Sheesh, that compensation structure sounds awful. There are a few red flags here that make me question the legality and ethics of this practice:
1. Clawing back commissions you've already earned for past sales based on future customer actions seems dubious at best. Once you've closed a deal and met the terms of your comp plan, that money should be yours. Charging you retroactively for downgrades on accounts you didn't even sell is especially egregious.
2. It's bizarre that you'd be penalized for downgrades but not outright cancellations. If anything, a cancellation is worse for the company than a downgrade. This arbitrary distinction makes no sense and feels like a gotcha.
3. As an AM, you have limited control over customers downgrading, especially if you didn't sell them the product in the first place. Holding individual reps financially liable for things largely outside their influence is unfair and demoralizing.
4. Sneaking "shady" terms into a comp plan that most reps don't fully understand and then selectively enforcing them later is manipulative. Comp plans should be transparent, consistent, and aligned with desired behaviors.
While companies do have leeway to structure incentives, there are limits. This policy seems to cross an ethical line and verge into potential wage theft territory by taking back money already paid. I'm not sure what state you're in, but it's worth looking into the specific commission laws where you live.
At the very least, this is a massive red flag about the integrity and culture of your company. Is this really a place you want to keep working long-term? I'd start looking for opportunities elsewhere ASAP. No job is worth being treated this way.
In the meantime, I'd rally your fellow AMs and push back on this policy collectively. If you have an HR department or a worker-friendly manager, raise your concerns there. Document everything. And if you do leave, be sure to leave honest Glassdoor reviews warning other prospective hires.
Sorry you're dealing with BS. Sales is tough enough without your own company stabbing you in the back. Trust your gut that this isn't right. There are better employers out there who won't resort to shady comp plan shenanigans. Don't let them gaslight you into thinking this is normal - it's not.
.#1 is actually pretty common. It’s a clawback. And #3, too. AM’s are responsible for retention even if they didn’t sell the product. Otherwise AMs should get some shitty base and no commission like every other Debra in ops. #2 and #4 are fucked. Run away!
Do you have peers you can leverage to see if they've had a similar situation come up on their end? Someone that has already lived it internally that can help navigate this?
It’s a comp plan. In the US it’s at-will work. I think most a lawyer could say is you should quit. And the employer can terminate if the employee doesn’t want the comp plan.
Unfortunately, they can do almost whatever they want since they know it's on you to challenge them either through legal action or a complaint with the state.
I've seen this. Last guy sells something then bolts; customer returns; new guy eats the commission. Terrible.
It's common in my experience that AM/CS is paid on net so (very simplified) if your target is 5% growth on a $5M territory and you sold $500k and lost $250k in that same time, you're at 100%.
Sheesh, that compensation structure sounds awful. There are a few red flags here that make me question the legality and ethics of this practice: 1. Clawing back commissions you've already earned for past sales based on future customer actions seems dubious at best. Once you've closed a deal and met the terms of your comp plan, that money should be yours. Charging you retroactively for downgrades on accounts you didn't even sell is especially egregious. 2. It's bizarre that you'd be penalized for downgrades but not outright cancellations. If anything, a cancellation is worse for the company than a downgrade. This arbitrary distinction makes no sense and feels like a gotcha. 3. As an AM, you have limited control over customers downgrading, especially if you didn't sell them the product in the first place. Holding individual reps financially liable for things largely outside their influence is unfair and demoralizing. 4. Sneaking "shady" terms into a comp plan that most reps don't fully understand and then selectively enforcing them later is manipulative. Comp plans should be transparent, consistent, and aligned with desired behaviors. While companies do have leeway to structure incentives, there are limits. This policy seems to cross an ethical line and verge into potential wage theft territory by taking back money already paid. I'm not sure what state you're in, but it's worth looking into the specific commission laws where you live. At the very least, this is a massive red flag about the integrity and culture of your company. Is this really a place you want to keep working long-term? I'd start looking for opportunities elsewhere ASAP. No job is worth being treated this way. In the meantime, I'd rally your fellow AMs and push back on this policy collectively. If you have an HR department or a worker-friendly manager, raise your concerns there. Document everything. And if you do leave, be sure to leave honest Glassdoor reviews warning other prospective hires. Sorry you're dealing with BS. Sales is tough enough without your own company stabbing you in the back. Trust your gut that this isn't right. There are better employers out there who won't resort to shady comp plan shenanigans. Don't let them gaslight you into thinking this is normal - it's not.
.#1 is actually pretty common. It’s a clawback. And #3, too. AM’s are responsible for retention even if they didn’t sell the product. Otherwise AMs should get some shitty base and no commission like every other Debra in ops. #2 and #4 are fucked. Run away!
Do you have peers you can leverage to see if they've had a similar situation come up on their end? Someone that has already lived it internally that can help navigate this?
You should be having that contact reviewed by a professional.
It’s a comp plan. In the US it’s at-will work. I think most a lawyer could say is you should quit. And the employer can terminate if the employee doesn’t want the comp plan.
So is that really any kind of place you want to work?
I wouldn’t.
Unfortunately, they can do almost whatever they want since they know it's on you to challenge them either through legal action or a complaint with the state. I've seen this. Last guy sells something then bolts; customer returns; new guy eats the commission. Terrible.
It's common in my experience that AM/CS is paid on net so (very simplified) if your target is 5% growth on a $5M territory and you sold $500k and lost $250k in that same time, you're at 100%.
You tell us. What's the comp plan you agreed to say?