organization the importance of intelligent collaboration in today’s economy,
must capture and process has increased significantly. This, in your organization must be able to develop a business model that
turn, has created a compensation gap: the gap between the com- can accommodate Internet connectivity, a range of legacy systems,
pensation strategy and the ability of the systems’ infrastructure and all combinations of upstream and downstream interfaces in
to implement that strategy. a wide-ranging sales and supply process.
Even today, compensation planning tools often depend on By integrating data and information from your sales-processing
spreadsheets whose embedded macros and encryptions become and financial systems with your customer relationship manage-
fragile and unwieldy when scaled beyond their very modest ment, channel partner, and sales automation systems, an ICM
capacities. This weakness is exacerbated when organizations allow solution makes it easier to track, monitor, manage, and reward
these tools to be managed locally, with no central control. the sales behaviors that are strategically imperative to your busi-
Surprisingly, a large number of otherwise sophisticated organiza- ness. By helping you reward strategically aligned behavior, an ICM
tions still rely on this mode of compensation management. For solution links the people and processes in your organization with
some time now, market demand has been strong for a flexible, your overall business goals.
enterprise-applicable infrastructure that can handle large
Implementing an incentive and compensation management plan Deciding on a Remuneration Strategy
is not a one-time event. It is an iterative, ongoing process that is An effective remuneration strategy reflects your overall business
defined by a closed management loop model (see Figure 4). strategy – for both your product offerings (how you motivate
sales for certain product lines and market segments) and your
Amend compensation plans organization (how you motivate various individuals and groups
for future periods
within your workforce). A complete ICM solution should offer a
calculation process that addresses both your corporate strategy
and the individual compensation programs within your
compensation INCENTIVE AND compensation
Your corporate strategy is defined by valuation rules. These rules
results plans aligned
(per region, MANAGEMENT with corporate evaluate an object, such as a product, based on its profit con-
product line, business strategy
customer tribution – differentiating key products from peripheral products.
hierarchy . . .)
The valuation occurs independent of the individuals involved,
which lets you push activities for specific products.
Calculate commissions Valuation results are included in calculations for individual com-
Prepare settlement operations pensation programs, according to the particular remuneration
rules for those individuals, to determine their exact commission
Figure 4: Closed Management Loop Model amounts. A complete ICM solution lets you define remuneration
rules for the compensating managers, organizational units, em-
Initially, your management team determines what compensation ployees, partners, and other individuals and offers the following
strategy to use, making sure it is in line with the overall business features:
strategy of your organization. Information from the operational • A flexible organizational structure
systems specifies the activities for each member of the team who You should be able to represent the specific network or
is directly involved (such as the marketing or sales staff). With this hierarchy of your workforce that receives variable compensa-
information and information about an individual’s compensation tion and make multilevel calculations for variable compensa-
plan, an ICM solution can calculate commission. The result of tion related to a single business transaction. For example, a
this calculation is posted in the system and prepared for settle- sales representative may receive a direct reward for a sale,
ment at the end of the compensation period that your manage- whereas the representative’s manager may receive an indirect
ment team has set. reward for the same transaction, perhaps by gathering bonus
points in the commission account.
You can then measure and analyze the commission information • A master record for the commission recipient
to assess the effectiveness of both your compensation plan and You can manage all relevant data concerning remuneration for
your organization’s sales staff and processes. Based on the results a particular person or group within your organization through
of this analysis and knowledge of any changes that have occurred a master record for the commission recipient.
