Variable Pay - Salary Structure

Dear Members:
Performance based incentives is part of Salary Structure in my organization.
One of our employee who has joined our organization since its inception was given the appointment letter where in the variable pay was calculated @ 10% of Basic, because it was an intial stage there were lot of changes done in the salary structure to make it more competative and there after the variable pay was revised to 10% of CTC.
The above change was communicated to him, but now he is going back to the Appointment Letter and asking for the difference to be paid to him.
In addition to this my organization is not doing financially too well to be able to let go of this resource.
In view of the above matter would it be ideal to pay the difference and going forward for him make an exception by reducing his variable pay as per the appointment letter?
Looking forward for some suggestions.
Thank you.
Regards,
Nikita

Hi Nikita,
Even we faced the same in our organisation. But before he could move further we gave him a copy of
'Revised term of Employment' for the employee, wherein all the terms and conditions of his employment are fixed as per the present and future expected performance of our company.
But our employee didnot create much problem. since our employee was from the start of the firm we made him sit with us and explained him about the present situation of the company. Our employee clearly understood us and signed the 'Revised term of Employment' without any fuzz.
I dont know whether it would help you... If it did help you then i will be happy...
Regards
Vasanth

Thanks Vasanth, what was not done on our part is documenting or revising the terms and conditions and giving him a copy, what we gave was a revised Salary Structure doc.
Regards,
Nikita