Pay change - Not discussed, advice?

911bill

Hi All,
I am looking for some advice.
I have worked for this company for 15 years, a small business but I enjoy it and pays the bills. I work on commission and last year, I was furloughed, this was hard as a large portion of my wage is commission, as it was not contracted, I could only be paid my basic.. 
Had a chat with MD and he mentioned that he was looking to put me on a new pay scheme with higher basic, that was it, no detail or any more info. He went on to ask me for ideas on how I think I should get paid, kind of awkward as I was pretty happy with how I got paid although the basic pay during furlough hurt but he did pay me the majority of my backlogged commission when I came off furlough in October. 
That was that. 
My January pay slip arrived this week and my pay was totally different and not aligned with my sales figures. My basic was higher but the commission was approx, 50% below where it should be.
So I emailed him asking, how is the commission being worked out now, he replied saying 

"Was planning to fully put new scheme in place, from 1st January 2021, however I felt it would be unrealistic/unachievable in the current climate, as the bias is very much towards bringing in new business.   I therefore decided that for a 3 month period, we would increase your base salary, and set a flat rate commission.   It is worked out, very roughly, on the previous 3 years earnings.  Current plan would be to review the above for 1st April and, hopefully put the new scheme in place then.

Hope this sort of explains the situation"

My reply was;

Just to make sure I am clear, as well as mortgage broker who has asked.

Will I be getting paid £4250 again for the next 2 months up to April? Making my annual earnings approx. £51,000? Where for the last 3 years it has been circa £69000.

2 days later, he bothered to reply after I made comments to my line manager,
"Sorry for the delay in replying, was tied up most of today.

Thanks for the query.  As I have said to everybody, many times during this pandemic, I am trying to ensure that we have a viable Company when everything settles down and everybody has a job to come back to.

As you are aware, the original plan was to put the new bonus calculations in place last year, to replace the calculations you were on since 2011, which were originally planned to last one year.  When you and I had a discussion later last year, you said that you needed to take home £3k per month.   When I calculated the interim package, temporarily increasing your salary and the flat rate bonus, I achieved that.   Clearly we have lost customers, and some are taking a lot longer to pay, therefore I have to manage the Company cash flow.   I felt that, to be fair to you, I would not implement the new calculations because, as mentioned, I am not convinced that much new business would be achievable by you in the current climate. 

In my earlier email there was an typing error.  I typed 3 years, the calculations were based on 8.  My apologies.   This calculation gives you an annual average of £56-£57k

Under the new scheme, your ability to earn more, and it is uncapped, exists, but I need to make sure everyone is catered for.  When we return to the office, I will sit down with you and go through the new system.

Regards"

I have not replied and this has really really upset me, this has come at the worst time as my wife has been made redundant, we have a baby and I am in the final stages of moving house, awaiting approval.

I just don't know what to do or think, I do not feel valued, I feel totally demotivated and now I will have to work harder to get to where I was. My commission was never contracted, so he can change that as he pleases but I feel like he has just looked out for himself here. I actually see the income of the business and we probably lost 5% over the pandemic, if that! He has typically introduced this "interim" pay scheme in January, which is the biggest commission month of the year, hence my huge disappointment. I do a lot for this company, work longer than I should and do tasks that I shouldn't which are outside of sales, it's a small business so it's natural but now I feel to drop everything outside of sales. 

Any advice is appreciated.

Thrugelmir

911bill said:

I do not feel valued, 

Welcome to the real world. Running a business in the current environment is no mean feat. The MD is simply trying to keep the operation afloat. Obviously has no wish to lose you. Though there's nothing to stop you walking out the door. Company finances are far more fragile , even in the good times, than majority of employees realise. There'll be a lot that you aren't being told. At the moment it's a question of survival.   

Marcon

911bill said:

Hi All,
I am looking for some advice.
I have worked for this company for 15 years, a small business but I enjoy it and pays the bills. I work on commission and last year, I was furloughed, this was hard as a large portion of my wage is commission, as it was not contracted, I could only be paid my basic.. 
Had a chat with MD and he mentioned that he was looking to put me on a new pay scheme with higher basic, that was it, no detail or any more info. He went on to ask me for ideas on how I think I should get paid, kind of awkward as I was pretty happy with how I got paid although the basic pay during furlough hurt but he did pay me the majority of my backlogged commission when I came off furlough in October. 
That was that. 
My January pay slip arrived this week and my pay was totally different and not aligned with my sales figures. My basic was higher but the commission was approx, 50% below where it should be.
So I emailed him asking, how is the commission being worked out now, he replied saying 

"Was planning to fully put new scheme in place, from 1st January 2021, however I felt it would be unrealistic/unachievable in the current climate, as the bias is very much towards bringing in new business.   I therefore decided that for a 3 month period, we would increase your base salary, and set a flat rate commission.   It is worked out, very roughly, on the previous 3 years earnings.  Current plan would be to review the above for 1st April and, hopefully put the new scheme in place then.

