How to Manage an Underperformer

There are three areas in which managers constantly struggle. One area is deciding who to hire and where to find good talent. The second is deciding who to invest the time in turning around. And the third is determining who to let go and when to do it. These are the tasks that managers complain about the most.

When it comes to making these decisions about their employees, managers most often ask me the following questions, the questions that keep them up at night:

1. "I'm not getting the production I need from my team, even when I continually push them. How do you turn an underperformer into a top producer or at least into an average, acceptable producer?"
2. "When does it make sense to invest your time, money, and resources into someone who you feel you can turn around?"
3. "How can I determine (with great certainty), based on a defined set of criteria, benchmarks, and measurable steps, when to cut the proverbial cord and let someone go?"

During a coaching workshop, on the first day of a weeklong conference, someone asked a question about how to handle an underperformer. While this manager was sharing in great detail the challenges she was having with a salesperson she hired several months ago, I noticed an interesting reaction from the audience. I glanced out at a sea of people, their heads nodding up and down in agreement, as if she was sharing not just her story but everyone's story.

She talked of an experience that practically every manager and business owner in the room was able to relate to: an all too familiar tale of a new, promising hire with incredible potential who wasn't working out.

Everyone has a story about an underperformer. This manager's story continued about a candidate with a wonderful resume, great background, stellar references, and a seemingly positive attitude and disposition. A candidate who was given the opportunity to work with her. A candidate whom she felt had the potential to live up to her expectations. A candidate whose experience seemed to be a perfect complement to this new sales position.

I listened intently as she described this experience. Her once positive level of exuberance, her hopes and dreams, evaporated before our eyes, as she painfully explained how this promising young superstar became one of her biggest disappointments, frustrations, and expenses. And it wasn’t as if she just called it quits after a few weeks and fired this person. Like most managers, she invested precious time trying to turn the person around. The more she invested in supporting and training this person, the more her expectations were shattered.

This manager was stuck. She didn't know what to do. At this point, this new hire was costing her money, time, selling opportunities, and resources every day. This manager completed her story, sounding as drained as if she and the rest of the audience were reliving their personal staffing nightmares, touching what seemed to be an open wound that simply would not heal. With what sounded like a desperate cry for help, she concluded with something I hear quite regularly, "Keith, what should I do?"

The room was silent. All the managers and business owners were gripping the edges of their seats, waiting, anticipating a magnificent piece of brilliance, a solution to this common and painfully eternal dilemma.

My response was, "Do not be seduced by the ether of potential."

The Seduction Begins: The Ether of Potential

Yes, we are often seduced by the potential that we believe we see in others. We see potential in the people, as well as in the opportunities, all around us. We recognize the untapped potential in people who we have a vested interest in: our children, spouse, coworkers, partner, supervisor, and, of course, our staff. We see potential in our new hires as well as the untapped potential in the veterans on our team.

We believe that sometimes, if we wait, if we're patient, if we give them just a little more time, more resources, better training, more attention, they can finally live up to their potential. We believe our employees when they tell us, "Just give me a few more weeks. I'm about to close in on two big sales. Yes, I know my performance has slipped, but as I told you, those personal problems that have been distracting me are no longer there."

We think, "OK, if they really could turn it around that would make my life so much easier. After all, it sure beats the painful and time-consuming process of having to recruit someone new, let alone having to figure out how to cover a territory with no salesperson!"

This belief is counterintuitive. Ironically, it costs you more to keep someone like this on your team. More time, more lost sales, more money and resources, more lost selling opportunities, more conflict, more internal problems. Then you have less time to focus on growing your business and on the people who are performing: the people who make you look great, who are coachable, and who want to truly live their potential today.

And that's when it happens. The seduction begins. Now you begin making decisions based on your emotions, feelings, hopes, and unrealistic scenarios rather than on the facts and what is best for you, the company, and the person in question.

The seduction of potential clouds your better judgment. If you’re looking for evidence of this conundrum, just glance over at the people on your team today. Think about the people you have hired in the past who did not work out. How many people can you think of who you hired when in your heart there was a warning sign, something telling you that this person was not the right fit? Call it your gut reaction, your instincts, or intuition. Your internal barometer was desperately trying to tell you something and you chose not to listen.

The Hard Cost of Complacency

How many times have you been in a situation with an underperforming employee when every week you convinced yourself and others, "Just one more week. He'll turn it around. I know he can do it. If he just follows the program. Just let him get through this next project. I hope he brings in some new business soon." I refer to this type of behavior as Mother Teresa Syndrome. Signs that you might be suffering from this condition would also show up in your internal dialogue. "I can save him. Just a little more time. And I will sacrifice more and more in order to do so."

