Performance Improvement Plans (PIP): A solution for Sales Reps

A performance improvement plan (PIP) is a structured plan designed to help employees improve their performance when they are not meeting expectations. In sales, PIPs are crucial for aligning individual efforts with company goals and ensuring sales teams hit their targets and quotas.

Many companies see PIPs as a last chance before termination, but when done right, they actually help employees succeed. Instead of being a punishment, PIPs should be a motivational tool that provides sales reps with the resources and guidance needed to improve their sales performance.

This guide will explain what PIPs are, how to create an effective plan, and how they connect to sales compensation and incentives.

What Is a Performance Improvement Plan (PIP)?

A performance improvement plan is a formal document that outlines the areas where a salesperson needs improvement. It includes clear goals, action steps, and a timeline to track progress.

Key Elements of an Effective PIP for Sales Teams 

A good PIP should:

• Clearly define the performance issues.
• Set achievable, relevant, and time-bound goals.
• Provide resources, training, and mentorship.
• Outline a reasonable timeframe (typically 30, 60, or 90 days).
• Include regular check-ins to measure progress.

By following these steps, sales managers and employees can work together to improve performance and boost motivation.

Gallup research shows that companies with engaged employees have 14 engaged workers for every 1 disengaged worker—six times the national average. This highlights the need for strong performance management, including PIPs, to keep employees motivated and productive.

Step-by-Step Guide to Implementing a Sales PIP

1. Identify Performance Gaps

Sales managers should use performance data to spot areas where a salesperson falls short. Look at quota attainment, sales numbers, and conversion rates.

2. Develop the PIP Document

The PIP process should be documented with:

• Goals (e.g., Increase lead conversion from 15% to 25% in 60 days).
• Action steps (e.g., Attend advanced sales training, implement new strategies).
• Resources (e.g., Sales coaching, training materials, mentorship).
• Timeline (e.g., 30, 60, or 90 days).
• Review schedule (e.g., Weekly check-ins with the sales manager).

3. Communicate Expectations Clearly

The manager and employee should discuss:

• Why the PIP is needed.
• What success looks like.
• Consequences of not improving.

Clarity is key—employees must understand the plan and be committed to improving their performance.

4. Offer Support and Training

A PIP should include tools to help employees improve, such as:

• Sales coaching and mentorship.
• Product knowledge training.
• Technology and automation tools to improve sales processes.

Using real-time tracking tools like Remuner can help monitor progress and ensure transparency.

5. Monitor Progress and Adjust If Needed

Regular performance reviews ensure employees are on track. Sales managers should check in frequently to offer feedback and adjust the plan if necessary.

Examples of Performance Improvement Plans in Sales

Example 1: Increasing Lead Conversion

• Issue: The salesperson has a 15% lead conversion rate, below the company’s 25% target.
• Plan:
  • Attend sales training focused on conversion techniques.
  • Shadow a top-performing rep for 30 days.
  • Practice new strategies in live sales calls.
  • Weekly check-ins to review progress.

Example 2: Improving Product Knowledge

• Issue: The salesperson struggles to answer client questions, leading to lost deals.
• Plan:
  • Complete product training sessions within 30 days.
  • Pass a product knowledge test with 90% accuracy.
  • Join mock sales calls with experienced reps.

Each PIP process should be tailored to the salesperson’s specific challenges.

How PIPs Connect to Sales Compensation and Incentives

Aligning PIPs with sales incentives and compensation ensures sales reps stay motivated.

Benefits of Aligning PIPs with Compensation

✅ Motivation – Reps work harder when PIPs directly impact earnings.
✅ Fairness – PIPs ensure performance reviews are based on data, not bias.
✅ Talent Retention – Employees feel supported instead of punished, reducing turnover.

Companies should use OTE (on-target earnings) and commission structures to reward employees for improving performance. By tying PIPs to sales incentives, companies can motivate reps to achieve their sales quotas and boost overall team performance.

How does employee engagement change after implementing a PIP

The impact of Performance Improvement Plans (PIPs) on employee engagement can vary, but when implemented effectively, they can lead to significant positive changes:

1. Organizations that effectively implement PIPs report a 30% increase in employee engagement
2. Companies with high employee engagement resulting from performance management strategies experience 21% greater profitability
3. A mid-sized tech firm saw employee engagement scores increase by 33% within six months of introducing tailored PIPs
4. Successful implementation of key performance management strategies, including PIPs, can lead to a 14% increase in engagement

However, it’s important to note that PIPs can also have negative effects on engagement if not handled properly:

1. 60% of employees surveyed felt anxious when placed on performance plans, which can potentially decrease engagement
2. Approximately 40% of employees placed on PIPs felt unsupported by their managers, leading to decreased morale and engagement
3. 42% of employees indicated they felt less loyal to their employer after being placed on a performance improvement plan

By implementing these strategies, companies can foster a culture of continuous improvement and accountability, leading to increased employee engagement and overall organizational success.

How to Use Technology for PIP Tracking

Using a performance tracking system like Remuner helps businesses:

• Monitor real-time sales performance.
• Track quota progress.
• Ensure fair commission adjustments.

Sales teams using automated compensation tools improve their PIP success rates by 20%. 

Top Mistakes to Avoid When Creating a PIP

1. Unclear Goals – Vague plans confuse employees.
   ✅ Solution: Set specific, measurable targets.
2. Lack of Support – Employees can’t improve without resources.
   ✅ Solution: Provide training and mentorship.
3. PIP = Punishment – Employees may think a PIP means they’re getting fired.
   ✅ Solution: Frame PIPs as growth opportunities.
4. No Follow-Ups – PIPs fail when managers don’t check progress.
   ✅ Solution: Schedule weekly reviews to track improvements.

Avoiding these mistakes will make PIPs more effective and ensure employees stay engaged.

Final Thoughts: How PIPs Drive Sales Team Success 

A performance improvement plan should not be a punishment—it should be a roadmap for success. By aligning PIPs with compensation, quota targets, and sales incentives, companies motivate employees and boost performance.

For companies looking to track performance, manage quotas, and automate compensation, Remuner offers a real-time solution. Learn how Remuner can help your sales team improve today.

FAQs About Performance Improvement Plans

What is the purpose of a performance improvement plan?

A PIP process helps employees fix performance issues and meet sales targets. It provides clear goals and action steps to help them succeed.

How long does a PIP last?

Most performance improvement plans last 30, 60, or 90 days, depending on the situation.

Are PIPs only for employees about to be fired?

No. Effective PIPs are designed to help employees improve—not just as a step before termination.

What happens if a salesperson doesn’t improve?

If the employee doesn’t meet their goals, the company may:

• Extend the PIP timeframe.
• Offer more training.
• Consider other disciplinary actions.

How can companies track PIP progress effectively?

Using sales performance software like Remuner helps businesses track progress in real time, ensuring fair and accurate assessments.