Commission question

Bingers

A question for anyone who has experience of commission related pay...I am, for my sins, an estate agent. I had my annual review today and was told that my office's target for the coming financial year was going up, and therefore my commission rate on each sale would decrease. I've been with the firm for 7 years and it is successful and profitable. Over the years my commission rate has steadily increased so following what has been our most successful year ever, this came as something of a surprise.

The managing partner justified it by saying that, because the target was increasing, if we hit the target I would ultimately earn the same overall amount.

My question: is this normal?! Can it be justified?

I presumed that once you hit a certain level of commission it would not decrease except under difficult circumstances - recession, market difficulties etc.

Any thoughts would be gratefully received.

Many thanks.

CalumHeath

I'm not an estate agent - or anything like it - but I am an owner-operator of a business so I'll have a go.

Forget whether anything is normal, what you thought it would be, what you were told (verbally) it would be or even if you or anybody else thinks it's fair or not; quite simply, unless the rate of commission is stated in your employment contract, it can be anything your employer would like it to be: 0%, 50%, 95% - it's at their discretion.

You contract is the go-to document for the answer - is there anything in your contract?

Bingers

CalumHeath wrote: »

I'm not an estate agent - or anything like it - but I am an owner-operator of a business so I'll have a go.

Forget whether anything is normal, what you thought it would be, what you were told (verbally) it would be or even if you or anybody else thinks it's fair or not; quite simply, unless the rate of commission is stated in your employment contract, it can be anything your employer would like it to be: 0%, 50%, 95% - it's at their discretion.

You contract is the go-to document for the answer - is there anything in your contract?

Absolutely understood - and thank you for your response. You are 100% correct, the commission can vary at the employer's discretion but...

They informed me during the review that the firm is doing well, as an office we surpassed our target by nearly 25%, they are completely happy with my performance and are steadily increasing my level of responsibility within the firm. My question is more related to the principle of reducing a commission rate because the annual target for the office is being increased.

I simply can't believe that that is common practise - but may be I am wrong...?!