There are two sides to everything: Yin and Yang; Good and Evil; Hot and Cold; Black and White. For Sales Management, its two sides are the fun and not so fun parts of managing a team. While managing teams has its benefits, team management also includes making tough decisions. You might think about various practices to implement, such as performance improvement plans.
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 both of these questions is pretty straight forward: support your team, both in good times and in bad times and do what is best for THEM.
My tip: avoid using performance improvement plans (PIPs) whenever possible.
Performance Improvement Plans – Why I Hate Them
In my 20 plus years managing Inside Sales and SDR teams, I have had to put only 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; they are not about employee performance improvement or an action plan to meet employee needs. In actuality, 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. Simply put, it is a paper trail that is used to protect the company from legal action.
I have read many blogs that call PIPs evil. They suck the humanity out of the Sales Manager, who isn’t really trying to help an employee improve. But it also affects the employee, who is humiliated throughout the process. They also impact the rest of the team by bringing down morale and taking everyone’s focus away from what is important. Personally, I have never seen performance improvement plans work. This is because PIPs are not about helping an employee recover from poor performance. Instead, they are a clear indication that they are about to be terminated.
More Harm Than Good
To be clear, I understand that PIPs provide company protection from 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 generally disapprove of PIPs for several reasons:
- 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.
- 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. Sometimes, 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 work performance.
- PIPs require Managers to spend time focused on the documentation/paper trail process which means they spend less time focusing on managing the team to meet expected results. 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 Performance Improvement Plans
I have used two distinct methods for avoiding PIPs. The first one is a GOSPA Plan. The second one is a recruiter.
Employees need to have the opportunity to improve performance and develop their own success plans (see my blog on GOSPA Planning — Goals, Objectives, Strategies, Plans, and Activities). They should understand the metrics and recognize the consequences for not meeting the metrics. This way, PIPs can be avoided.
For example, say a SDR 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 (SQLs)
- Receive sales approval on at least 6 of these SQLs
- Achieve set pipeline quotas for their approved SQLs
Now say the SDR has 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 review with the employee what will happen if they dont meet the metrics 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. The manager should take specific disciplinary actions to help the employee improve. This could be as sitting in on calls or providing coaching on the specific issues. If employee development doesn’t happen within a 90-day period, termination may be the next step. Performance management should hold all employees to this standard. This way, everyone is aware of the consequences for not meeting the Goals outlined in their individual GOSPAs. The human resources formality of termination documentation is an offshoot of this process.
You don’t need Performance Improvement Plans.
Sales management can hold regular checks about individual performance reviews and achievements to-date against the plan. Then, everyone will know where they are and be constantly learning from prior weeks. This information is documented as a standard course of managing team members and increasing employee engagement. When a GOSPA is in place, the manager’s goal is to quickly identify issues and work to help an employee improve if they are falling behind their stated metrics. Similarly, the employee should be going to their manager if they are having problems; they developed the plan, and thus 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 GOSPA.
Recruiter to the Rescue
Many years ago, I was asked to turn around a call center that was experiencing performance issues. This 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. It 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 a SDR’s job is to make phone calls, which he hated doing (Add The Best Interview Questions Resource Here). While he was very confident about the technology and solution offerings, he just wouldn’t make his calls. He was the most technical person on the team, and I could see that he would make a great customer service rep for some other company. He was a good person and in the right role he would do well. I didn’t want to make him feel worse 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 made some calls and asked them to anonymously recruit our underperforming BDR 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 and money. While also maintaining morale, this was the most compassionate way to manage this situation. The team member will never know that his manager and I helped to get him the job that fit his needs and skills better. 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. Team members have the opportunity to tell you “how” they will manage themselves to achieve their stated objectives. After establishing GOSPA, determine what steps you will take if members don’t meet KPI’s and other metrics as outlined in the employees’ GOSPA.
If the employee does not match the role (you made a hiring mistake), use recruiters to move people out of mismatched positions into more suitable positions at a different company. Use a PIP only when it is clear that the team member isn’t really interested in working through continuous improvement exercises aimed to boost their performance.. Whatever method you use to help your employees, make sure you add compassion to the mix. Your compassion will help you and your team in the long run. In the end, you want a “win-win” experience.
Download the free GOSPA Planning tool here.
Read the book The Radical Pipeline Strategy: How to Grow Pipeline and Revenue by Optimizing Sales Development. This book outlines tested best practices and implementation strategies that I developed while rebooting and building 65 SDR and Inside Sales organizations.
Find out more about SOMAmetrics’ Intelligent Prospecting Platform and get free resources on our website at www.somametrics.com.