There are two sides to everything: Ying and Yang, Good and Evil, Black and White, Summer and Winter. Similarly, Sales Management has fun, and not so fun parts. It can be rewarding but also includes making tough decisions. The fun part of Sales Management is working with your team and watching them excel. However, when it comes to dealing with constant lack of performance, you as the manager need to implement change. What are you supposed to do if a team member does not live up to the required standards? Should you fire them? Should you ignore under-performers? I think the answer to this question is pretty straight forward: support your team, in good times and in bad times. In good times and bad, do what is best for THEM. My tip: avoid using performance improvement plans (PIPs)

Performance Improvement Plans – Why I Hate Them

In my 20 plus years managing Inside Sales and Teleprospecting teams, I have had to put a handful of people on what is known in the industry as a PIP, a Performance Improvement Plan. In my opinion, PIPs don’t live up to their name, as they are not about improving an employee’s performance.  Rather, a PIP is a process document used to prove that the Manager has tried to help the employee, over a period of 30-90 days.  The documentation is a paper trail that is used to protect the company from legal action.

I have read many blogs that call PIPs evil.  I agree because they suck the humanity out of the Sales Manager (who really isn’t trying to help an employee improve) and the employee who is being humiliated throughout the process.  They also impact the rest of the team, bringing morale down and taking everyone’s focus away from what is important. I, personally, have never seen a PIP work.  The reason is that PIPs are not about helping a struggling employee improve performance.  Instead, they are a clear indication that they are about to be terminated.

I understand that PIPs are necessary to protect companies from future legal actions.  I know that some employees are not going to work out, no matter how great the interview process or background checks.  Still, I disapprove of PIPs and for several reasons:

  1. They are humiliating.  No matter how hard one tries to keep the PIP process confidential, most people on the team know when someone is on a PIP.
  2. PIPs lower morale.  Team members who are not on a PIP have their own opinions about the individual on a PIP.  If they like the individual, Management is the bad guy.   Even if they dislike the person they may sympathize with them because they have to go through the PIP process.  Again, Management is the bad guy. Low trust and respect between Sales management and employees is directly proportional to a lack of motivation and success.
  3. PIPs require Managers to spend time focused on the documentation/paper trail process, giving them less time focusing on managing the team to success.  While the PIP event is in play, the “good” team members are, typically, left to fend for themselves, because the manager is heads down focused on the poor performer for the next 30-90-days.

How to Avoid PIPs

I have used two distinct methods for avoiding PIPs.  The first one is a GOSPA Plan.  The second one is a recruiter.

GOSPA Planning

When employees are given the opportunity to develop their own success plans (see my blog on GOSPA Planning: Goals, Objectives, Strategies, Plans, and Activities) and understand the metrics and consequences for not meeting the metrics, PIPs can be avoided.

For example, say a Teleprospector has the following metrics to meet each month:

–          Make a minimum of 800 dials/month

–          Have 20 Key Conversations with decision makers

–          Build a Teleprospecting lead pipeline of a  minimum of 24 potential leads

–          Generate 8 qualified leads to pass to Sales Qualified Leads (SQLs)

–          Receive sales approval on at least 6 of these SQLs for addition to their Sales Funnel

The Teleprospector is required to build a quarterly GOSPA Plan, which outlines how they will achieve the above metrics.  The manager’s job is to review the GOSPA plan, ensure that it is a viable plan, and to review with the employee what will happen if the metrics are not met each week/month/quarter.  Working with the Rep, the manager should discuss the consequences for low performance.  Assume that the Rep under-performs on his metrics by 20% for a period of 4 weeks.  It should be understood that the manager will take specific action to help the employee improve, such as sitting in on calls or providing coaching on the specific issues.  If improvement doesn’t happen within a 90-day period, termination may be the next step.  The manager manages all employees to this standard.  Everyone is aware of the actions and consequences for not meeting the Goals that the employee outlined in his GOSPA.  The required “HR/termination” documentation is an offshoot of this process.  No PIP is required.

If sales management holds weekly individual meetings to review performance and achievement-to-date against plan, everyone will know where they are, each and every week.  This information is documented as a standard course of managing the team members.  The manager’s goal is to quickly identify issues and to really work to help an employee improve, if they are falling behind their stated metrics.  When a GOSPA  Plan is in place, the employee should be going to their manager if they are having problems, because they developed the plan and know what they are accomplishing or not.  In essence, it is their plan and they are responsible for working to the plan as they outlined in their plan.

Recruiter to the Rescue

Many years ago, I was asked to turn-around a call center that was under-performing.  The team of eight was struggling to meet the demands of the job.  I quickly implemented my Best Practices and was able to get the team moving in the right direction.  This took about 6 weeks.  Once the team understood what they needed to do and had additional training, they began to generate quality SQLs for the sales team.

Unfortunately, one of the team members was having a difficult time picking up the phone to make calls.  The bad news for him was that Teleprospecting is a phone job.  While he was very confident about the technology and solution offering, he hated making phone calls.  He was the most technical person on the team.  I could see that he would make a great customer service rep for some company.  I didn’t know how he got hired, but he was a good person and I wasn’t going to humiliate him by putting him on a PIP.

I asked his manager if he knew of any recruiters who might have customer service positions available.  The manager got back to me within a few days with a few recruiter names.  We called them and asked them to anonymously recruit our team member out of our company.

Within two weeks, our lack-luster team member was in my office.  He handed me his letter of resignation, stating: “This is a much better job for me.  I like talking to customers; I just don’t like initiating phone calls”.

By utilizing a recruiter to “remove” this person out of this “wrong-for-him” job, I saved our company time, money and kept morale from sinking.  It was the most compassionate way to manage this situation.  The team member will never know how his manager and I helped to get him the job that was a better fit for him.  We did it without humiliating him or impacting team morale.

PIPs are never about performance improvement.  If you must put someone on a PIP, do so as a last resort.  My best advice is to manage performance, every week based on a plan like GOSPA, that your team is responsible for building.  Or use recruiters to move people out of mismatched positions into more suitable positions at a different company.  Use compassion when helping people.  Your compassion will help you and your team in the long run.

More Sales Management Insights: