Struggling with a Non-Performing Sales Manager: Should We Honor His Full Salary Request?

Dear All,

We have a sales manager who has been a poor performer since the day he joined. Despite receiving a high salary due to his background at a reputable company, he has not generated any business for our company. As a result, the management has decided to reduce his salary to half, withholding the rest. Despite this adjustment, there has been no improvement in his work performance. Now, he is requesting his full salary.

What should be our next step...???

Even I am into the same problem. At least you took a step; we are only paying him. I will give this option to management. I have given him a month to prove. Let's see.
But please put all these things in an email to have a proof of the material in the future.

Hello Jyoti,

First of all, as per my knowledge, NO company has the right to retain their employees' salary, even in the case of underperformance. You need to keep the employee in an action plan with appropriate timescales. You can give three written warnings regarding his poor performance. One thing you need to mention clearly in the action plan is that if he doesn't show any improvement within the agreed timescales, the company can ask him to leave the job or else terminate him on the grounds of non-performance. Let me know if you need more help.

I am aware that it is not the right thing to do. But he has been an absolute non-performer even after being given tons of warnings over the months. No amount of action plan can work for this guy, and we are thinking of terminating him. But do we have to pay him the retained salary? What is the right way to go about all this?

Hi,

I fully agree with Mr. Madhav. I think companies should not judge employees' performance in a short period (2-3 months). Give them time to prove themselves or discuss the company's expectations with them. If there is no improvement, it is better to bid goodbye to them on grounds of non-performance.

Thank you.

Dear Ms. Jyoti,

I am surprised that you need advice on such a matter. Well, all these outcomes have to be foreseen before his joining your company. You could take the following steps:

1. For the Sales force, his salary has to be linked to performance basis, carefully watching his performance. Before completion of the probationary period of 90 days, after 60 days, a show cause notice has to be served, and his service has to be terminated within 15-21 days without further reason.

2. If his desired performance has not been highlighted in his appointment order, then he deserves his due salary. His salary can be withheld if his services are under suspension during an ongoing inquiry of his actions and deeds.

3. It is better to get rid of him as soon as possible. Maximum, he can ask for one month's notice pay if his tenure has crossed the probation period.

Please write if you are looking for more advice.

Thank you,
Adarsh Kumar Jain
Email: jainzen@gmail.com

It's not an issue of warnings because you mentioned that he is from a good company. If he is indeed from a good company, you should have a discussion about why he is becoming a non-performer, what all the problems he is facing in the market, and so on. Actually, he needs proper training, and then he might perform.

Hi Jyothi & Neha,

To my knowledge, the organization doesn't have any right to discount the salary, except as mentioned in the offer letter. The only thing we can do is to give him a goal sheet for a specific period (discussing with the concerned department) and take a letter of acceptance from him, stating that he would achieve the goal sheet conditions; otherwise, he would resign himself, instead of facing termination. That's all...

And one more thing... Whether it's a good company or a struggling one, the background doesn't matter. Only performance speaks.

Good luck...

CRK
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Dear Jyoti,

I am indeed flabbergasted by the issue of non-performance by the Sales Manager who has worked with a reputed firm. Neither morally nor legally can you reduce the salary of this employee. Despite several warnings by you (hopefully in writing), if there is no output, then you can very well terminate the service of this person but will have to pay the salary as agreed upon by you.

Regards,
Kalyani

Hi Neha,

As you mentioned, the salesperson has come from a very reputed company, and he has not brought any business since the day he joined. First, you should verify his performance and achievements in his earlier company. Secondly, if he is on probation, you can terminate his services due to poor performance, as per your company's terms and conditions mentioned in the probation letter. Do not retain his partial salary, as it will have negative effects within the organization and outside as well.

Firstly, I would say that performance is always comparative. It all depends on whether the product is saleable in the market or not, and whether proper marketing efforts have been made by the company to promote the product. Salespeople are not magicians, especially when the economy is in such a bad shape. It is very easy to blame salespeople.

It is up to the superiors to determine whether the person is making appropriate efforts to bring in business. Apart from business-related criteria, there are other monitoring standards to gauge whether one is putting in the necessary efforts. If there are areas that could be improved, the company should work on them and try to provide assistance. I am confident that the individual must have met all the necessary parameters for the job during the interview.

