How to Fire an Employee

Despite the classic scenes with the Bobs in the movie “Office Space“, firing an employee is no laughing matter.

Today’s post will cover how I fire sales reps.

I hope you find it helpful.

Firing People Sucks

 But as a sales manager, it’s my job to build the best sales team for the company. Sometimes, that means firing someone.

Here are common reasons I have had to fire a sales rep.

  1. Performance Issues: When a Sales Rep cannot (or will not) do the job
  2. Budgetary reasons:  Reduction in Force (RIF) , Layoff, Staff Cut
  3. Business reasons: Product/Market/Territory Shifts
  4. Behavioral Issues: Harassment, Insubordination, Lack of Team Chemistry

I have personally PIP’d and fired at least 25 reps. Managers who reported to me have fired at least 150 reps.

I remember every person I have ever fired and most of the people my managers have fired.

Who Gets Fired?

The Obvious Choices:

  • A rep who is not doing the job
  • A rep who is harmful to the team dynamic
  • A rep who fails to meet the requirements of a PIP
  • A rep who has sexually harassed someone, stole from the company, or egregiously broke a law or policy
  • The lowest performing rep
  • The rep most recently hired or covering the weakest territory

The Layoff, Reduction in Force (RIF), and Position Elimination

These are budgetary decisions which, in my experience, are usually made at the C-level and then pushed down onto management to perform. As one of my former CFOs put it bluntly,

“At the beginning of the year we forecast our revenues, expenses and gross profits. If revenues are down, then we need to reduce expenses in order to meet the gross profit forecast. Our most controllable expense is headcount. So when revenues are down, we’ll reduce headcount the next quarter by not backfilling positions, slowing down hiring, or eliminating positions.”

These are now standard operating procedure at many companies so I recommend being prepared if it happens to your team.

Here’s some different ways I’ve been involved in RIFs:

  • I was told to fire a specific number of people or reduce my salary budget by a specific percentage.
  • I was given a list of people to fire. I then argued if I disagreed with any selection.
  • I was part of the core management team that met to decide as a team who to let go based on the overall impact to the company.

I always have a stack ranking of my reps which I use when making decisions about RIFs, promotions, and team expansion. This ranking consists of performance to quota, the potential for employee to move up in the company, soft skills, and the value of his contribution to the team. While individual sales performance is a key factor, it’s not the only factor.

People I Have Fired

Sometimes managers will need to fire sales reps for reasons other than revenue attainment. Here are some examples of sales reps I have fired:

  • The Hothead was a very technical sales rep I inherited whose territory drove significant revenues for our team. He usually hit 90-125% of quota. However, he was very argumentative and combative with coworkers, customers, and me. I tried coaching him to improve his interpersonal skills without success. He was so disruptive to me and the team that I fired him within 2 quarters.
  • The Legacy Rep had been in the same role for over a decade. After new executive management took over the sales department, his role was changed from farming to hunting with significant prospecting. Although he had been successful in the farming role, he could not transition to a hunting role successfully.
  • The New Guy had been hired to cover a new territory which had been split off from an existing territory. Three months later, our company had a 10% RIF and I was forced to eliminate a position. Unfortunately for the New Guy, neither he nor his territory really had a chance to develop before he was let go.
  • The Admin was hired to build new programs for our sales team.  He did this successfully in his first year. In his second year, he was tasked with creating a channel reseller program. When the company had to do a workforce reduction due to a market crash, I eliminated his role because our channel program wasn’t generating the revenue that a single Inside Rep would produce.
  • 8 of my 11 reps on my emerging products team were let go in a company wide RIF. This was one of my roughest layoff experiences. We were hitting our numbers but the company was reducing it’s expenses due to a recession. Our division was eliminated as part of this RIF.

I also have a personal zero tolerance, immediate termination policy for sexual harassment, racial harassment, theft, or violence. I have been fortunate to have had to fire only one person for this in 20 years. HR was quite helpful in this case  – I wanted to punch the guy out.

