Our business has been struggling for the last year or so. Several of my salespeople are just not producing. I’m not sure I can continue to work with them. When do I decide to terminate their employment?
Wouldn’t it be nice if we didn’t have to ask this question? In an ideal world, everyone would succeed, and our biggest problem would be how to acknowledge the real heroes among a group of deserving colleagues.
But it is not an ideal world, and every sales manager is, at some point, faced with this decision. At what point do you decide to fire them?
This is a very personal decision embedded with emotional ramifications. There are all sorts of individual mitigating factors that influence the answer to this question. I just came from one of my clients, for example, where one of the non-performing salespeople has been with the company for over 10 years, and was hired by the company’s president.
Clearly, that presents a different set of factors than the new hire who just isn’t getting it.
While I can not sort out all of those individual issues for you, I can offer some over-all guidelines.
First, I’m going to assume that the salesperson is costing the company money; that the person is not profitable. This is an important assumption because I think different rules apply if the person is profitable. I’m using profitable here in the sense that I describe in Kahle’s Kalculation. If you haven’t become familiar with that, retrieve the free download for “How to Kreate Kahle’s Kalculation.” Depending on the type of business and the dynamics of the selling situation, if a sales person’s KK number is over 25% or 30%, that person is probably not profitable to the company. This is a far more sophisticated measurement than just looking at the gross profit or sales produced in that territory.
So, let’s assume that the salesperson is not profitable for the company.
Secondly, I’m making a disclaimer that there are certain legal issues that need to be attended to, and I am not in any way advocating short-cutting any processes or procedures that are required by your company or any government agency or institution. I am not advocating you do anything illegal. My only goal is to provide you some guidelines to consider. Suggestions on when to make the decision about terminating someone are one thing, whereas the actual act of terminating is something else.
Having said that, here’s a couple of thoughts:
1. You seriously consider terminating their employment when you conclude that they do not have the capabilities or the motivation to succeed in a reasonable amount of time.
I call this the “can do” and “will do” characteristics. They may not have the capability – not enough of the “can do.” I see this so often in my practice. A new owner/chief sales officer/sales manager comes on the scene and inherits a sales force from his/her predecessor. The new manager looks at some of the individuals and asks, “Why was this person ever hired?” They just don’t have the capabilities to do what the new administration expects.
Or, it may be an issue of a lack of drive, determination, and motivation. In other words, the “will do” characteristics. No matter what you do, this sales person doesn’t accept your direction, doesn’t do what you want him /her to do. It’s not that the sales person doesn’t have the ability, it’s that he just won’t make the decision to do it.
I most commonly see this among experienced sales people who have been with the company for a number of years. They often become so set in their ways and so sure of their position that they will not make the changes that management wants them to make. If they would just decide to do it, you know they could. But, their energies are consumed with the debilitating task of proving that their established habits are the right ways to do something.
They lack the “will do” characteristics.
So, when you determine that they either can not or will not do what it takes to be successful in a reasonable period of time, then it is time to seriously consider severing the relationship.
2. You seriously consider termination when they are not making fast enough progress toward profitability.
You could have sales people (and I’ve seen lots of these) who are making very slow progress. When it looks like it may be years and years before they will be profitable, it’s probably time to allow them to find themselves in another position.
Having said that, I’m a believer in giving someone the benefit of the doubt. If someone isn’t performing, have a heart-to-heart with that person, and clearly and precisely lay out what needs to happen, by when in order for that salesperson to turn the corner. Put together a 30-to-90-day plan, with benchmarks and regular reporting. Give them one last opportunity to succeed, knowing that their job is at risk.
If, under those circumstances, the person doesn’t make sufficient progress, it’s time to decide to part company.
3. Seriously consider termination when the amount of time and effort you must devote to them continues to hurt other employees or causes your company to suffer.
Marginal performers have a way of sucking the positive energy out of you. You often find yourself spending so much time thinking and worrying about the marginal sales person that it impacts your family, you neglect other employees, and you neglect higher-value things you could be doing for the company. Some of that is appropriate and part of your job. But when it becomes a chronic issue or out of proportion, you need, for the good of the other employees in your organization, to sever that which is dissipating your energy and time.
I recognize that this is often a thorny, emotionally-charged issue. I hope that these thoughts will help you sort it out in a way that is appropriate for your company, your job, and your people.