Love your Underperformers

Poor performers. Losers. Bottom feeders.

Every company has a derogatory term to describe sales people who are in the bottom 20th percentile. Some sales managers openly deride and ridicule their team members who are not meeting expectations.

The human condition responds to motivational “sticks” like ridicule and mockery but only in very short-term bursts. If what you’re looking for is commitment and improvement, try carrots. If what you’re doing isn’t working, maybe you’re focused on the wrong carrot. What does a sales manager do with reps who are underperforming?

 Goals Are Carrots

Sounds crazy, doesn’t it? Why would management let someone in the lowest 20% of the sales organization (who isn’t even close to approaching quota) pick their own goals? As crazy at it sounds, this is what was practiced by the eight companies whose sales data is included in the chart in the left (download file to see the chart). For these firms focused on increasing revenues from their outside sales reps, we split each sales organization into five equal segments, or quintiles. This allowed us to measure them separately and use relevant goals for each group. Our analysis included Fortune 1000 firms in telco, manufacturing, pharmaceutical and medical devices.

 Each ran a “select-your-own-goal” sales incentive for 90 days with payouts indexed to participants’ salaries. As expected, the top performers performed well. They had the highest incremental gain in real dollars. However, the rate of the lowest performers – Quintile 5 – was double (31.7%) that of the top performers (17.9%) and the gain in real dollars exceeded that of Quintiles 4, 3 and 2.