What are the best practices for putting under-performing sales reps on a performance plan?

Everyone should have a performance plan and objectives by which their performance is evaluated. I assume your question is about putting someone on a performance improvement plan, commonly callled the "measured mile."

This is really an interesting question. Unfortunately, too often we see that managers don't do this--they aren't managing performance, they are reluctant to address poor performance and leave poor performers on board---impacting the performance of the overall team. To often managers use the "layoff" or "reduction in force" as the excuse for getting rid of poor performers---the person never really knows they were a poor performer (they may suspect), they are never given the coaching and opportunity to improve.

Going back to the question, the process is based on the presumption there has been a performance plan and objectives in place, consistent coaching and feedback about performance. At the time the manager decides to put the person on a measured mile, it shouldn't be a surprise--if it is there should be a serious coaching session between the manager and her manager.

In the session there should be a clear review/discussion of the non-performance issues. There needs to be an agreeement of what needs to be done to correct performance, there need to be very clear measurements, with a defined timeframe (ie 90 days) and clear identification of the outcomes--termination, or whatever.

The manager must assure the person "owns" the plan -- not just acknowledges it. The person must choose to go onto the plan or can choose to "opt out" which means they are choosing to resign.

The manager must "own" the plan. She must be committed to the succcess of the person if they choose to go onto the performance plan. Too often, managers are the failure point in these---they have already made the termination decision and are just going through the motions HR makes them go through. It's not fair to the person and a tremendous waste of time and resources. The manager must be committed to the person's success, providing agreed upon training, support, coaching, etc.

In establishing the plan, it has to be reasonable and achievable. Too often, managers "pile on," making it impossible for the person to have a successful outcome. Focus on the few critical objectives to get the person on back on track, the other areas can be addressed later.

The rest is execution--hopefully the right framework has been established. The person owns the plan and is committed to achieving a successful outcome. The manager owns the plan and is committed to a successful outcome. Failure to achieve this is a failur not only of the person--who will be terminated, but of the manager.

Alex's system is interesting for the matrix part. So if they get 2's on the matrix, then you have to decide the "cost/benefit" of working hard with the salesperson. The cost will be your time. The benefit will be a kick-butt sales person. Only you can decide. If you decide it is, indeed, worth your time, then its time to level with the salesperson.

Give them the brutal truth, "Dude, you are doing really bad as you know. I don't want to lose you, but if this keeps up that could happen. I'm willing to work very hard with you to turn this around, if you are."

The way the salesperson answers will verify if it is worth your time. You should be able to tell if the answer is sincere or not if not initially then within a week or two of working hard with them.

By working hard, I mean breaking down and analyzing everything they do from communication on phone (make them record phone calls and transcribe them), to written communication, to presentations and follow up. Time to work closely on every aspect, adjust and get buy in on how they can improve. It's a pain, but worth it if the salesperson is motivated.

If the salesperson isn't personally motivated, you should skip the above steps and make a change.

Let me start by saying that how much time you give depends on your corporate culture. I like to go no more than 90 days with an under-performing rep. It also depends on the expectations you set up BEFORE you identify an under-performing rep. That's right, you, as a sales manager, need to let each and every employee know what they are accountable for and what the consequences are for not hitting those goals BEFORE they become A, B or C players. Haven't done that yet? Shame on you. You should never have a conversation with a sales rep that goes like this:

Manager: "you're not meeting my expectations?"
Salesperson: "I wasn't aware of that."

In my opinion, there should be three conversations that occur with under-performing reps:

Verbal Warning: You let the salesperson know during your monthly/weekly meeting that they are not meeting your expectations. You ARE having regularly scheduled meetings with your reps right? You let them know where they have not met your expectations and ask them how they think they can improve and how YOU can help them get there. You re-emphasize what your expectations are and let them know AGAIN, what the consequences will be if they fail to meet those expectations.

Informal Written Warning: You follow the steps in Verbal Warning again during your next meeting but then you document in an informal email to the sales rep that the sales rep has not met your expectations. In this instance, you can cc your boss or HR if you choose. It's not a bad idea so that HR can build the file in case you need to take action.

Performance Improvement Plan: If the salesperson fails to meet your expectations again for the third time, then you get serious with the final step. You follow the steps in Verbal Warning and you also issue a Performance Improvement Plan. In my career, I've only seen one or two people make it past this stage and come back strong as an A player on my team. This is all about documentation here. This is, in essence, a contract between you and the rep delineating exactly what they will do over the prescribed time and what will happen should they fail to execute. This is the sample document that I have used for year: http://db.tt/USv3LVB

These might not be easy for you but if you take these four steps (set expectations, verbal warning, informal written warning, performance improvement plan) in a timeline that suits your corporate culture and sales cycles, you'll do a better job of topgrading your team, improving team morale (nobody wants to work with a loser), and reducing corporate risk.

For mid-size to larger companies, it's always possible to implement some sort of performance management tool like ones offered from Success Factors and Taleo, which have some metrics built in.