How to Implement Performance Improvement Plans (PIPs)

For every organization, dealing with underperforming sales development representatives (SDRs) remains a common reality. The reasons behind poor performance vary from case to case. Ultimately, managers have to take the call: retain or relieve. Terminating the services of an SDR is a befitting slap on the cost incurred by that employee.

This includes the investment made on talent acquisition, learning and development, and compliance. But, the deficit arising out of the underachievement remains the major setback for businesses. So, are you taking enough action on the issue with strategic procedures like a Performance Improvement Plan? If the answer is no, here’s what you need to know about implementing PIPs with defined accountabilities:

What is meant by a Performance Improvement Plan and why your sales team needs it

If you are a sales-driven company or have sales and marketing as a major business process, the SDRs will find it difficult to perform in certain instances. But, these employees don’t start performing poorly right away. It is a result of long-term exposure to improper processes, faulty communication, lack of engagement, and inadequate learning and training activities.

To deal with such challenges, a strategic move is required and one way to do that is through a Performance Improvement Plan. A PIP includes the recognition of reasons leading to poor performance of the staff members, formal procedure to revive their output, and defining expected outcomes with respective actions. The actions include demotion, termination, lateral transfer, or continuation of the same profile based on target achievement.

Most of the companies misinterpret this method as a measure to transfer accountability to the concerned employee. Some even go to the extent of misusing such plans against subordinates. Ultimately, the organization loses reputation as an employer brand and suffers hostility within the work culture. Therefore, the sales-driven organizations need to carry out this process diligently while putting in genuine efforts to retain salespeople. Hence you need it for both long-term and short-term operations to ensure business sustainability.

Market Fact: Higher engagement can lead to a 20% increase in sales.

Implementing a PIP strategically in a sales environment

Formalized performance improvement strategies require mutual support from both the manager and employee ends. As the sales-based profiles are more likely to expect office politics and internal competition. Hence, managers need to be careful while dealing with this process. As a mandatory best practice, documenting the entire planning is necessary before moving forward. Before putting your salespeople on a PIP, make sure to thoroughly communicate the deviation from expected results. Once you are done with initialization, you should follow the below-mentioned steps as per the suitability to your sales team.

1) Trim down accountabilities, objectives, stakeholders, timeframe, and end results

As I mentioned earlier, documentation holds paramount importance throughout the procedure. This safeguards the employer from allegations of malpractices and prejudice while maintaining employee morale. Inform the stakeholders who will participate in the process, their roles and accountabilities, and objectives for each stage of the process. As a rule of thumb, the plan should be actionable and completed within a predefined period. Upon the completion of the planned period, the management has to provide the sales rep with a decision regarding their employment. The entire documentation process shall duly encompass these factors on a mutually agreeable basis.

Insight: Almost one-third (32%) of the surveyed sales rep have to wait for at least three months to get feedback.

2) Devise a time-bound, actionable plan with provisions for planned reviews

Most of the PIPs lack regularity in their implementation phase. This is the result of poor planning at the beginning. The managers looking after the program need to take reviews at fixed intervals. These meetings can also include the HR personnel and peers as they have direct exposure to the market. The employee on improvement program may need help on ground level like telecalling etiquettes or in deal closure. Therefore, make sure to render a dynamic action plan that garners active support in case of help required at any level. Holding meetings also affirm their trust in the organization’s efforts. It is highly recommended to integrate these plans with your cloud-based payroll software to streamline coordination.

3) Provide on-field support and discuss improvements openly

The later stages require close monitoring from superiors. If possible, send the SDR to known clientele. They can give you tonnes of vital information regarding the actual conduct of the SDR. Accompanying these employees during sales activities is an inseparable component of any PIP. Their reporting managers, HR, and peers are expected to provide on-field support whenever required. On-field support also allows you to make changes in the program as per the concurrent developments.

4) Take the final call

Regardless of the outcome, include the employee when you take the final call apart from other stakeholders. Many companies disclose their decision without bothering to share the results of the procedure. You may find this convenient, but the SDR will end up leaving the firm in a state of dystopia in case of termination. On the contrary, telling your staff the exact reasons for revival helps them in continuing with habits that lead to success. Either way, summarizing the process with detailed bifurcation acts as an extremely useful resource for both the employee and employer.

PIP Documentation

Keeping track of the employee’s progress will ensure the success of your PIP, which is why documenting every step of your plan is necessary. Note down the reasons why you’re putting the SDR on PIP. Initialize the plan with counseling and lay out the plan as mentioned in the above sections. This includes leave and attendance policy, remuneration, KPIs that are tangible goals, distribution of performance area, and reporting. Lastly, clearly mention the resultant actions of each outcome. All in all, documentation acts like a mediatory platform for all accountable individuals.

Summing Up

PIPs in sales profiles are more complex as compared to other fields. If you are pioneering it into your organizational culture, expect some challenges in implementing it on your sales team. The role of top executives is to take concrete steps and clearly communicate the line of action.

Creating a progressive working environment is the first step towards a performance-driven culture. Everybody welcomes things going in a positive direction, but even if your SDR fails to perform after continuous efforts, provide them with proper support during the exit. If they turn out to be not a great fit for your organization, provide references whenever possible. Performance improvement plan in sales vertical is an opportunity to retain talent and improvise recruitment, training endeavors, and employer brand at large.

Divyang Metaliya

Divyang Metaliya is a Business Consultant at FactoHR, an India based HR and Payroll Software solution provider. He is a creative business strategist with more than 8 years of experience.