Variable Compensation - Calculating award

Hello -

We are beginning to roll out variable compensation for an incentive plan here.  The plan is annual and defined in four payouts, each one is a calendar quarter.  We are using proration so that members can be eligible for a partial payout depending on which month in the quarter they joined the plan.  The target formula is relatively simple:  Annual Rt from JOB * .025 * .25, for any given quarter.  It is a goal driven plan and if goals are attained in the quarter, then membership and awards appear to work very well.

Thing is, the plan may not have a payout in a given quarter since the goals may not be met.  In that case, payout is zero.  However, if the annual goals are made up in a later quarter, then the plan allows for the prior unpaid quarter to be paid out.  When that happens, we want to pay the award based on the members' most current annual rate.  So, a simple example is that we missed quarter 1 goals and no pay out was made.  However, at the end of quarter 2 the company makes up its annual goals.  That