Administrator Topic

Proration with Individual Targets

Bonus components can be prorated based on Last Hire Date, Time in an OU, and Individual Targets.

If the proration criteria for a component is set to Last Hire Date or Time in OU, and the corresponding adjustment guidelines are set to Individual Targets:

  • The guidelines retrieve the user's most recent target value set for the guideline's compensation component that is within the user's proration criteria period.
    • If no individual target entry is available for the user for the compensation component type during the proration criteria period, the user's target value is zero for the proration segment.
  • The target values retrieved by the adjustment guidelines according to the proration criteria are prorated as normal.

If the proration criteria for a component is set to Individual Targets:

  • Only adjustment guidelines with the Target set to Individual Targets are applicable and are used for the component.
    • For example, if Bonus proration criteria is set to Individual Targets only, Bonus adjustment guidelines are filtered so that only guidelines with the Target to Individual Targets are used in the task.
  • The adjustment guideline with the highest payout recommendation is implemented.
  • Proration of the target value is calculated on Individual Target values set for the user for the duration of the compensation period.
    • For dates in the compensation period that the user does not have a target set, the user's target for that period is zero when calculating the prorated target value.
    • If no target values are set for the user during the entire compensation period, their target is zero.
  • Unlike proration by OU or Last Hire Date, proration by Individual Targets is represented in the compensation task by a single line item.
    • Although the target is a prorated value, proration by Individual Targets does not split the user's entry for this component based on Individual Target entries.
    • The manager that is solely responsible for setting the bonus amount for the user is the most recent manager of the user during the compensation period.

Example

The following diagram depicts a compensation period from 01/01/2011 to 12/31/2011:

Proration by Division:

  • Adjustment Guidelines: Development, Management
  • Time in Development Division:
    • Target for 01/01/2011 - 06/30/2011: $5,000
  • Time in Management Division:
    • Target for 07/01/2011 - 12/31/2011: $6,000

Proration by Individual Targets:

  • Adjustment Guidelines: Management (Assume it recommends higher payout than Development adjustment guideline)
  • Target for 01/01/2011 - 03/31/2011: $2,000
    • Prorated Target Value: $493.15
  • Target for 04/01/2011 - 05/31/2011: $4,000
    • Prorated Target Value: $668.49
  • Target for 06/01/2011 - 08/31/2011: $5,000
    • Prorated Target Value: $1,260.27
  • Target for 09/01/2011 - 09/31/2011: $5,500
    • Prorated Target Value: $452.05
  • Target for 10/01/2011 - 12/31/2011: $6,000
    • Prorated Target Value: $1,512.33
  • Total Prorated Target for Compensation Period: $4,386.29

Proration by Last Hire Date (Last Hire Date = 06/01/2010):

  • Adjustment Guidelines: Management
  • Target for 06/01/2011 - 12/31/2011 (214 days): $6,000
    • Prorated Target Value: $3,517.81

 

Last Published: 10/11/2021 If you have feedback or suggestions for an Online Help article, please select this link. © 2021, Cornerstone OnDemand