However, if the individual is not hardworking, lacks a positive attitude, and engages in negative talk about the company, I believe it is better not to invest more time in that person and to terminate their services following the proper process. Nevertheless, deducting salary, etc., does not help and is not the right way to deal with people.

Hello.

Retaining the salary is not the solution. If there is no productivity from the employee's side, it is the responsibility of the management to check the reason for the same. Perhaps the employee is facing some problems in sales, and training can help him out, or counseling may be beneficial. Termination of services should be done only when the employee himself is not interested in the job.

Dear Jyoti,

You can create a performance-incentive package system where your sales manager is given a small percentage increase based on their performance. The performance and incentive should have a direct relationship until the project achieves success. This approach will motivate the sales manager, provide security, help achieve targets, and meet salary expectations.

Regards

Dear Jyoti,

Please set targets and notify him in writing that if performance is not up to the mark, then you will be terminated. Retaining salary is not advisable.

Dear Group,

I beg to differ with most of the people here. We are too involved as HR professionals.

I remember having read somewhere about the success of REVA, the electric car. When it was launched, it was a failure. Upon analysis, they couldn't find the gap. They had hired the best salespeople from top companies in the automobile industry and still faced failure! A renowned consultant who assisted them in the recovery and successful relaunch commented that hiring salespeople from the automobile industry was the biggest issue. They were selling this as a CAR! REVA was not just a car (at that point, and to some extent even now), it was a concept. So, fresh salespeople were hired from a different background of concept selling, and now it is a success. Does this resemble a similar condition here?

Why is it that no one is looking from the employee's end? I am certain no one wants to be an underperformer at any point in time. Why not analyze what the issues are? Why has performance declined? Does the employee need help? What kind of help? These questions need answers.

If the employee was bad, they would not have been hired. So, if the management decided to hire them, I am sure they would have seen some spark earlier. I strongly feel that the issue is that "The salesperson is not able to understand/adjust to the new setup." They need to be reoriented to the organization's goals and products. Give them the benefit of the doubt. Put them in a training mode on the products/systems followed, maybe 3 days to one week in every department (a week in the production site, half days with the accounts team, etc.). It's worth a try. During all these exercises, a senior person from the management side should monitor/discuss progress with them. After this process, assign them targets for the next 60/90 days and monitor their performance continuously. Then decide whether to continue or let them go.

Any positive thoughts on this are welcome.

Regards,

Rajeev

Dear Neha,

The step taken by your management in retaining half of his employee's salary is just not right, morally, ethically, or even legally. The right course of action would be to put down his level of performance with facts and figures in writing and issue a letter calling upon him to improve his performance as per company standards. There has to be a time-bound action plan. If at the end of the timeline decided with the employee, talk to him and tell him that you'd be happy to accept his resignation. Termination will be an option available to you always.

Best Wishes,
Vasant Nair

If he is permanent, you can give him termination by paying 2 months salary on some grounds like absenteeism or defying orders of seniors or any other issue that can make impact on company goodwill.
If he is on probation, just wait for the time when he is completing his probation, give revised & strict appointment letter, which includes targets & sales achievement. If he doesn't improve, then show him the way on the basis of T&C of appointment letter.

Dear Seniors,

I am associated with a pharmaceutical company, and my sales manager has given me an assignment to design a performance appraisal for the sales field. Can you please help me in this regard?

Warm Regards,
Vijay Bhandari

Dear Jyoti,

If the incentive is not linked to performance as per his appointment letter clauses, then legally the organization cannot withhold his salary.

What you can do is get him to a one-on-one talk with his superiors and let them discuss what the catalysts are to his not being able to perform well. Also, let his superiors inform him that part of his pay is being linked with performance henceforth. He can be issued a letter from HR informing him, in writing, about the change in his employment conditions.

In such a scenario, the onus to perform is definitely on him as well. If he does not meet his targets, then obviously the company needs to pay him less as per the new included clause.

Has his probation been confirmed? If he is not performing from day one, then ideally his probation could have been extended. If it is not satisfactory again, then employment could be terminated on the grounds of non-performance.

I hope one of these options works the trick for you. Get back in touch in case of any queries.

Reshmi Pillai
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Hello everyone.

I think as an HR practitioner, everyone experiences this in their career at least once.

