When we ask sales managers to list their most unpleasant activities, firing someone is always at the top of the list. Unfortunately, over 78% of sales managers in our surveys also indicate they don’t really know how to prepare do it. They rely on a Human Resources person to help them prepare for the actual event, document all actions and decrease the chance of the person being fired to legally challenge their dismissal.
Firing a sales rep should not be taken lightly. The average cost of a mis-hired sales rep can be over $325,000. Have you calculated your cost of mis-hire? Download our easy to use form HERE.
Knowing the costs of mis-hiring and firing someone cements the golden rule: Hire Slow, Fire Fast and use a Talent Management Process to ensure you avoid mis-hires and eventual terminations from your company.
Follow these four basic steps when ‘pulling the plug’:
- Choose the right reason to fire them. Talent Reviews allow you to judge your sales reps not solely on their quota achievement but other metrics like Win/No Decision Rate, Pipeline Conversion, Average Sales Cycle, Opportunities Created, Lead to Pipeline and overall number of meetings. Look at the below Talent Review Scorecard. Should the bottom ranked sales rep be terminated? Or the one with the lowest percent of quota? Ask yourself some critical questions:
- Is the low performance my fault as a sales manager?
- Is the sales rep completing the proper activities which will lead to an improvement in quota performance?
- Am I coaching the rep according to their strengths and weaknesses based on tenure and experience?
- Always have someone with you. Never do it alone. One common mistake by rookie sales managers is to not have someone else in the room or on the phone (use virtual if necessary…see my sales management in a virtual world post here). One on One termination leads to a ‘he said; she said’ situation. Not good for you, the former employee or your attorney if you get sued for wrongful termination. Don’t take the chance.
- Never have it be a surprise. World Class Sales Managers document poor performance via a Performance Improvement Plan (aka: PIP). Download a sample here.
These PIP’s if executed correctly can eliminate the sales rep being surprised. Unexpected terminations are the worst experience you or the employee can ever have. I know first hand as it happened to me once: I didn’t have a scorecard; I was above quota performance; My direct reports were flourishing with several recently promoted. And my boss walks in one day and fires me. Totally unexpected, no documentation (PIP) and it was a complete shock. To avoid any legal trouble, he threw cash at me to keep me quiet.This should never happen.
- No emotions please. You absolutely need to take all emotion out of the termination. The employee is sure to be emotional. In fact, I have had several get downright nasty. By keeping your responses very unemotional, you take out an important part of the conversation- feelings. Discussing this with the employee can only lead to frustration, begging for a second chance or worse- legal issues. Check your ego at the door and keep you feelings inside.
There many other steps in a termination meeting that I skipped. Many HR professionals will add to the above list with numerous ‘rules’. My intent here is to highlight some of the most important actions needed. One of the best Sales Managers I have ever seen terminate sales reps is Peter DeFrank. Anyone who has ever been ‘sacked’ by him has always stated they knew it was coming; their performance needed improvement or it wasn’t all about the quota. Transitions for these professionals were clean and they usually ended up in a much better position that suited their skill set and talents. This is how firing a sales rep should be done.
Want more information around proper terminations. Or Talent Management in general? Leave a comment and we can send you a copy of our book Topgrading for Sales. It describes how to proactively develop a robust Talent Management Program. It is our best seller for a reason.