Key performance indicators (KPI) have been increasingly used by many companies and organizations to keep track of the various aspects of organizational performance. One particular application involves bonus KPI, which are the key performance indicators that determine whether or not an individual employee is eligible for a bonus.
Firstly though, what exactly are these so-called key performance indicators? From the term itself alone, these KPI are select measurements that serve to indicate performance levels. To be more precise, key performance indicators are financial and non-financial metrics that are used to both define and measure progress towards organizational goals. By their very nature, these key performance indicators may vary widely across various organizations and disciplines, but there are also several that are applicable for a broad range of organizations.
Key performance indicators form one part of a well-defined measurable objective, which consists of a direction, an indicator, a benchmark, a target, and a time frame. As such, they are vital parts of any strategic management approach, since a concrete idea of what indicators need to be kept track of becomes necessary.
These KPI are not pulled out of thin air by managers. For these indicators to be of any use, they must be based on a pre-defined business process. That bonus turnover terbesar is, the organization must be clear about how it operates both internally and externally. Not only that, but the organization must also have set goals and objectives, or at least have some idea of what these aims are. And finally, the organization must be aware and capable of doing the measurements that a key performance indicator would require. These three criteria govern the selection and the efficient implementation of key performance indicators in general, for any organization.
To give a concrete example, consider the selection of a KPI upon which a technical support agent's bonus is to be based. First, the business process or the set of interrelated tasks that such an agent performs must be determined. This might consist of answering customer queries through various media, doing research work, and creating documentation. Once this has been clarified, the goals and objectives of the organization must be set, for instance efficiency and lower handling or processing times. Lastly, the organization must set in place the different measurement processes that a KPI would require, like timers or loggers.
In light of these considerations, good key performance indicators for a technical agent's bonus might be successfully answered query percentage, average handling time, or customer satisfaction rate. In this example the flexibility of the KPI approach can be seen. These indicators can be used to measure individual employees' performance just as effectively, as they are used to measure organizational performance as a whole.
Bonus KPI such as these form just one sample application of the key performance indicator paradigm. Different organizations with different strategic objectives and business processes may employ different types of key performance indicators. The proper selection and monitoring of these KPI will definitely help managers continuously align organizational processes with organizational objectives.
As we mentioned in previous articles, UL plans are unbundled, the various components of the plan such as insurance charges and earned interest can each be isolated and quantified. Consequently, they are much easier to understand and explain than traditional bundle permanent life insurance products. In this article, we will discuss the minimum and maximum premiums of the universal life policy.
Most companies place contractual restrictions on the minimum and maximum deposits they are prepared to accept in the early years of a UL plan. Generally the lower the minimum premium and the higher the maximum premium, the more flexible the UL plan is with respect to funding options.
1. Minimum premium
Many insurance companies allow only minimum premium paid as long as the premium is enough to cover the cost of insurance. Some companies apply the minimum premium restriction only for the first year of the policy. Others require that no less than the minimum premium must be paid in the first year and at least two times the minimum premium must be paid after two years. Yet others require that at least five times the minimum premium must be paid into the plan after five years. Of course, if the first year deposit is greater than five times the minimum premium, no future deposits would be contractually required.
Under universal life option, policy holder can make a large initial premium and do not need to any additional premium again as long as the investment funds in the policy are enough to cover the insurance cost. In Fact, a higher minimum deposit requirement forces the policyholder to put more money into the plan in the early years to build up a fund value within the plan. This is the obligation of insurance company to inform you when the additional premium is required, usually caused by depletion of investment fund in the policy.
2. Maximum premium
Maximum premiums are usually only a factor in the first policy year. In subsequent years, usually the only restriction is that the fund value or cash value of the plan be kept below the exempt line. Therefore, beyond the first year, maximum policy deposits vary with many factors such as credited rates, past deposits, etc. as long as they do not force the policy to become non-exempt.
In fact most companies link a taxable side fund to their UL contracts. They are, therefore, usually able to accept much larger deposits since any funds that are over the maximum are placed into this side fund where growth is taxed annually. When the accumulating fund drops below the exempt line, many of these plans automatically transfer dollars from the side fund to the policy fund, thereby maximizing the tax sheltering aspect of the plan in the process.
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