We often hire people based on their potential rather than on what they have truly and measurably achieved. As such, we try to develop the potential we see in them. After all, the goal of management is to make your people more valuable. The key here is investing your time in making the right people more valuable. Otherwise, it’s a time-consuming and exhausting exercise in futility.

You continue this internal battle, as you struggle to come up with the right decision. "If he stays, maybe he will turn it around. If I fire him, then what do I do? I have to start the recruiting and training process all over again. What if I fire him and he goes to work for the competition and becomes a superstar? Let's just wait and see what happens tomorrow."

Creating extreme scenarios, relying on costly assumptions, and making decisions that are fueled by hope, fear, and consequence still keeps you from recognizing the truth. The truth is, as human beings we have a tendency to lie to ourselves and then believe our own lies.

You Can’t Build a Business on Potential

There is no potential in terms of how you currently define it or embrace it in your life. The way managers rely on potential is more of a smokescreen, a diversionary tactic, an attachment to a certain outcome, a rationalization for their salespeople's performance, a justification for their own behavior or for doing something they want to do, or an excuse not to take certain actions.

You don't hire people based on their potential. Here’s a more vivid and beneficial definition of potential. Potential is based on something that you have not seen yet or have evidence to support. Potential resides in the future, fueled by your own personal expectations. Besides, if you are attempting to make hiring decisions based on people's potential and the candidates haven’t been living their potential by the time you meet them, what makes you think they are going to start living it when you hire them?

Either people strive to live their potential each day or they don't. It's that simple. It's management's responsibility to ensure each person on their team has the systems, tools, resources, training, and coaching that allows them to live their potential every day.

Besides, if you don't know whether you have made the right hiring decision within the first 30 to 60 days, you are in deep trouble. If you think giving the new hire one more chance, more time, or more training is the answer, it is not. This is a lie, a justification, and a story that you're telling yourself. Eventually the pain of keeping that person around will become so evident that the person either quits or gets fired. Consequently, you as the manager have surrendered all of your power to act by choice and instead are now in a state of reaction and in dire need of a new candidate. Inadvertently, you have put yourself in the dangerous position of having to hire a new person out of desperation.

If you and your staff are not currently using and leveraging your talents every day, none of you are living your potential. It’s not that you cannot improve. The difference between working off of potential and lifelong improvement or building a high-performance, collaborative team of self-motivated people is this: With potential, you're looking for something that you have not seen yet nor have evidence for. With lifelong improvement, you're working with a known quantity and have the empirical evidence (possibly from past experiences) that supports your belief that turning this person around is truly possible. You have the verification and evidence that the situation can be made better.

The real problem is that managers wind up collapsing potential with possibility. So what truly seduces you is the potential of possibility.

What's missing for managers is certainty. It's the uncertainty, the unknown, the fear that paralyzes managers who have to make the decision whether to terminate someone or invest the time in turning them around. Managers rely more on their fear-based gut reactions than on the facts.

Having certainty and confidence in their people supported by evidence is a healthier, more productive model when creating new possibilities. This is what I refer to as authentic human potential. The certainty comes from having an executive sales coaching program. Once you have a structured coaching program that holds people accountable on a daily and weekly basis, you no longer have to make the decision to keep them or terminate them. Now underperformers will make that decision for you, based on the defined set of criteria and measurable action steps they need to take to demonstrate their commitment to their position and to dramatically improve their performance. If you are responsible for hiring, developing, and managing a team, what process do you have in place to leverage their strengths from the time of hire through their first 30, 60, 90, even 120 days in their new positions? Would having a 30-Day New Hire Orientation Program for every new hire based on measurable productivity steps and objectives help you and your team? Wouldn't this simplify your life dramatically? Now that you have a proven process documented, either the new hire is sticking by the program and achieving the expected results or not. At this point, there's no room for you to be seduced by the potential of possibility. There's no probation or waiting for the year-end performance appraisals.

You can now run your business or manage your team with greater efficiency. Once these processes are in place, you’ll be able to get back to doing what every manager is destined to do in the first place: make your talented people more valuable.

Keith Rosen is an executive sales coach, speaker, and best-selling author of many books, including Coaching Salespeople into Sales Champions. He was named one of the five most respected and influential executive coaches in the country by Inc. magazine and Fast Company. He can be contacted at 516-771-1444, info@profitbuilders.com, or his Web site.