in the organization’s business objectives and associated marketing • A master record for the commission contract
activities, your management team can then decide how to alter A commission contract defines the rules of the remuneration
the compensation plan. agreement between the organization and its business partners
(commission recipients); it contains all rules for calculating and
processing commissions and bonuses. Each commission Your upstream system should provide information for each
contract is based on a template that defines common rules commission case, including data on business partners (such as
for specific groups. All managers within your company sales agents), business object (such as telecommunications
might, therefore, have individual commission contracts contracts), and business activities (such as new sales, up-selling,
that are derived from the same standard contract. Both the or cross-selling by business partners). After receiving this data,
commission contract and the relevant business partner are an ICM solution should automatically:
assigned to a specific place in the organizational structure. • Determine the participants (business partners or commission
You can store versions of commission contracts (contract recipients)
versions for successive years, for example) according to the • Valuate the transaction for the relevant business object
dates and times that they were created and validated. • Calculate remuneration for the commission recipients
• Settle and disburse the remuneration
In the commission contract, you establish the relevant business
objects (such as a car sale or mobile phone subscription) and the The results from this data processing can then be posted as com-
level of compensation for each transaction related to the object mission documents. If the processing can’t be completed, the
that the commission recipient successfully concludes. The com- commission case is set to pending and forwarded to the work lists
pensation can be scaled (increased for specific volumes of sales), of the commission administrators for manual handling. At the
time bound (increased for sales made within a specified time peri- end of the compensation period, the commission account and all
od), or split between two or more commission recipients who are its documents are closed, and the relevant data is transferred to
working as a team. the settlement system for payout to the recipients. The following
sections take a closer look at how the execution process works.
In this way, an ICM solution can reflect the specific compensation
plan you have designed. Integrating ICM functions with strategic
enterprise management makes it easy for senior management to mission
review the success of your compensation plan. As a result, man-
agement may amend the sales network or hierarchy, the commis-
sion contracts (either standard or individual), the sales channels Com- Calculation
or products, and the calculation rules to ensure that your organi- mission tion
zation continues to meet its overall business objectives.
Determine Participants Commis-
Valuate Objects Post sion
Executing Your Plan Calculate Remunerations Account
Obviously, commissions and other incentives can be calculated
with various levels of granularity. That is, you can calculate them
for individual business transactions (such as the conclusion of a Settlement
sales contract) or at an aggregated level (based on quarterly sales
volume, for example).
Figure 5: Transactional Processes
Participant Determination tives. It should also guarantee minimum payouts and offsetting
The first step in the execution process is to identify all the compared with previous period payouts. The financial data can
commission recipients for a particular commission case. Data for then be transferred either to the relevant settlement system
direct participants is transferred at the incoming interface. The (such as payroll or accounts payable) or to a third-party
ICM solution then locates all indirect participants using infor- settlement system.
mation from the commission contract and the organizational
structure. Indirect participants might include managers who Measuring Compensation Plan Results
receive remuneration when their staff members conduct Once an ICM solution has made the reimbursement calcula-
successful transactions. tions, it is important to collate the data for analysis and review.
A good ICM solution will allow you to access calculation details
Object Valuation from different views (by product or region, for example). It will
In valuing business objects, commission activity is considered also allow you to export the information to any data-warehouse
separately from the recipient. The valuation for a particular solution, where it can be compared with other information,
product might vary over its life cycle. For example, at the begin- such as relevant sales statistics.
ning, valuation might be set high (resulting in a high commis-
sion for the recipient) to push a new product into the market. Analyzing Compensation Plan Data
The valuation could then be lowered when the product has Before making any changes to your compensation plan, it’s
been successfully launched. The rules for valuation are specified important to review and analyze the information you have
in the customizing menu and can be quickly adapted to new gathered. This will help you determine which business partners
remuneration strategies. You can keep track of changes in valu- have been most successful and which compensation strategies
ation because they are saved in historical versions of the have been most effective in promoting the desired behaviors.
commission contracts. You can then use your analysis, along with the requirements for
any new product lines or marketing campaigns, to make what-
Remuneration Calculation ever changes are needed to your compensation plan.
Calculations of remuneration are based on the valuation results
and calculated for each direct commission and indirect com- Integration with Customer Relationship
mission recipient according to individual remuneration rules. Management
The calculations are then posted to the commission accounts. How do you integrate an ICM solution with your sales cycle?
