---
title: "After the Pay and Performance Reform, All My Employees Quit"
description: "Recently, salesperson Xiao Yang called to say he had been thinking it over and decided to resign. When asked why, he was furious: \"The boss keeps making random reforms, I can't work like this!\" According to Xiao Yang, his trading company had undergone a round of pay and performance reform, which made him, a four-to-five-year veteran, very dissatisfied. \"The previous 'base salary + commission' model was simple to calculate based on sales amount, but now with so many added assessment items and such complexity, isn't it just to make us work more for less pay? It's simply...\""
author: "张雨薇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-08-06"
categories: "Management & Methods"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/after-the-pay-and-performance-reform-all-my-employees-quit-d488ea44.md"
original_source: "https://mp.weixin.qq.com/s/GZaa3zEsyvz8NB7nPrQunQ"
translation: "https://xinjignxiao.com/zh/articles/%E8%96%AA%E9%85%AC%E7%BB%A9%E6%95%88%E6%94%B9%E9%9D%A9%E5%90%8E-%E6%88%91%E7%9A%84%E5%91%98%E5%B7%A5%E9%83%BD%E7%A6%BB%E8%81%8C%E4%BA%86-d488ea44.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/after-the-pay-and-performance-reform-all-my-employees-quit-d488ea44/"
citation: "张雨薇. “After the Pay and Performance Reform, All My Employees Quit.” New Distribution, 2025-08-06. https://xinjignxiao.com/en/articles/after-the-pay-and-performance-reform-all-my-employees-quit-d488ea44/"
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---

# After the Pay and Performance Reform, All My Employees Quit

> Recently, salesperson Xiao Yang called to say he had been thinking it over and decided to resign. When asked why, he was furious: "The boss keeps making random reforms, I can't work like this!" According to Xiao Yang, his trading company had undergone a round of pay and performance reform, which made him, a four-to-five-year veteran, very dissatisfied. "The previous 'base salary + commission' model was simple to calculate based on sales amount, but now with so many added assessment items and such complexity, isn't it just to make us work more for less pay? It's simply..."