In an exactly similar case with my company, we not only managed to reduce the salary, but eventually we also asked the manager to leave in a dignified manner. This was possible because performance parameters were already established prior to his appointment. In case of a sales manager, it is not difficult to at least spell out the top line expected. The decision to hire him at such a high salary was very important to us, and myself and our MD had made it very clear to him that the company had invested in him so much that he could either make or break our company.

During subsequent appraisals, he first tried to make excuses. But we involved professional consultants for this activity, and within the first six months, he knew for sure that he was lagging. He then asked for three months' notice at a lesser scale, which we did. We also negotiated with him to complete certain tasks which he did, and we parted amicably. This was possible because the whole thing was handled in a sensitive yet fair and open manner.

In general, to continue association further, performance appraisal has to be accepted by both parties. Where stakes are high, performance parameters should be specified. The more the salary, the more specific the goals.

Also, if performance-linked pay cannot be designed, at least a correlation should be established between the concerned parties so that you can build on it later.

At least informal performance appraisal and feedback should exist between management and core top managers.

Hope this helps some of you.

Dear Jyoti,

If he was a performer or from a reputable company, we need to find out the reasons why he is unable to generate leads. Yes, proper counseling may be required. If he is unable to prove himself based on what he had mentioned in his resume, you have to abide by the company's policies, which you may have issued during his appointment. If not issued and there is no EXIT policy in your organization, you can always give him one month's notice and show him the door. This is not retrenchment in his case. It is due to his failure to meet his targets. If you had not set his target or had not discussed it with him earlier, then it is your mistake, and I don't believe HR personnel or his immediate superior would make such a mistake.

Therefore, the remedial solution is:

1. Conduct counseling.

2. Provide training if required.

3. Give him another month to prove himself; otherwise, remove the excess baggage from your organization as soon as possible (he is being paid for his work and worth, not for being from a reputable company).

Regards,

K.B. Singh

It is high time to put the person in Performance Salary mode. He has to earn his salary on achieving the target only. Make a complete actionable and achievable target for 3 months and see if he improves.

Dear Ms. Jyothi,

Please let me know on what basis you have hired the person for that position. Have you considered their performance or solely relied on their previous company's name? If the decision was based solely on the previous company, there may have been an error. However, there is still time for you to take remedial measures.

1. Inform the person's boss and request a written memo regarding their performance.

2. Have you investigated why the individual joined this company? Was it for a temporary arrangement or for career advancement?

3. As far as I am aware, you do not have the authority to withhold the person's salary unless instructed by their reporting authority.

4. Upon receiving the memo from the reporting authority, you can then send official communication based on their performance and any action plan you have implemented.

5. Throughout these processes, ensure you maintain all relevant documents. This will allow you to substantiate the individual's qualifications and suitability even if they move to different positions.

6. You can request feedback through a memo and if performance does not improve, refer to the appointment letter for guidance on seeking alternatives.

By following these steps, the individual may align with performance expectations or seek opportunities elsewhere.

Regards,

Prasanna Kumar

Email: gvprasanna11@gmail.com

Phone: +919632719459

Dear Friends,

I totally agree with Mr. Garg, and not just because I am from Sales, but because of the economic downturn. The sales force is the backbone of the organization, and salespeople not only bring in business but also contribute to everyone's salary and revenues.

In today's economy, one needs to understand how tough it is to sell. HR needs to comprehend the mental and physical pressure on the sales force. It's a proven fact that salespeople are the competitive advantage of any organization striving to stay ahead of the pack. If a salesperson is not performing, it's not necessarily entirely his fault. As Mr. Garg mentioned, if he successfully passed various rounds of interviews and assessments, it means he has the caliber. If he is a manager, it indicates a proven track record of his previous jobs and performances. Then why is he not performing here?

When salespeople underperform, we repeatedly warn them, creating a negative environment around them that permeates the organization, and in the end, we blame the salespeople again.

We need to develop better individuals to build better businesses. If someone is not performing or not even making an effort to perform, one must engage in a conversation with them and create a positive environment. A healthy mind leads to a healthy business.

It's easy to create policies and procedures for hiring, measuring performance, and terminating employees, but it's all about people.

Let's strive to cultivate better individuals.

Regards,
Rumao James

Respected Neha,

With all due respect, I would like to recommend one thing. As an HR professional, strive to develop better individuals. Your organization is indeed compensating him, but I believe that within the organization, all must function as a team and exhibit teamwork. When a team member faces challenges, it is our moral duty and responsibility to assist them without any negativity towards them, as we are all learners in some aspect.

