compensation model

Posted: November 8, 2013
By: Clay Cerny

A client called about his performance review.  At first, I thought he was just getting a raw deal from his boss, but it's much worse than that.  This client is in sales.  His employer changed the compensation model about six months ago and moved from a base salary to a salary draw, which means that an employee has to repay salary if she does not meet a certain performance target. I've heard of draws in the past, but never with the employer threatening to use it in this manner (claiming the employee owes all of the pay he has received).  I want to research this topic more in the coming weeks and update this post.  For now, my advice is to proceed very carefully before working with any company using this system of compensation.