The remuneration can be either monetary or nonmonetary Figure 6 shows one example of the interaction between an
(such as bonus points for sales competitions). organization’s sales cycle and its compensation system.
Settlement and Disbursement
At the end of the compensation period, an ICM solution should
close the commission accounts and calculate both variable and
constant compensations. Constant compensation can be a flat
rate, such as office or telephone costs. Variable compensation
represents calculation results for both commissions and incen-
SALES CYCLE COMPENSATION SYSTEM
The board of directors defines the company’s sales and market- • Commission recipients and their contracts are defined
ing strategy. (for example, the manager, interaction center agent, presales
consultant, sales representative, and customer service
• Commission and incentive rules are defined according to the
A marketing campaign is initiated to promote a particular Rules are defined for the promoted product’s valuation and for
product for a market segment in line with the sales strategy. the variable compensation of commission recipients.
• Prospects are contacted. The opportunity triggers compensation (for example, for the
• The interaction center agent calls to qualify the lead. presales consultant, the interaction center agent, and the
• If the prospect is interested, the lead qualification level is set manager).
• The responsible sales rep is determined. If the sales rep accepts
the lead, an opportunity is created.
Sales activities occur for the opportunity. Various activities trigger compensation (for example,
a customer demonstration or customer visits)
A quotation is presented. The quotation triggers compensation.
The sales order triggers compensation (for example, the sales
• If the prospect makes a positive decision, a sales order or representative receives direct compensation, and the manager
contract is signed. receives indirect compensation).
• Logistics execution takes place.
• The sales bill is processed. • The bill triggers compensation.
• Collection takes place. • Collection triggers compensation.
Assigned employees provide after-sales customer service and Positive feedback triggers compensation (for example, for the
complaint management and ensure the customer is satisfied. sales representative and customer service representative) or
negative feedback (trigger for claw-back).
Figure 6: Integrating Customer Relationship Management Information
In this example, the sale becomes a collaborative effort between From a management perspective, this model is extremely
five commission recipients: the manager (who receives indirect alluring. In addition to facilitating the management of internal
compensation as a result of the sales staff’s efforts), the interaction and external sales staff (and their contracts), it motivates staff to
center agent, the presales consultant, the sales representative, and update the data in the system regularly, ensuring that
the customer service representative. management has the latest sales information at its disposal.
The commission recipients can check the system at any point,
using personalized Internet access to view the level of compensa-
tion they are due. This provides immediate reinforcement for pos-
SAP INCENTIVE AND
The SAP Incentive and Commission Management application Benefits for Your Administrative Staff
is a part of both the mySAP™ ERP and mySAP Customer Rela- Your administrative staff benefits from a high level of automation
tionship Management (mySAP CRM) solutions. It incorporates and from better and easier management of incentive and com-
many of the important functionalities addressed above, deliver- mission recipients, their contracts, and the organizational struc-
ing a complete solution for managing compensation and incen- ture to which they belong. Being able to manage everything from
tives across your organization. The application delivers benefits a central location makes it easy to amend your compensation
at multiple levels of your organization. plan. SAP Incentive and Commission Management provides stan-
dard contracts, which make it easier to amend your compensa-
Benefits for Your Organization tion plan and to create new compensation contracts.
SAP designed the application to be highly flexible. You can easily
amend the calculation rules, ensuring that your compensation Benefits for Your IT Staff
plan remains synchronized with your organization’s current busi- You can use SAP Incentive and Commission Management as
ness goals. The increased visibility and easy access to information a stand-alone tool or as part of your mySAP ERP solution.
about earned and expected compensation can stimulate positive The application works with the employee transaction manage-
culture changes in your organization. By providing timely feed- ment capabilities of mySAP ERP Human Capital Management
back to staff members, you can better reinforce and reward (mySAP ERP HCM), the accounts payable capability of mySAP
successful behaviors and improve motivation for future sales ERP, or any other SAP or third-party settlement system. Your IT
strategies. staff can process high volumes of data accurately and rapidly,
and because SAP Incentive and Commission Management stores
Benefits for Your Management Team data in a central location, data maintenance and reporting are
SAP Incentive and Commission Management helps you manage greatly simplified.