Success happens when preparation and opportunity meet.

Original Quote: "Luck is what happens when preparation meets opportunity." - Lucius Annaeus Seneca.

Regards,
RJ

It is not the right solution to retain the salary. Definitely, the management should have reviewed his caliber before appointing him for a high salary. He should be given the opportunity to improve by providing necessary resources and knowledge.

I think you should give him some time to adjust in the culture. Maybe he has some personal issues which are troubling him and affecting his performance. Even though the market is still not doing well, and because of his poor rapport with others, they are not trusting him to bring in business. Try to gather his complete information before penalizing him like this. I know you are not running a charitable trust, but once you discover, then he might be the best performer you have ever had. Otherwise, take it in writing. If he is unable to reach targets, which are realistic, then he will resign. I think that's the best way to get this organized, not by retaining half of his monthly salary.

Ensure there is a single line break between paragraphs.

Dear Jyoti,

First of all, it's very unfortunate that the sales manager's performance has been subpar. What is even more concerning is that the organization has not paid the agreed-upon salary to the sales manager. Retaining his salary is both unethical and illegal. Please release all his outstanding dues and have a discussion with him about improving his performance within a specific timeframe. If the sales manager fails to meet the performance expectations within the agreed timeframe, the company reserves the right to terminate his services.

Dear All,

Thank you for your advice. As I mentioned before, I sent him an email about his short-term targets and asked him to achieve them. I believe he took the feedback positively and has been working hard since last week. It seems that the approach of putting things in writing has been effective and maintaining trust in employees to perform is key.

Regards

There is only one option - Give him the pink slip. A nonperforming sales manager is a liability to any organization. They can, over a period of time, affect the cash flow of the company and can impact the lives of all other employees in the company. Bid goodbye to him immediately.

Vivek Hattangadi

Dear HR/Admin Professional,

Non-performance is an outcome by itself. However, may I submit the following observations, although some may be repetitive:

1) The fact that he worked for a very good company proves that he is basically a good worker/professional.
2) If the earlier company has retained him for at least more than one year, then he is just fine.
3) You may want to take him into confidence... communication is the key.
4) Maybe he wants an initiation of this process from the management's side.
5) A compulsion on his part... in fact, his team (of subordinates) structure may have to be reviewed. It's like he is given the Bangladesh Cricket team and expected to beat a side like Australia.
6) There may be some issues, especially with regard to performance, commitment, and team spirit, on the part of his subordinates as well.
7) In the earlier organization that he worked in, the level of commitment and other factors may have been relatively better due to the overall company's structure, environment, salaries, and benefits, such that they comfortably went about doing their job with minimal supervision. He may be paid a high salary by your standards, but what about his current team?
8) If he has joined you on a promotion, where the scale of operations and the size of the team are something that he is finding difficult to handle, you or your senior management team may want to communicate face-to-face threadbare; that's the only way to go about it.
9) If there are more variables/factors, then you may want to give him/her a timeframe mutually agreed upon.
10) Hopefully, this works out well... if not, then you have no choice but to bid him a good-bye.
11) At the end of this exercise, you will be wiser... having communicated very clearly with him. Next time you recruit someone, you are wiser still... the organization will continue to pay him until then, but you as a person and professional, and as a professionally managed company, would have cleared issues at your end, although it will cost you.
12) This will go a long way in creating very positive working conditions where empathy is the key... and at the same time being firm with your HR policy.

Please let me know if you need any further assistance.

Let's solve this problem. By simply using punishment, you will not be able to change behavior at all. Remember, your sales manager is under pressure as his salary is retained. Instead, let's look at a few of the areas you can work on:

1. Have you done a gap analysis? What areas does he need to improve?
2. Communicate with him about the areas that need improvement.
3. Get one of your best sellers to accompany him in the field.
4. Put him on a performance improvement program.
5. It normally takes 3 months for a person to show improvement if he is genuinely interested in improving performance.
6. To avoid any labor dispute, do the following things.

Let's solve this problem.

