Your Manager Is Making Promises You Don't Know About And It's Going to Cost You

There's a conversation happening in your company right now that you don't know about.

A manager is sitting across from an employee — maybe over coffee, maybe on a Zoom call, maybe in a hallway — and they're talking about money. Commission. Bonus. A raise that's "coming soon." A target that, if they hit it, will mean a big payout.

The employee walks away believing they have a deal.

Nothing is in writing. Nothing went through HR. Nothing was approved by finance. But in that employee's mind, it's a promise. From their boss. Which means from the company.

And when that promise doesn't show up on their paycheque, things get ugly fast.

This Isn't Hypothetical

I've seen this pattern play out across multiple companies and industries. It almost always follows the same script:

A manager — usually in sales — makes a verbal commitment about what an employee will earn. The employee performs based on that commitment. Comp is calculated based on a plan the employee never saw, or a plan that was changed after the fact, or a plan that simply doesn't exist in writing. The employee pushes back. The company says "that's not our policy." The employee says "that's not what I was told."

And now you're in a dispute. Maybe a demand letter. Maybe a tribunal. Maybe a lawsuit.

All because a manager said something they shouldn't have, and nobody in leadership knew about it until it was too late.

Your Manager IS Your Company

Here's the part that catches most founders and CEOs off guard: it doesn't matter that you didn't know.

In the eyes of employment law, a manager acting in their capacity as a manager is acting on behalf of the company. When they tell a direct report "you're going to earn X," that can be treated as the company making a commitment — whether HR approved it, whether it's in a plan, whether anyone above them had any idea.

The employee reasonably relied on what their manager told them. That's the legal standard. And "we didn't know our manager said that" is not a defense. It's an admission that you don't have controls in place.

The Commission Plan That Doesn't Exist

The most common version of this I see is in variable compensation — commissions and bonuses.

A sales leader brings someone on and talks about OTE. Big numbers. Exciting opportunity. The new hire is motivated, they perform, and then the payout doesn't match what they expected.

Why? Because there was never a written plan. Or the plan was changed mid-year. Or the plan was so vague that the manager's interpretation and the company's interpretation were two different things.

Here's what a tribunal or employment lawyer sees when this lands on their desk:

No written plan means the company can't prove what the terms were. Retroactive changes mean the company changed the rules after the employee performed. Manager verbal promises mean the employee has a reasonable expectation based on their boss's words.

That's a losing position. Every time.

What Makes This Worse

In my experience, the manager making these promises is often your top performer. Your best closer. Your revenue driver. The person you can't afford to lose.

Which means when the dispute surfaces, leadership is caught between the employee who was wronged and the manager who generates the revenue. And too often, the employee loses that fight — not because they're wrong, but because the manager is too valuable to hold accountable.

That's not just a legal risk. That's a cultural one. Because every other employee is watching how you handle it. And they're drawing conclusions about what promises mean at your company.

How to Fix This Before It Breaks

This is entirely preventable. Not complicated. Not expensive. Just disciplined.

Put every commission and bonus plan in writing. Every single one. Signed by the employee and the company. If it's not in writing, it doesn't exist. This protects the company AND the employee. No ambiguity, no he-said/she-said.

Make it clear: managers don't promise comp. Compensation conversations go through HR or through a documented approval process. Managers can discuss roles, performance, and development. They do not freelance on money. Train them on this explicitly. Make it policy.

Audit what your managers are actually telling people. When's the last time you asked your sales leader what they told new hires about their earning potential? When's the last time you compared what was said in an interview to what's in the offer letter to what's in the commission plan? If you don't know, you have a gap.

Never change a comp plan retroactively. If you need to change a plan, it takes effect next quarter. Not this one. Retroactive changes to commission are one of the fastest ways to end up in a dispute — and one of the hardest things to defend.

Review comp plans with HR and finance together. Not just finance. Not just the sales leader. HR needs to see the plan because HR is the one who's going to deal with the fallout if it's broken. Get everyone in the same room before the plan goes live, not after someone complains.

The Real Cost

The cost of writing a commission plan is a few hours of work. The cost of not writing one is legal fees, settlement payments, employee turnover, and the reputational damage that comes with being known as a company that doesn't honour its commitments.

But the biggest cost is the one nobody talks about: losing good people because a manager made a promise the company didn't keep.

That employee trusted their boss. They performed based on that trust. And the company let them down — not out of malice, but out of sloppiness.

That's fixable. But only if you fix it before the next promise gets made.

Go check. Today. Ask your managers what they've been telling your people about comp.

If you don't like the answer, at least you found out now.