However rare, situations requiring immediate unplanned termination do happen. I recommend involving your boss and HR immediately if this comes up.

How I Fire Someone

Before firing someone, it is important for me to get my mind right by reflecting back to the time I hired him. 

When my employee first joined the team everyone had high hopes. The rep was excited to land this job. He hoped to build a future with us, make good money, and even be promoted into something better.

I was thrilled to find a solid candidate who impressed us during his interview and brought unique talents to our team. I counted on him ramping up quickly, making a solid contribution to the team, and hitting quota.

Then somewhere along the way things broke down, and I am now going to fire him.

I owe it to him to do this quickly, but with compassion, kindness and respect. Here’s exactly how I fire someone:

  1. I reserve a private office and schedule a meeting.
  2. I include HR or my boss in the meeting, if required by company policy. Both are already well aware of any performance issues and PIPs.
  3. In the rare case where I am concerned a rep might become explosive or combative, I’ll have another person in the room and/or security nearby. I’ve only done this twice in 2 decades.
  4. I have a box of tissues and a few bottles of water on hand.
  5. We meet. As soon as my rep walks in, he’ll have an idea that something bad is about to happen – especially if my boss or HR is present. So I get right to it and say. “The reason we are here is because effective today, you are being terminated.”  That is the last thing my employee will hear because of what’s now going on in his head.
  6.  I’ll say that I’m sorry it came to this. Then I will slide a piece of paper to him that details the separation terms*. I will review these with him briefly. He may not remember all of the details so it’s important he has this copy to take with him.   
  7. I won’t debate or discuss any specifics of his performance other than stating that he didn’t meet the requirements.
  8. I offer a bottle of water and will push the tissues his way if he needs them.
  9. And finally, I will explain our immediate next steps and his options including when to leave, how to gather his belongings etc.

That sounds pretty easy and dispassionate, doesn’t it?  It’s not.

I care about this person and now I’ve just turned his life upside down.

*Separation terms should spell out in detail the following: (a) Amounts due for severance, accrued vacation time, sick leave, commissions, etc. and when these will be paid. (b) Who to contact with any questions – this should be your HR person. (c) Anything that needs to be returned to the company – cell phones, computers, security cards,  keys, IDs.

What It is Like to Be Fired

My rep enters the meeting in a high level of anxiety and tension. Either he’s already on a PIP, which makes every meeting with me uncomfortable, or in the case of an unexpected termination, he sees HR in the room and immediately goes on high alert.

As soon as he hears “effective today, you are being terminated”, blood will rush to his head and his heart will start racing. He’ll be thinking things like:

“How am I going to pay my mortgage?”

“What about my health insurance?”

“How do I tell my wife?”  ”

“Where will I find another job?”

“This isn’t fair!”

“You’re an a$$hole!”

“You’ve ruined my life.”

“I cannot believe this is happening.”

So I have learned to make it fast. I stick to reviewing the separation terms and then helping him leave. The entire process takes less than 10 minutes.

Most of the time, he’ll need a few minutes to compose himself.

Sometimes he’ll  want to leave directly from the meeting room without seeing anyone. If so, I’ll retrieve his keys, wallet, and personal items for him and walk him out. I’ll then gather his personal belongings and ship them to him.

Other times he’ll want to say goodbye to the team and clean out his desk. If so, I’ll give him a few boxes and will leave him alone to pack and say his goodbyes. I don’t hover over him, nor do I allow security to hover over him. I trusted him as part of my team everyday for months or years. He’s not going to steal anything or hurt anyone on his way out the door.

The last thing I do is walk him to the door and tell him once again that I’m sorry.

Things I’ve Done Right When Firing Someone

Involved HR from the Start. Although many people feel that HR can overcomplicate things, my experience is that when it comes to firing people, HR is very helpful.  They understand the company policy, they have fired a lot more people than I have and they usually have processes in place to handle everything.