your internal and external sales forces and define their con-
tracts and agreements, as well as the organizational structure to SAP Incentive and Commission Management is scalable, so you
which they belong. It also provides a historical record of com- can transfer data at the transactional or aggregated level, which
pensation changes. You can carry out evaluations of your sales further maximizes performance. The flexible definition of in-
force based on various criteria – by product, region, or depart- bound and outbound interfaces lets your IT staff introduce
ment, for example. The ability to quickly amend calculation additional data without having to modify the calculation code.
rules provides key support for changes in your sales and market- You can also extend data fields without modifications, which
ing campaigns. gives the IT staff maximum flexibility in addressing your specific
needs. In addition, the staff can define the calculation rules for
Benefits for Your Sales Staff valuation, remuneration, and clearing to suit the requirements
SAP Incentive and Commission Management delivers the tools of your organization.
you need to provide accurate compensation that reflects the
success of individual sales staff and to make your incentive crite-
ria more visible and understandable. Because the compensation
data is more accurate, your sales staff spends less time shadow
tracking and more time on crucial sales activities. Your staff also
has easy access to a historical record of their personal compen-
CONCLUSION GLOSSARY OF TERMS
You face many sales challenges, and you must consider key issues business object
when designing, reviewing, and implementing sales incentives The product or service for which incentives or commissions are
and compensation across your organization. SAP Incentive and calculated (such as an insurance policy, a car, or a mobile phone
Commission Management can benefit your staff, managers, subscription)
administrators, IT teams, and organization in many ways.
SAP Incentive and Commission Management is a cross-industry A cross-application entity that is specific to SAP solutions. In
solution that lets you process incentives and commissions quickly the SAP Incentive and Commission Management application, it
and adapt rapidly to changing business conditions and track the refers to the commission recipient.
history of your changes to incentive and commission rules and
rates. With SAP Incentive and Commission Management, you closed management loop model
can handle all the usual forms of sales remunerations, such as A four-step management model that reflects a continuous
commissions, brokerage fees, profit sharing, bonuses, and can- improvement process
cellations. Clear encapsulation and easy interfacing capabilities
ensure that SAP Incentive and Commission Management can be commission
seamlessly integrated into your IT environment and used with The fee or percentage a sales representative receives for services
both SAP and non-SAP solutions. rendered
With SAP Incentive and Commission Management, you have commission account
the right tools to: The area in which commission and incentive calculations are
• Handle different kinds of variable compensations stored prior to disbursement
• Lead your sales force (and, therefore, gain control over
important financial budgets) commission activity
• Motivate your people and increase your organization’s The action that triggers compensation (such as new business or
productivity the renewal of business)
To learn more about how SAP Incentive and Commission Man- commission administrator
agement can help your organization streamline its compensation The staff member who administers the compensation plan
programs, visit swww.sap.com/erp and master data, such as commission contracts and contract
commission case indirect commission
Information provided by the inbound systems that is needed The fee or percentage an individual receives as a result of the
to execute the commission calculation – such as information services others have rendered
about the business partner (for example, the responsible sales
rep), business object (such as a life insurance policy), and indirect reward
activity (such as new business) The reward given to an individual who earns compensation
or incentives as a result of the activities of others
The contract (based on the standard contract) that is held by standard contract
the commission recipient and outlines the terms of the A template contract used for a group of commission
compensation agreement recipients to which individual agreements can be added
The business partner – the person or organization that will
receive the commission or incentive according to the terms of
the commission contract
The fee or percentage sales representatives receive for the servic-
es they render
The reward given to individuals who earn compensation or
incentives as a result of their own activities
Period-based variable compensation (such as a performance