By simply using punishment, you will not be able to change behavior at all. Remember, your sales manager is under pressure as his salary is retained. Instead, let's look at a few of the areas you can work on:

1. Have you done a gap analysis? What areas does he need to improve?
2. Communicate with him about the areas that need improvement.
3. Get one of your best sellers to accompany him in the field.
4. Put him on a performance improvement program.
5. It normally takes three months for a person to show improvement if he is genuinely interested in improving his performance.
6. To avoid any labor dispute, do the following things:
a) Please give him a memo on his performance and set a final date for expected improvement, and make him sign it.
b) Get his commitment and also inform him that there will be periodic reviews, maybe once a month. Let him set an improvement result deadline.
c) In case he is still not improving, terminate him.

This way, you could either improve him or get rid of him as per the rules.

Hi Jyoti,

I agree the problem you are facing seems child's play to solve, but actually, it is not that easy. Please check out the following points:

1) Don'ts - You cannot hold the salary of an employee; you cannot take any such action for the reason you mentioned that he is from a very good company with experience. This means he might be clear on many legal aspects. In case you take a chance, he definitely will not hesitate to waste your precious time and money to warn you with legal issues or court stays. So better don't take a chance.

2) Dos - a) Performance appraisal - prepare a report and send a copy to management and discuss the exact problems he is facing in his work. For example, if he is not able to develop good relationships with customers, then training can work and leave no excuse with him. You can ask a good performer of yours to assist him in the field and introduce him. If the person accompanying him is younger or junior to him, this will create a need in him to perform better with his own hard work as this will be a challenge for him and a question on his performance.

If things work well enough, he will quit without raising any problems for you.

For further hirings in the future, please check out these points:

1) Don't ever get attracted towards the company a person is coming from; rather check out his performance.

2) Getting selected in a big company is not enough; what's important is how he performed.

3) Keep every person, especially marketing and sales force, in a probation period varying from 4-6 months and keep a clause that it may exceed to 4 months, and the authority lies with management in case they are not satisfied with performance. This will increase confidence and trust of the employee in the company as they will not simply be fired but given a chance to prove themselves, which you can consider from a motivational aspect.

4) Keep a termination clause in the offer letter, as being in the probation period, the company reserves the right to terminate his services with a 1-day notice, and the decision will be final and unquestionable.

For any further queries, please email me at [Login to view].

Hi! I am from AP State Govt. Now I am retired. There are two/three options:

1. Record his performance regularly. Keep him informed of his achievements vis-a-vis the targets. This is important for any future course of action.
2. As it's indicated, he is coming from a good company, check whether he has any problems in the field/family (a sort of counseling by an expert from our Personnel Department).
3. Without affording any opportunity, we cannot stop his salary (whether partly or fully).
4. After all of our efforts to remedy the situation, the last step is to show him his place! This is very easy to my knowledge in a Private/Corporate Company.

R.S. Shastry

Something that always works for me is to engage with the salesperson on a personal level. If the salesperson is married, express your interest in visiting their home to have tea with both them and their spouse. During this visit, discuss the performance expectations and inquire about how they would like their spouse to perceive them - as a winner or a loser.

In my experience, fostering a connection beyond the professional setting can greatly impact performance positively. However, it is essential to ensure there are no underlying issues in the leadership dynamic between the salesperson and their immediate supervisor for this approach to be effective.

I believe that implementing this strategy could lead to a significant improvement in performance within seven days. Once you have tried this approach, please update me on the results. Your feedback is valuable.

Regards,
Vikas Rao (aka raoglobal)

Hi friend,

I think he lacks motivation. Since you already cut his pay, why not give him more responsibility and allow him to handle things independently so that he might get back on track.

Thanks,
Vijaya

Hi Neha and Jyoti,

Kindly let me know whether you recruited these poorly performing employees from a similar industry or from a different industry. If they are not from your similar industries, they may not have sufficient knowledge about your systems, procedures, and mainly about your product.

- Give them a special induction.
- If necessary, organize training programs like selling skills, negotiation training, etc.

Based on my knowledge, cutting down the salary will demotivate the employees and will not support further performance.

For further information, please contact.

BR Pratheep
9894276231

You can design an IP (Improvement Plan) for him along with his manager. Design it in such a way that outlines where the employee needs to improve and what tasks the employee has to undertake. Have a discussion on this, get it signed by both the manager and the employee, and conduct 3-5 reviews with all three parties involved.

Include a statement in the template that states, "If there is no progression, it may lead to termination."

Surely, he will improve. Hope this sheds some light.