Coached & “Managed Out” before PIP’ing.  Not everyone is cut out for a career in sales. If an employee is doing everything he can, but is just not a good fit for sales, it’s my responsibility to manage him out long before putting him on a PIP. By managing out, I mean that I’ll do everything I can to encourage him to explore other career alternatives inside and outside the company. I’ve had sales reps move to from my teams to customer support, facility operations, sales engineering, marketing, and product development within the company. I’ve had others who left the company to pursue careers ranging from woodcrafting to IT support.

Helped the Rep Land a New Job. I’ll do this when I have good reps who are being fired. Usually this is due to a RIF, layoff or department closing.  I’ll introduce my Rep to headhunters, hiring managers, and others in the industry who can hire him. I’ll send him job openings when I learn of them. I love helping people find good jobs.

Didn’t Pile On or Get Defensive. I’ve had reps yell at me arguing that they shouldn’t be fired, that someone else performed worse, that I was being unfair and that I was destroying their life. My response was to give the rep a few minutes to rant then to calmly say, “The decision has been made and is final.” There’s no point in arguing or defending my position.

Got Them A Better Package.  I’ve been able to time terminations so that an employee could get extended health coverage, extra bonus pay or even a few weeks of extra salary. It’s never enough to cover for the job loss, but it’s something to consider. Many companies have a standard package but are willing to be flexible.

Mistakes I’ve Made When Firing Someone

Overcomplicating the PIP.  The first time I put a rep on a PIP, I really blew it. I created a PIP with metrics that required me to spend several hours a week gathering data and creating reports so I could measure him against it. I ended up spending more time working with this underperforming rep than the rest of my team. Since that time, I’ve made sure to only PIP on the 3 Big Rocks and on meaningful metrics that are accessible in a dashboard or commonly viewed reports.

Negotiating and Extending the PIP.  In addition to overcomplicating my first PIP, I also let my rep negotiate it’s requirements with me. First, he talked me into lowering the requirements to about 75% of a typical rep’s metrics. Second, when he missed those targets, he pleaded for more time. I ended up extending his PIP twice for a total of 6 months before finally firing him. It was a tortuous, drawn out learning experience for me.

Delaying a PIP or a Termination.  Every time I have delayed either, I’ve looked back and realized that I should have done it sooner. As long as I am meeting with my rep regularly for coaching and 1-on-1s, I should move quickly knowing that I have done my part as a manager to help him succeed and that I’m aware of any extenuating circumstances.

Discussing a PIP or Termination with Others. I’ve discussed my plans to fire an employee with other managers only to have this info get back to the employee through the grapevine. The employee then told me he was humiliated by this. I’ve learned to be very judicious with who I discuss PIPs and termination plans.

Telling the Rep How Hard This Is for Me. Even worse,  I once told a rep that this was as hard for me as it was for him. That’s just not true. I’m not the one who has to worry about how I am going to pay my bills next month or how to deal with my life being turned upside down. So no matter how I feel, I no longer say how hard this is for me to the rep being fired. I can talk to my wife or my friends about how I feel.

Overpromising. I don’t promise anything that I cannot deliver. For example, I won’t promise to rehire the person if certain conditions are met or if another role opens up. Many times after I have fired someone, others have shared information with me about his poor performance or unacceptable actions after he was gone. Other times, I was expecting a position to be reopened at a later date only to find the budget for the position was moved elsewhere.

How I PIP a Sales Rep Who Cannot Do the Job 

This happens when a sales rep has been regularly underperforming against his primary sales objectives: Bookings, Pipeline and Activity.

If I have been consistently having 1-on-1s,  providing coaching, doing role play, and working with the rep to amplify his strengths, chances are I have done everything that I could to help the rep be successful in this role.

