Sales is a high-pressure environment. There’s a constant need for sales representatives to close more deals, bring in more customers, and contribute to the success of the business by increasing the company’s revenue. 

Sometimes, when a sales rep isn’t hitting their quota or meeting other sales performance expectations, companies put the struggling salesperson on a performance improvement plan. Commonly referred to as a PIP, a performance improvement plan aims to bring a rep’s performance back to an acceptable level. 

From an employer’s perspective, sales PIPs are a way of motivating underperforming sales reps by providing a clear set of expectations and an ultimatum. 

From an employee’s perspective, PIPs aren’t so positive. Some people believe PIPs to be intentionally impossible to pass. Failing one gives the company an easy excuse to fire an underperforming employee.

But that’s just scratching the surface. In this article, we’ll take an in-depth look at:

  • What is a sales performance improvement plan?
  • When do you need a sales PIP?
  • Key elements of a performance improvement plan
  • Creating a performance improvement plan
  • Sales PIP templates
  • Implementing a performance improvement plan
  • Pros and cons of sales PIPs
  • Sales enablement’s viewpoint

Let’s get started. 👇

What is a sales performance improvement plan?

A sales performance improvement plan is a tool sales managers use to tell a sales rep they’ve been performaning significantly below expectations. The PIP also relays set targets that the employee needs to reach in order to remain in the role.  

Generally, a sales PIP outlines: 

  • Evidence towards how the rep has been underperforming compared to expectations,
  • Where the sales rep's performance needs to get to
  • What timeframe this should happen in
  • The resources the company will provide in order to support this improvement. 

However, as mentioned above, PIPs have strong negative connotations. They’re even jokingly referred to as “Paid Interview Periods”, with some believing that once you’ve been put on a performance improvement plan, your time at the company is already up, and you might as well start searching for your next role. 

As a result, the phrase “performance improvement plan” or “PIP” can instill fear or intimidation in a sales rep, and it’s important to be tactful when approaching a situation that may require one. 

In organizations with a positive culture of growth and employee development, PIPs can be genuine efforts to uplift struggling employees. They can give reps an opportunity to showcase that they can be productive members of the team with proper guidance, and improve sales performance - and that’s what this article will focus on. 

When do you need a sales performance improvement plan?

A sales performance improvement plan is needed when a sales rep’s consistent underperformance has been highlighted by a manager or team member, and is backed up by qualitative and (in particular) quantitative data and performance metrics. 

Qualitatively, feedback from a peer on the team or a manager might indicate that a rep is struggling and in need of a PIP to boost performance. Perhaps you as an enablement professional have observed this need yourself during training or coaching sessions. This can prompt you to take a closer look at the quantitative data. 

You can find quantitative evidence of underperformance by analyzing a sales rep’s KPIs and metrics. Consistently missing quota by a large margin, having a notably poor conversion rate compared to the rest of the team, and low numbers of calls made are just some examples of  metrics that can point to a rep’s struggles. 

It’s important that you don’t spring a PIP onto a rep unexpectedly. You should try other means to support and empower the rep first, and have clear, objective guidelines for what constitutes poor enough performance to qualify for a performance improvement plan even before the PIP is needed. 

That way, everyone is on the same page and the PIP doesn’t end up being a nasty surprise for the rep on the receiving end. 

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The reality is that PIPs are an ineffective way of managing people out. Everyone (at least in the US) is "employed at will" and can be fired anytime for any reason that isn't protected, such as not hitting your number for the quarter or year.

The companies that get it, will let go of bottom talent quickly - giving them a competitive edge against other companies that use PIPs to retain bad talent longer.

- SEC Slack member Thomas

Key elements of a sales performance improvement plan

The most important element of any sales PIP is clarity. As they hold a reputation for being “last chances”, PIPs cannot have any ambiguity in their terms. This way, not only does the sales rep have the best chance of success, but they actually know what success means over the course of the PIP’s time frame. 

A good place to start is the age-old SMART goals template. Your PIP should be:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-bound

What might this look like for a sales rep seriously struggling to convert leads into deals? Their PIP might outline that they need to improve their lead-to-conversion rate by 25%, bringing them to within 10% of the rest of the team’s average, in the next 90 days. 

This example is specific and measurable, as it provides the exact number the rep needs to aim for. A vague “improve conversion rates” goal doesn’t fit the SMART criteria, as it isn’t specific enough to track. 

The example is also achievable. It’s not asking the rep to become an A+ performer overnight, rather to just get in line with the rest of the team over the course of three months - in essence, improving their performance to close the performance gap to their peers. 

In addition to these SMART elements, your PIP should include a support framework for the rep. This includes the resources, training, and coaching available to them to help them achieve this goal, regularly scheduled progress check-ins, and anything else the rep might need over the course of the PIP in order to give them the best chance of success. 

Lastly, as we mentioned earlier, the PIP should also highlight the performance deficits of the rep, clearly demonstrate where they’ve fallen short, and why they need to improve. Otherwise, this lack of clarity can make the process feel unfair or unjust. 

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I've used them and seen them used as a reliable tool for helping reps snap into action. Broadly speaking, a PIP:

1. Needs to be communicated before the rep even signs the offer to join the team
2. Needs to be based on objective criteria and applied equally for all who do the same job
3. Needs to be reported on to reps individually on a monthly basis so reps know where they stand at all times
4. Needs to take the IP seriously with serious efforts to help reps get on track
5. Needs to be non-negotiable if reps still don't make it

- SEC Slack member Matt

How long should a sales PIP last?

