Definition

• The Average function calculates the arithmetic mean of all values within a dataset, providing a central tendency reference point that represents the typical performance level across the group.

Purpose

• Establishes a team performance benchmark that can be used to normalize individual performance relative to the group's average, enabling fair compensation structures based on above or below average achievement.

How it works

• Takes all values for a specific KPI or component within the defined scope (typically team level)
• Calculates the arithmetic mean by summing all values and dividing by the number of participants
• Returns this average value to each individual in the group

Input

• Raw performance values (e.g., Sales vs Target percentages, absolute sales figures, custom KPI values)

Output

• The average value from the dataset (same value returned for all participants)

Scope

• Applied at the team level - average is calculated among all positions within the same team for the specific bonus scheme

Use Cases

• Creating performance benchmarks where bonuses are calculated relative to team average performance
• Normalizing individual achievements against the group's typical performance level
• Establishing fair comparison metrics when absolute performance varies significantly across teams
• Implementing bonus structures that reward above-average performance while accounting for team dynamics

Example Application