## What OTE planning solves

In standard planning, planners give separate raises for base salary and variable pay. For roles where compensation is expressed as on-target earnings (base + variable), this creates friction: planners think in terms of total OTE, not individual components, and splitting a raise manually is error-prone and tedious.

OTE planning replaces the separate salary raise and variable raise inputs with a single **OTE Raise** input. The planner enters one number, and Pave automatically splits it into the correct base and variable components based on the employee's pay mix. This gives OTE planners a streamlined experience while keeping the underlying salary and variable data accurate for downstream systems.



## How it works at a glance

* You mark specific employees as OTE-eligible using the **OTE?** column.
* For those employees, the worksheet shows OTE-specific columns and hides standard raise columns.
* The planner enters a single **OTE Raise**, and Pave computes the resulting salary raise and variable raise based on the employee's **Target Pay Mix**.
* Non-OTE employees in the same worksheet continue to use standard salary and variable raise columns. Both can coexist in the same planner's worksheet.



## OTE columns

### Core columns (always included)

| Column | Type | What it does |
|----|----|----|
| **OTE?** | Checkbox | Toggles OTE mode for the employee. When checked, OTE columns become editable and standard raise columns are hidden for that employee. |
| **Current OTE** | View-only | The employee's current on-target earnings: current base salary + current variable pay. Does not include annual bonus. |
| **OTE Raise** | Input | The total OTE increase. Planners enter a single amount here. It splits into salary and variable components based on the target pay mix. Can display a recommendation if configured. |
| **Target Pay Mix** | Input | The ratio of base to variable (e.g., 70:30). Controls how the OTE Raise splits. Can be set by recommendation logic, uploaded, or manually entered. The two values must add to 100. |
| **OTE Salary Raise** | Computed | The portion of the raise allocated to base salary, calculated from the OTE Raise and pay mix. Admins can override if needed. |
| **OTE Variable Raise** | Computed | The portion of the raise allocated to variable pay, calculated from the OTE Raise and pay mix. Admins can override if needed. |
| **New OTE** | Computed | The employee's new on-target earnings after all raises are applied. |


### Optional columns

When adding OTE columns to your cycle, you're asked whether to include these:

| Column | When to include it |
|----|----|
| **OTE Market Adjustment** | When you need a separate market adjustment input for OTE employees, tracked independently from the merit raise. Works the same as the standard Market Adjustment but within the OTE framework. |
| **OTE Promotion Cash Raise** | When you want promoted OTE employees to receive a separate promotion-specific raise, tracked independently. Only editable when the employee is marked as promoted. |


## How the pay mix split works

The Target Pay Mix determines what percentage of total OTE goes to base salary and what percentage goes to variable pay. The pay mix can come from multiple sources: the employee's current base/variable split, the target variable pay percent defined in their compensation band, or a value you upload manually. You configure which source to use in the pay mix recommendation settings (see "Configure the target pay mix" below).

When a planner enters an OTE Raise, the system calculates the new OTE (current OTE + raise) and then derives each component:

**OTE Salary Raise** = (base % of pay mix x new OTE) - current base salary

**OTE Variable Raise** = (variable % of pay mix x new OTE) - current variable pay

**Example:** An employee has a current base of $70,000 and current variable of $30,000 (current OTE = $100,000). Their target pay mix is 70:30. The planner enters an OTE Raise of $10,000.

* New OTE = $110,000
* OTE Salary Raise = (70% x $110,000) - $70,000 = **$7,000**
* OTE Variable Raise = (30% x $110,000) - $30,000 = **$3,000**
* New Base = $77,000, New Variable = $33,000

The raise splits in proportion to the target pay mix. If an employee's current mix doesn't match their target (for example, they're currently at 75:25 but the target is 70:30), the split also nudges the employee's compensation toward the target mix.

If the OTE Market Adjustment or OTE Promotion Cash Raise columns are included, those amounts are also added to the new OTE before the split is calculated.