Hope this sort of explains the situation"

My reply was;

Just to make sure I am clear, as well as mortgage broker who has asked.

Will I be getting paid £4250 again for the next 2 months up to April? Making my annual earnings approx. £51,000? Where for the last 3 years it has been circa £69000.

2 days later, he bothered to reply after I made comments to my line manager,
"Sorry for the delay in replying, was tied up most of today.

Thanks for the query.  As I have said to everybody, many times during this pandemic, I am trying to ensure that we have a viable Company when everything settles down and everybody has a job to come back to.

As you are aware, the original plan was to put the new bonus calculations in place last year, to replace the calculations you were on since 2011, which were originally planned to last one year.  When you and I had a discussion later last year, you said that you needed to take home £3k per month.   When I calculated the interim package, temporarily increasing your salary and the flat rate bonus, I achieved that.   Clearly we have lost customers, and some are taking a lot longer to pay, therefore I have to manage the Company cash flow.   I felt that, to be fair to you, I would not implement the new calculations because, as mentioned, I am not convinced that much new business would be achievable by you in the current climate. 

In my earlier email there was an typing error.  I typed 3 years, the calculations were based on 8.  My apologies.   This calculation gives you an annual average of £56-£57k

Under the new scheme, your ability to earn more, and it is uncapped, exists, but I need to make sure everyone is catered for.  When we return to the office, I will sit down with you and go through the new system.

Regards"

I have not replied and this has really really upset me, this has come at the worst time as my wife has been made redundant, we have a baby and I am in the final stages of moving house, awaiting approval.

I just don't know what to do or think, I do not feel valued, I feel totally demotivated and now I will have to work harder to get to where I was. My commission was never contracted, so he can change that as he pleases but I feel like he has just looked out for himself here. I actually see the income of the business and we probably lost 5% over the pandemic, if that! He has typically introduced this "interim" pay scheme in January, which is the biggest commission month of the year, hence my huge disappointment. I do a lot for this company, work longer than I should and do tasks that I shouldn't which are outside of sales, it's a small business so it's natural but now I feel to drop everything outside of sales. 

Any advice is appreciated.

Of course it's upset you, not least the timing and the fact it has been done through that bluntest of instruments: electronic communication.

You may see the income of the business, but that's only part of the story. The old phrase 'turnover is vanity, profit is sanity' comes into play - and unless you're the FD (clearly you aren't, given the high commission element in your pay package) there will be a whole host of stuff you aren't party to. Your MD sounds as if he is like so many MDs: under massive pressure and not always handling 'people' things perfectly because he's struggling to keep the show on the road.

Read through what he's sent again and try to pick out the good points. If you can possibly overcome the negative and cynical feelings (so much easier said than done) you have now, could it be that the MD might be doing his best for you as well as the company in general?

TBagpuss

If I've understood correctly, your boss has increased your basic pay but changed the calculation for (discretionary) bonuses and commission. If that's correct, then it's unlikely that you would have any basis for complaint (I mean technically you could tell him you don't agree with the change to your base pay, but that would mean going back to a lower basic rate and wouldn't entitle you to a different level of commission. 
5% less work coming in may mean a much bigger reduction in profit, bearing in mind that overheads are likely to be the same or higher, (for instance, if the profit margin is normally 15%, a 5% fall in turnover means profit goes down by 1/3 . And that's assuming there is no increase in overheads.
Of course, if your contract sets out specifically that you are entitled to commission at a specific rate then you can raise that and make clear that you have not agreed to the change and are continuing to work under protest (check Acas for appropriate terminology) but as others have said, this is an exceptionally tough time for businesses and we are in a situation with rising unemployment, high levels of redundancies and heading into a double dip recession - maybe not the ideal time to be getting into a conflict with your employer, particularly if there's nothing contractual to stop him making these changes.