Recently, salesperson Xiao Yang suddenly called to say that after much consideration, he was ready to resign.
When asked why, Xiao Yang was furious: **"The boss keeps making random reforms, I can't work like this!"**
According to Xiao Yang, his trading company had undergone a round of pay and performance reform, which made him, a four-to-five-year veteran, very dissatisfied.
"The previous 'base salary + commission' model was simple to calculate based on sales amount, but now with so many added assessment items and such complexity, isn't it just to make us work more for less pay? It's simply heartless capitalism!"
......
After calming Xiao Yang down, I found the boss of his trading company, Mr. Wang.
As soon as I met Mr. Wang, he was also grimacing: **"People's hearts are scattered, the team is hard to lead! Now it's not just Xiao Yang who wants to leave; everyone wants to leave!"**
From Mr. Wang, I learned that since the company's founding, it had used the **base salary + commission** model, but over time, many problems emerged:
> 1. In peak season, sales are good but labor costs are high; in off-season, sales become difficult and salesperson turnover is high. Over time, employees are unwilling to share the company's hardships.
>
> 2. Salespeople only visit high-volume stores, and even if visit rates are required, they just go through the motions. Sales focus on best-selling products, while second- and third-tier high-margin products basically don't sell.
>
> 3. Front-end promotion is difficult, store coverage is very low, and tasks for salespeople are repeatedly reduced but still not completed. Pushing them hard leads to massive overstocking and returns, harming both company interests and terminal customer relationships.
To change this, Mr. Wang consulted many peers and finally decided to adopt the **base salary + commission + KPI assessment + net profit sharing** model, aiming to **standardize employee actions through process indicator assessment and encourage employees to sell more high-margin products through net profit sharing, thereby increasing per-store output.**
The ideal was beautiful, but reality gave him a harsh lesson.
**On one hand,** having run the trading company for over a decade, many employees were older and felt confused by the reform, seeing it as a disguised pay cut. Additionally, a few "troublemakers" within the team stirred up trouble, triggering a collective protest and strike.
**On the other hand,** the finance department reported that salary calculation was too complex, with too many assessment items, and salespeople spent a lot of time each day calculating their wages.
The supposedly more "scientific" pay and performance model seemed "out of place" in Mr. Wang's company. After all the fuss, many veteran employees were threatening to resign. Where exactly was the problem?
Mr. Wang's logic and direction in the pay and performance reform were correct, but for distributors, besides applying mature pay and performance models, it is more important to **combine with the company's actual situation and advance steadily and slowly.**
Regarding the reasons for the failure of his pay and performance reform, Mr. Zhao Bo, founder of New Distribution, believes the main points are as follows:
**1. The distributor's own influence within the team is insufficient, and credibility is questionable.**
A strike immediately after reform indicates that internal employee relations were already very tense before; the reform was just the trigger. This also reflects problems in daily management, such as lack of transparency and fairness.
Many distributors started as husband-and-wife businesses or partnerships with relatives, and in daily management, they cannot achieve "merit-based employment" but rather "nepotism." With one big boss and several small bosses within the company, their own voice and influence are diluted.
Secondly, many distributors have low educational levels and find it difficult to be transparent in financial matters, leaving employees without a sense of belonging or security.
**2. Management granularity is insufficient.**
The initial **base salary + commission** model was too crude. After recognizing the problem, a more "scientific" performance assessment system was introduced, but without considering the team's actual situation and acceptance capacity, the reform could not be implemented.
Most salespeople generally lack the boss's holistic thinking. When process management is not done well, using profit as an assessment in pay and performance is very difficult.
**3. Inadequate mobilization before the reform.**
Any reform will inevitably affect some people's interests. Before implementing any policy, full mobilization and in-depth communication should be done, openly and honestly discussing with employees so they understand the purpose, process, and expected effects of the reform, dispelling their doubts and resistance.
**4. The reform was too radical, causing employee dissatisfaction.**
Starting with drastic changes all at once, without giving employees an adaptation period or matching process implementation actions, led to significant salary fluctuations and employee dissatisfaction.
**5. Insufficient resource reserves for the reform.**
Before the reform, talent reserves and financial budgets should be prepared in advance to avoid falling into a passive situation.
During the reform, it is inevitable that some employees will oppose or choose to resign because they cannot adapt to the new system. If there is personnel turnover, having backup players ready at any time ensures the normal progress of various tasks.
At the same time, business may fluctuate during the reform period, such as changes in sales, increased recruitment costs due to personnel loss, and expenses for motivating employees to adapt to the new system. Financial budgets should be prepared in advance to address these issues.
From the salesperson's perspective, their expectation for work is simply less work and more pay. Without intervention, they tend to sell best-selling products that are easy to sell. From the distributor's perspective, they need to consider company profits and manufacturer tasks, requiring salespeople to sell not only best-sellers but also high-margin products and continuously develop new markets.
**Different roles, different positions. There is a natural contradiction between the two. If not handled properly, it can lead to personnel loss at best, or business collapse at worst.**
From the distributor's perspective, how can they drive salespeople to execute better?
Mr. Zhao Bo suggests that management should be more detailed and humane:
**First, build personal influence and improve relationships with employees.**
Some employees are naturally distrustful of the boss and immediately take an opposing stance at the slightest sign of trouble, which is detrimental to the implementation of any policy. Distributors need to establish their authority and credibility in daily management through fair, just, and transparent management methods, winning employees' trust and support.
For example, if you want to assess profit, financial matters should be as transparent as possible, allowing salespeople to clearly understand product ex-factory prices, retail prices, and company expenses. At the same time, performance assessment design should be simple and effective, easy for employees to understand and calculate.
**Second, make rewards and punishments public, and once relevant systems are established, do not change them easily without necessary reasons.**
A public reward and punishment system can effectively avoid under-the-table operations and opaque decisions, enhancing employees' enthusiasm and sense of responsibility. A stable system also ensures organizational stability, avoiding chaos caused by long-term changes, and enhances authority.
