Sixty Percent Rule (60% Rule)

This rule states that a store can increase payroll dollars by 60 percent of a relative increase in sales. This rule enables a budget manager who predicts a large increase in sales to increase payroll by a lesser amount.

Increases the value in the Adjusted Forecast Sales column during the forecast solicitation process and performing an action that recalculates the Worksheet:

  • Recalculates the numbers in the Forecast Payroll % and Adjusted Forecast Payroll columns.
  • Calculates the numbers in the 60% Rule Payroll % and 60% Rule Payroll columns using the 60% rule.

If you want to use the 60% rule in your forecast, you can edit the values in the Forecast Payroll % and Adjusted Forecast Payroll columns to match those in the 60% Rule Payroll % and 60% Rule Payroll columns.

For example, suppose that:

  • The regular payroll percentage for the district is 10 percent.
  • Store 1 increases its sales forecast.
  • Store 2 decreases its sales forecast.

The 60 percent rule is calculated only for Store 1, because its forecasted sales increased. The values do not change for the district or the other two stores.

Location Budget Sales ($) Adjusted Forecast Sales ($) Budget Payroll ($) Adjusted Forecast Payroll ($) Budget Payroll % 60% Rule 60% Rule
Payroll ($) Payroll %
District 600 600 60 60 10 BLANK BLANK
Store 1 100 200 10 20 10 16 8
Store 2 200 100 20 10 10 BLANK BLANK
Store 3 300 300 30 30 10 BLANK BLANK
  • The value in the 60% Rule Payroll column for Store 1 is calculated as follows:
    • Budget Payroll + [ ( Adjusted Forecast Sales - Budget Sales ) * 0.6 * Budget Payroll % ]
    • = 10 + [ ( 200 - 100 ) * 0.6 * 10% ]
    • = 10 + [ 100 * 0.6 * 0.1 ]
    • = 10 + 6
    • = 16
  • The value in the 60% Rule Payroll % column for Store 1 is calculated as follows:
    • ( 60% Rule Payroll / Adjusted Forecast Sales ) * 100
    • = (16/200) * 100
    • = 0.08 * 100
    • = 8

The Payroll Adjust Rule configuration in the default forecast rule group determines how the 60% rule is calculated. See Configuration after importing the Budget.

Values in the 60% Rule columns are calculated only in the following scenarios:

  • If there is no budget or if the Payroll Adjust Rule does not point to the budget, the number in the Adjusted Forecast Sales column is greater than the number in the System Forecast Sales column.
  • If the Payroll Adjust Rule points to a budget (for example, after configuring DFT FORECAST WORKSHEET EXEC GRP 2), the number in the Adjusted Forecast Sales column is greater than the number in the Budget Sales column.

Edits to the Forecast Payroll % column do not affect the 60% rule.