## What planners see in the worksheet

OTE planning customizes the worksheet per employee, not per planner. This means:

* **OTE employees** see: OTE?, Current OTE, OTE Raise, Target Pay Mix, OTE Salary Raise, OTE Variable Raise, New OTE (plus OTE Market Adjustment and OTE Promotion Cash Raise if configured). Standard salary raise, variable raise, market adjustment, and promotion cash raise columns are hidden.
* **Non-OTE employees** see standard raise columns. OTE columns are hidden.
* **Planners with both** see the appropriate columns per employee row. A senior planner managing a mix of OTE and non-OTE employees gets the right inputs for each.



## Setting up OTE planning

### 1. Create an OTE planner role

Go to **Roles & Permissions** and create a role for OTE planners (e.g., "OTE Planners"). Define eligibility by department, level, or reporting chain depending on your organization. This role controls which planners can see OTE columns.


### 2. Add OTE columns to the cycle

Go to **Configurations** > **Columns** > **Add New Column** and select **On-Target Earnings (OTE)**. This adds the full suite of OTE columns in a single step. During setup, you'll be asked:

* Whether to include **OTE Market Adjustment** (select Yes if you process market adjustments separately for OTE employees)
* Whether to include **OTE Promotion Cash Raise** (select Yes if promotions get a separate raise input)

You can customize the name and description of each OTE column in the configuration form.


### 3. Set column permissions

After saving, assign column permissions so that OTE columns are visible to the OTE planner role and hidden from non-OTE planners. You can adjust these in the Columns table at any time.


### 4. Configure the target pay mix

Go to **Configurations** > **Recommendations** and select the pay mix column. Choose one of three options:

| Option | What it does | When to use it |
|----|----|----|
| **Maintain current pay mixes** | Uses each employee's existing base/variable split. | When you don't want to change anyone's pay mix this cycle. |
| **Use target variable pay percent from bands** | Pulls the target pay mix from the employee's compensation band. | When your bands define target pay mixes and you want all employees to move toward them. |
| **Maintain current for non-promoted; use band target for promoted** | Keeps existing pay mixes unless the employee is being promoted, in which case it uses the promotion band's target. | Recommended for most organizations. Dynamically applies the right pay mix based on whether the employee is moving roles. |

You can also upload static pay mix values via **Data Upload** if you need full manual control.

**Important:** Target variable pay percent in your bands should be formatted as a percentage of base salary, not of OTE. Pave handles the conversion to the base:variable display format in the worksheet.


### 5. Mark employees as OTE-eligible

Set the **OTE?** column to true for each OTE-eligible employee. You can do this by:

* Uploading values via Data Upload
* Using a formula or logic rule
* Leaving the column editable so planners can toggle it in the worksheet

Any planner who has at least one OTE-eligible employee in their worksheet will see OTE columns.



## How OTE interacts with other features

* **Budgets**: OTE raises can be tracked by cash budgets the same way standard raises are.
* **Recommendations**: The OTE Raise column supports recommendations. Configure recommendation logic in the Recommendations tab.
* **New pay columns**: OTE Salary Raise flows into New Salary, and OTE Variable Raise flows into New Variable, just like their standard counterparts. New Total Annual Cash and New Total Annual Compensation update accordingly.
* **Promotions**: If an employee is both OTE-eligible and promoted, the OTE Promotion Cash Raise column (if configured) becomes editable. The pay mix recommendation can automatically switch to the promotion band's target.
* **Reward letters**: OTE Salary Raise and OTE Variable Raise values are available for reward letter templates.


## Things to know

* **OTE excludes annual bonus.** Current OTE = base + variable. It does not include annual bonus, which is why it differs from Current Total Annual Cash.
* **Pay mix must add to 100.** If a planner manually adjusts the Target Pay Mix, the base and variable percentages must sum to 100.
* **Admins can override computed raises.** The OTE Salary Raise and OTE Variable Raise columns are computed from the pay mix, but admins can override them if needed.
* **OTE is per employee, not per planner.** The same planner can have both OTE and non-OTE employees. The worksheet adapts per row.




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