Do you constantly worry about managing incentive process exceptions? (Part 2)


In the first part of this series we talked about a few Pharma IC Exceptions that could come your way and why they are important to handle the dynamic business environment in the pharmaceutical industry today. In this second part we’ll continue to share a few more such pharma IC Exception cases and how they can help with flexibility in your IC plan.

Qualifiers and Multipliers

Qualifiers and multipliers are a very useful plan design component to configure the plan to meet any specific strategic need.

Qualifiers are generally constraints / conditions in the plan design which determines the IC eligibility of the plan participant for a payout on any particular plan component. The idea is to add the set of threshold conditions to the plan design which enables the designer to zero out the incentive payment for that component irrespective of the performance of the participant on the plan measure.

Multiplier is a design feature that allows the plan designer to accelerate or decelerate a plan participant’s incentive based on one or more performance measures.

There are different types of performance measures relating to behaviour, activity adherence, higher hierarchical performance etc. used for this purpose. These performance measures can be used as either qualifiers or multipliers depending on the specific business situation.

Portfolio definition

Portfolio level measures have become quite important over time in the pharmaceutical industry. A good IC system must be flexible to define and fine tune the portfolio measure definition and be able to use that to drive performance management. It must be capable of using different strategies while calculating portfolio measures.

Different types of portfolio level calculations at times are required to support different business needs. For e.g., when a sales force is promoting multiple products (of equivalent value) of the same therapeutic area then it is better to aggregate sales performance across these products within the same channel to encourage portfolio focus.

At other times, companies want to weight performance of different brands within the portfolio strategically to encourage individual brand focus without necessarily taking the focus away from the portfolio.

HR Exceptions

HR exceptions are probably the largest category of exceptions in any IC process. An effective IC system must be capable of handling the various types of HR exceptions that tend to arise. Some of these scenarios are described below:

  • New hire – provide flexibility to assign target / target-or-better payout for first few months after joining
  • PIP – either assign target-or-worse payout or do-not-pay handling to employees who are on an performance improvement plan
  • Resignation – either force-pay at the end of the resignation month in the middle of the payout period or do-not-pay depending on HR eligibility rules
  • Termination – either force-pay at the end of the termination month in middle of payout period or do-not-pay depending on HR eligibility rules
  • Channel and Datatype handling
  • Certain pharmaceutical business scenarios require special handling of data to include certain sales channels or certain types of data. A good IC system should be able to accept different types of data and allow measure definition to quickly select the exact channel or data type that is required to be included in that measure.

For example, for new launch products, at times it’s desirable to have plans for performance on both new as well as total prescriptions/dollars. It may be required to define one measure on only new prescriptions and one measure on only total prescriptions.

Adjustments

Adjustments are key to any good IC system. There is always going to be a need to make adjustments to:

  • Sales – provide flexibility to adjust credited sales if required because of external data issues
  • Goals – adjust goals data to account for any data issues with the input used during quota setting process
  • Rep-Territory Payout – adjust payout at the employee-geography level
  • Rep Payout – adjust payout at the employee level for use in the final payroll

ICM Software that handles these exceptions natively will help you manage your IC operations better, react to various business scenarios and reduce complexity and total cost of operations of your IC system.

Aurochs software handles all of these exceptions right out of the box. Get in touch with us at info@aurochssoftware.com to let us show you how.

Post Author
Amit Jain
Co-founder & Director of Customer Success

Amit has more than 15 years of experience engaging with several healthcare companies in consulting projects. His expertise lies primarily in the areas of incentive compensation, salesforce effectiveness, business intelligence and analytics. Prior to co-founding Aurochs Software, he worked with several leaders in the incentive compensation space such as ZS Associates, Optymyze (former Synygy) for almost 10 years in several leadership positions leading several product and service initiatives. He was part of IC leadership team at ZS Associates and led the formation of offshore center of excellence for incentive compensation design and delivered several key client projects.