**Third, pay and performance should be tailored to the business, avoiding a one-size-fits-all approach.**
Management requires effort to study. When formulating the pay system, distributors should fully consider employees' positions, customize assessment methods according to actual conditions, targeting the market, products, and people, and through reasonable incentive mechanisms, align employees' goals with the company's.
In the past, New Distribution has published many articles and industry cases on pay and performance. I have summarized a few points for reference.
**1. Base salary design should be reasonable.**
If the base salary is too high, salespeople become lazy; if too low, they lack basic security. The base salary should be slightly higher than the local industry average. The optimal salary structure is base salary accounting for 20-25%, commission/dividends for 40-45%, and KPI rewards for 20-25%.
Salespeople have basic security while also having sufficient incentives to pursue higher performance.
**2. Dynamic KPI assessment, concise and clear.**
Fixed KPI assessment items reduce salespeople's enthusiasm. It is recommended to adjust KPI assessment items monthly based on peak and off-season changes, ensuring KPIs match current business priorities and market conditions.
At the same time, the number of assessment items should not be too many. Assess 3-4 items per stage, with simple and clear assessment standards, easy for salespeople and financial staff to understand and execute.
**3. Result-oriented, with emphasis on process management.**
Relying solely on sales results can make salespeople focus on short-term goals while neglecting long-term development and customer relationship maintenance.
In assessment, process action assessment can be strengthened, assessing both results and process, linking salespeople's compensation to the quality of work process and results.
**4. Balance reward and punishment systems.**
Focus on rewards, with appropriate punishment. Employees are not enemies. Punishment should be an auxiliary means to correct mistakes and improper behavior, not the primary management method.
**5. The pay system should be competitive.**
A pay system lacking competitiveness will lead to the loss of excellent salespeople. In previous reports of excellent distributor cases by New Distribution, one of the key factors in maintaining team stability is that frontline salespeople's salaries are 20% higher than local peers' income.
**6. The pay model should change with the company's different development stages.**
In the early stage, a commission system can be used to motivate salespeople. In the stable development period, it is necessary to shift to management efficiency, adopting growth-based pay models such as sales task assessment and comprehensive evaluation systems.
**7. Learn from successful cases and communicate more with peers.**
Go out more, learn from the pay models and advanced management experience of excellent peers in the industry, and combine with your own company's actual situation and business characteristics to flexibly adjust and optimize the pay structure, ensuring its applicability and effectiveness, and reducing trial-and-error costs.
In the pay and performance reform in the FMCG industry, many distributor bosses have experienced trial and error. Common pitfalls include being swayed by employee opposition, overly crude management methods, and insufficient process management.
But in the final analysis, **most failed reform attempts are due to a lack of deep understanding of the underlying logic, directly copying successful cases and causing "acclimatization problems."**
To fundamentally help distributors understand and solve problems in pay and performance reform, Mr. Zhao Bo provided a thinking model commonly used in the industry: **"Product + Tool + Method"** .
That is, a product that can sell, a method that can sell, and a set of actions that drive salespeople to effectively place products in stores and ultimately be bought by consumers. All three are indispensable. Only doing a single dimension of performance assessment will inevitably lead to pitfalls.
**All products should be based on the logic of sell-through. Blind distribution will cause inventory backlog and return problems.**
At the design stage, each product should have its market positioning, target consumer group, and suitable sales channels clearly defined. When we clearly know which channel the product is suitable for, what display methods, price bands, and promotions to use, we can more effectively achieve sell-through. **These actions can be quantified into assessment mechanisms for salespeople.**
For example, Product A is designed for dining scenarios, with the core channel being restaurants. In performance assessment, salespeople can be rewarded 5 yuan for each restaurant they get the product into, and display rewards can be set up with the distribution: 5 yuan for each floor display, and another 5 yuan for each table setting.
What salespeople want is to earn money without too much hassle. When **actions are broken down and quantified and placed in front of them, salespeople only need to execute** , and if they do it, they get the corresponding reward. After completing the actions, then discuss sales commission, profit sharing, etc. **Through effective process management, achieve results and properly distribute benefits.**
**In execution, proceed step by step, give employees an adaptation period, introduce necessary sales tools to salespeople, and organize relevant training.** In the months before the reform, continuously optimize sales strategies and methods based on product characteristics and market feedback. Make it clear to employees that the purpose of pay and performance reform is not to deduct wages, but to jointly do well in the market, seek costs from the market, and also improve salespeople's abilities and salary levels.
**Final Thoughts**
Pay and performance itself is not complicated. Many distributor bosses understand it at a glance. The difficulty lies in deeply understanding the underlying logic of the reform and gaining the team's trust, understanding, and support.
When policies are difficult to push forward, the first thing to consider is not how to reform pay and performance, but whether the distributor himself can improve and change first, go out to learn more, communicate with excellent peers in the industry, broaden horizons, and enhance cognition.
From August 19 to 21, the 7th China FMCG Conference with the theme "New Demand, New Supply" will be held in Shanghai, and the 5th China FMCG Distributor Conference will be held concurrently.
"New Distribution" surveyed nearly 500 distributors and will release the "2025 China FMCG Distributor Business Condition Survey Report" at the conference, to see which distributors are growing and which are being eliminated this year. Where is the focus of business? Where are the business opportunities?
At the same time, at the distributor conference, we have invited Li Jixiang China Distribution Operations Center Vice President Cheng Feiyu, Chichi Holding Group General Manager and Founder of Zuolin YouShe / Shenghuo Yizhan Convenience Store Zhu Jun, Shenzhen Yataixuan Industrial Chairman Li Yong, Tianjin Shicheng Bofa Trading Co., Ltd. General Manager Zhang Shicheng, Jiecang Wanggou General Manager Zhong Xiaoping, Zhengzhou Dapeng Trading Co., Ltd. General Manager Zhang Gaifeng, and other brand executives, excellent retailers, and transformed major distributors to discuss how distributors should go, transform, and win in the new demand and new supply market environment!
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## Citation metadata

- Publisher: New Distribution
- Author: 张雨薇
- Published: 2025-08-06
- Canonical: https://xinjignxiao.com/en/articles/after-the-pay-and-performance-reform-all-my-employees-quit-d488ea44/
- Original source: https://mp.weixin.qq.com/s/GZaa3zEsyvz8NB7nPrQunQ

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