I'm considering a dramatic reduction in the compensation plan of one of our company's salespeople. I'm not sure how to approach this issue and still salvage my relationship with him. If you have any thoughts, I'd really appreciate your insight.
Some background: I negotiated our salesperson's current compensation plan with him at a time when I had almost no sales or financial management experience. Now we're renegotiating, and I think the old compensation plan is way too high. Our board of directors agrees. I can get into the reasons why if you'd like.
So: I feel an obligation to be fair to this employee because he is basing his life decisions around an expected income of $X. I believe that a different income, $Y, is what the company can support and still pay him a great salary at a market rate. $Y is much lower than $X.
What would you do in this situation? How would you prepare for this discussion? What would you call "fair?"
Thanks so much in advance!