Communication story

Communication story: When in doubt, don't take "Executive Decision", better "Escalate to the client"

Typically, the incentive compensation (IC) plan for Regional Business Directors (RBDs) is calculated based on the average performance of their underlying territories, multiplied by a scale-up factor (1.5 to 2). Any territory with a rep occupancy of more than two-thirds of the quarter is included in this calculation. While this seems straightforward in the IC plan document, real-world scenarios often present edge cases.

For instance, consider a situation where the first rep left halfway through the quarter, and a new rep joined immediately and was present for the remainder of the quarter. Should this territory be included in the calculations? According to the business rule, it has an occupancy of greater than two-thirds of the time, so it could be included. However, making this decision yourself would be an executive decision.

Instead, you should escalate this scenario to the client, explaining the situation and providing your recommendation. Ultimately, the final decision should come from the client. There is a high likelihood that client leadership will exclude this territory from the RBD calculation because the new representative, being very new this quarter, may not perform at the same level. Including this territory would unfairly penalize the RBD.

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