My finance view

Salespeople in our company are paid 100 percent on commission, with no vacation, holidays or sick leave. Now, the owner has announced that he is slashing our commission rate.

He also is planning to pay us almost nothing for serving established customers, because he wants to focus on getting new business. So there is no incentive to spend time on existing accounts.

The owner says this is necessary because the company is losing money. However, he hasn’t cut the pay of any other employees, including himself. And he hasn’t tried to reduce expenses.

Our morale is in the gutter, and we have lost all respect for this guy. He obviously can do whatever he wants, but why would he do this?
Business owners often fail to grasp the complexities of compensation. They make ill-considered pay decisions, then are blindsided by unintended consequences.

In this case, your shortsighted boss has crafted a plan that simultaneously alienates the sales force and reduces service to loyal customers get a free credit report. Not exactly a recipe for success.

He either doesn’t realize or doesn’t care that experienced salespeople may decide to leave. And he has succumbed to the common emotional pitfall of valuing new customers more highly than existing ones.

Changing his mind may be impossible. But if you want to give it a shot, prepare a factual business case describing how this plan could hurt the company. Propose an alternative that addresses his goals and your concerns. Then select someone he trusts to present this information.

You might also suggest consulting with an expert in sales compensation. A professional may help your owner see the light before his customers and employees start to defect to your competition.

I recently hired an administrative assistant who makes a lot of mistakes. Two months ago, I told her this was unacceptable and that she must be more vigi