Generally speaking, sales performance improvement plans are short-term processes, lasting between 30 days and 90 days in most organizations. 

This is because they’re used as a final effort to turn around a sales rep’s poor performance after an extended period of bad results. This means the sales rep has already been around for some time, and if their results don’t improve, it will become detrimental to the business. 

Overall it’s rare to see a sales PIP last more than 90 days. 

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It’s a thing of anxiety that once you are on a PIP (which usually doesn’t actually have plans for improvement) you do worse at your job - positive reinforcement always works better.

- SEC Slack member Jennifer

Creating a sales performance improvement plan

Discussing the sales performance improvement plan with a sales rep is all well and good, but with so much important information involved, it’s critical to create a sales PIP document that every party can refer back to. It should contain all the details you’ve discussed for reference purposes. 

This can act as the single source of truth for everything PIP-related, and act as a point of reference for the sales manager and the sales rep in question. 

Remember to include all the key elements:

  • Why you’ve put the PIP in place (with quantitative examples)
  • The SMART goals the rep needs to aim for
  • The resources available to the rep
  • Timelines and check-in dates
  • Anything else you’ve discussed with the rep regarding the PIP

Sales PIP template

To get you started, you can use Sales Enablement Collective’s own simple sales performance improvement plan template. You can then edit the template to meet your exact needs, or just use it as inspiration for your own bespoke one. 

Implementing a sales performance improvement plan

When it comes to implementing a sales performance improvement plan, it goes without saying that you or a manager need to have a serious conversation with the sales rep. PIPs should only be used when there’s a serious, prolonged period of underperformance - therefore, it shouldn’t:

  • Be your first port of call whenever a rep misses their target or underperforms
  • Be used to surprise or shock a rep.  You should have had previous discussions about the need for their performance to improve
  • Be a way to make up an excuse to fire an employee for vague reasons

Overall, as mentioned before, the keys to a well-implemented sales performance improvement plan are structure and clarity.

Your expectations and plans for the sales rep, and the reasons behind these, should be clearly communicated, ideally face-to-face or over a video call, not through messages. The sales rep should have the opportunity to ask any questions, and come out of the call with a full understanding of the upcoming time period. 

After the initial conversation, successful implementation means regular check-ins to monitor progress and assess what’s working and what isn’t, and to get on top of any potential blockers before they cause issues later on.

Ideally, the PIP shouldn’t be a punishment for poor performance, but rather used to encourage growth and give a sales rep a final opportunity to get back on track. So be sure to highlight wins when they happen to increase the rep’s motivation throughout the process. 

Pros and cons of sales performance improvement plans

There are mixed opinions on the effectiveness of PIPs in the workforce, especially when it comes to sales. Before implementing PIPs into your processes as a sales organization, it’s important to weigh up the pros and cons associated with them, and then make the call on whether they’re the right tool for you to use. 

Pros

Cons

Can act as a last resort to ‘kickstart’ a sales rep into gear

Have a bad reputation as ‘excuses’ to fire sales reps

If used and communicated correctly, doesn’t have to be associated with the traditional ‘fear’ that PIPs can elicit 

This bad reputation and the pressure associated with PIPs can cause reps anxiety, which can hinder performance rather than enhance it

Gives sales reps a chance to turn around their underperformance

‘Shocking’ or ‘threatening’ an employee into performing better may not be an effective way to improve performance

Can provide clarity and transparency on underperformance and what will happen if that doesn’t change

It may be better to just let an underperforming rep go and replace them, rather than trying to ‘fix’ long-term poor performance 

If you want to join in on the discussion and give your two cents on the pros and cons of PIPs (or countless other topics), be sure to join our thriving Slack community - join your peers, learn from their experiences, and share your knowledge. 

Sales enablement and performance improvement plans

While sales enablement won’t directly be involved with a sales rep’s performance improvement plan (they’re usually kept private between the manager and rep), what enablement can do is ensure that:

  • Underperforming reps have easy access to any sales content, training, or coaching they want to proactively use to improve skill gaps and knowledge deficits
  • Managers know the full breadth of resources available to their team and can recommend them to reps when appropriate
  • The enablement team is ready to recognize trends in team underperformance and design programs and sessions to help the sales team overcome sales challenges before they become bigger issues
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From an enablement standpoint, I’d say that the support needed to help the rep succeed can definitely come from the sales enablement team.

Depending on the area of improvement (product knowledge, sales skills, behavioral), sales enablement can support the manager with the training plans needed to bridge the gap between a current and future state.

All good and effective PIP plans usually include a re-training component and I believe that’s where the enablement team can support a manager (not directly of course, as PIP discussions are confidential, but more as a consultative resource on what is available and how it can be structured/organized to meet the needs of the rep).

- SEC Slack member Neha

Closing thoughts on sales performance improvement plans

Sales performance improvement plans have a bad reputation as being an ‘easy’ way to get rid of a rep who falls short or fails to meet expectations or sales goals. 

However, in organizations with positive cultures of growth and good attitudes towards coaching and sales rep improvement, they can sometimes be an effective tool in getting an underperforming rep to reach the standards of the rest of the team. 

It’s important to acknowledge and understand the stigma surrounding PIPs to be able to implement them effectively for your organization’s sales team - remember that each PIP should use SMART goals and leave no ambiguity, to make the situation work out in the best way possible for everyone involved.