Sales Management: Performance-Based Terminations

As a Sales Manager, when you have to make terminations based on performance, it’s not always as cut-and-dried as action-based or behavior-based offenses. Many times performance-based terminations are the culmination of a process—you’ve set out your minimum performance standards and have determined they aren’t going to be a longterm part of your team.

It’s not easy, but again you are only responding to their actions or their inactions. However, in order to cover yourself, you should still follow a series of steps and handle it the same way every time.

Establish minimum performance standards:

It’s important to not only establish your minimum performance standards, but publish them—discuss them and ensure your entire team understands what is expected of them.


In the event you have a salesperson or salespersons falling below what you have determined is to be acceptable levels of performance, you should communicate that (possibly verbally at first) and let them know you are aware of their performance and that it doesn’t meet the company’s criteria. You should also make it exceedingly clear what future ramifications are regarding their lack of production.


If the salesperson’s numbers don’t improve, you should sit down for a more detailed discussion of how you can help them. What do they feel is keeping them from achieving your goals? Is more training needed? Have they not gotten access to something they need? Don’t assume you know without sitting with them and asking questions. You should always leave these discussions with a set plan of action for them to improve their sales.

Written Warning:

The final step before all terminations should be a written warning. Let them employee know for certain that their performance is substandard and subject to termination. Don’t sugarcoat it. Make sure they know the next step is the final one. This written warning should be signed by both parties and made a part of their personnel file.

Let the data make the decision:

One of the things about performance-based terminations is you can really take all emotion and judgement out of it. Either the salesperson in question is or is not living up to expectations. There really is no decision to be made. They make this one themselves. You simply have to follow through with what you’ve told them you’re going to do.

If you don’t have a timeline for this activity you should establish one and stick to it. Every time! Perhaps when a new salesperson is hired they are on a 90-day probationary period where they are expected to meet certain criteria.

The minimum performance standards are just that: minimum! We’re not talking about someone who is just short of being a champion—these are people who are barely making the cut. You’ve established this minimum performance criteria and they aren’t meeting it. Others in your organization are not only meeting it, they are far surpassing it—that’s why it’s a minimum. Don’t start to think you are letting go of one of your best salespeople.

You’re not.

In Summary:

After the 90-day period if they are not up to the minimum, maybe you issue the verbal warning and give them two weeks. At the end of that two weeks, you could sit down and counsel them to to see if they have made any strides at all.

You’re now four months in with this person.

After another two-four weeks, I would issue the written warning and give them 30-days to either meet your standards or termination will result.

This will put you pretty close to a six-month mark with someone. You’re making a significant investment in them and at this point you will know if they are going to get it or not.

If you put a step-by-step process in place you must follow it every time. You can’t keep someone who is substandard because you like them or they are a friend of a friend. If you do, you’re opening yourself up to some issues you probably would rather not face. You’re going to have enough problems without bringing some on yourself.

Don’t put it off. Stick to the program.