Employing the right people for your sales team is important. You need to have someone who can offer the revenue to justify their compensation. And when someone doesn’t meet their agreed-upon sales performance goals, there will come a time when that staff member should be let go.
But how long do you retain that member of staff for? You can’t just keep on setting sales goals for them (that they don’t match) or spend months having the team carry that person. This won’t help your team’s morale.
Terminating contracts sooner
The Harvard Business School did a survey, comparing the best performing sales teams against the worst performing sales teams. They found that the best-performing companies would often terminate a staff member’s contract sooner if they failed to meet sales performance goals.
According to the survey, 18% of the sales organisations that were considered to be high-performers terminated the employment of sales people if they underperformed in one quarter. This is compared to just 5% of the sales organisations that were underperforming.
The survey found that 73% of best performing sales teams, terminated the contracts of underperforming employees within one year. In comparison, underperforming sales teams terminated just 52% of their underperforming employee’s contracts.
Interestingly, it also found that for some underperforming companies (12%) it took more than two years for poor performing staff to have their contracts terminated.
What the Harvard Business Review survey demonstrates, is that poor performers shouldn’t be working in your organisation for too long.
Terminating the correct contract
However, to ensure that you’re not removing the wrong people, you need to consider how you monitor sales performance.
For this, your organisation needs to have software to help set sales goals and monitor performance. Without this, team leaders and managers are in the dark on the actual performance of the salespeople in their employment. Measurement software was critical to two-thirds of the best performing sales teams in the survey.
You should also set sales goals that are realistic but are be too ‘soft’ on your sales teams. The above survey found that 75% of the best performing sales teams would raise annual goals by more than 10%.
Use sales-monitoring software
So what this all means is that you need to ensure that your sales people are performing to a standard that is good for all. By monitoring their sales performance, you can be sure that you’re employing a team that is contributing to the business. If they don’t perform over a protracted length of time, they should leave the organisation or move to another non-sales team.