Usually, by this time, when I review my Staff Log, I see a clear pattern of me nagging the rep to take certain actions tied to metrics such as:

  • Follow up on leads according to our lead qualification process
  • Contact every open opportunity to move them to the Next Step or close them if you cannot
  • Perform specific levels of activity (calls, emails, etc.)

Right about this time, when reviewing the staff log, I’ll get angry. First at the rep, for not doing his job. Then at myself, for not identifying this pattern sooner. And finally, at myself again for falling a position where I am doing more work than the rep to make him successful.

The next step is for me to calm down. I try very hard never to PIP an employee when I am angry. I’ll sit on this issue overnight.  I’ll discuss my observations with a few people  –  usually a trusted advisor, my wife, and my boss. I’ll ask them if I am being unreasonable, too demanding, or making a hasty decision. Usually I’m told this is the right thing to do and that I could have done it sooner.

Depending on my company’s policies, I may need to:

  • Provide documentation of verbal and written coaching
  • Provide documentation of written warnings
  • Meet with HR
  • Have my PIP approved by HR and senior management

Whatever those requirements are, I’ve already got them covered.  My weekly 1-on-1s, team meetings, and the Staff Log provide whatever documentation is needed.

The next day, I meet with the rep. I explain exactly what the problem is and I’ll give him a PIP which outlines the steps we’ve already taken to address the problems, how the rep is currently performing, and what is required for the rep to keep his job.

I make the PIP as short as possible. Ideally it should be 30 days with weekly check-ins that have milestones based on bookings, pipeline & activity metrics. If he is not hitting the milestones, he can be fired before the 30 day PIP period is up.

During the PIP period, the weekly check-ins have replaced our weekly 1-on-1s. We’ll review performance vs. the targets and I’ll assign tasks for the upcoming week.

Without exception**, every employee I have personally put on a PIP has failed to meet its requirements and remain employed. The rep will usually scramble hard for a few days in a flurry of increased activity before then returning to his normal and unacceptable level of performance.

About half of the time, the rep will resign before completing the PIP. It’s actually such a demoralizing time for the rep, I think it would be kinder to just fire him. But PIPs are required for many companies.

**The only exception I’ve seen was at a data-driven SAAS company where we hired inexperienced college grads as Business Development Reps who were tasked with making 130 calls and booking 4 appointments per day. Nearly a third of our BDRs were placed on PIPs during their first 90 days. However, almost all of them recovered and went on to be productive employees. Our sales rep turnover rate was under 10%. In this case, the PIP was really a coaching tool that taught the reps how to work hard, leverage our systems, and be accountable.

My Experience on the Other Side of the Table

I’ve lost my job when employers went bankrupt, I’ve been RIF’d, and I’ve had my position eliminated. In most cases, I was not totally surprised. Either my company was struggling, our industry was struggling, or the economy was struggling.

I can tell you how it felt to me. It felt like I had been FIRED.

Here’s what ran through my head:

  • How am I going to pay the bills and take care of my family?
  • I just relocated for this job a few months ago!
  • Why didn’t you tell me sooner?
  • I just bought a house!

Many times, I felt like a failure and was embarrassed.

Now that I’m further along in my career, I’ve experienced a number of employers, jobs, and economic cycles.

I’ve learned that sometimes my actions are directly tied to the results and sometimes there’s a much bigger picture that I don’t see.

To help prepare my employees for an unexpected job loss, I’ll frequently tell them “This isn”t the last job you are going to have.”  I encourage them to live off their base salary and save their commissions. I caution new reps not to raise their standard of living when they get their first BIG commission check (the way I did by buying a new car and a big house when I was new to sales). Having money in the bank makes weathering a job loss much easier.

Lastly, every time I have lost a job, I eventually found one that was better and took me to levels I’d have never imagined.  Sometimes I needed to lose a good job in order to find a great one.

I hope that happens for every rep we ever have to fire.

If you want some help building your sales team or improving sales, contact me here. I’d love to hear from you. 

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