IF Statement in Bonus Calculation

[piper]

Am looking at offer from perspective employer and don't understand an IF statement. Cells refer to Goal and Actual Gross Profit values. First part of IF statement is straightforward, IF cell D29 is greater than D21, than 1. Easy enough, if Actual GP is higher than goal, return 100% to the cell and I get 100% of available commission. The second part is puzzling. Here is entire formula.

=IF(D29>D21,1,(1-((1-D35)*2)))

D35 points to a calculated % value of GP Plan (example: GP Actual is 90% of goal). Why multiply by two?

Thanks.

 

[shg]

Welcome to the board.

It means your percentage of full commission is 100% minus twice the percentage you missed the goal by. It could be rewritten as

=MIN(100%, 2 * Actual/Goal - 100%)

 

[piper]

Do you know why someone may double the missed rate? Just odd to me, other than just being mean spirited, is there a finance rational to saying "You didn't miss GP by 5%, you missed it by 10%!?

 

[shg]

That would be a question for your prospective employer.