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Using discipline in the dealership

July 26, 2004
Filed under Archives

This is the eighth and final portion of a series of articles describing the Four Step Management Process.

At some point, problems may arise that can only be solved through disciplining an employee.
Most managers are one of two types:
1) The nice person who hates to come down on people. Frequently, this person gets taken advantage of by the sales force.
2) The “big bad” sales manager who tries to manage by intimidation. This doesn’t work. Employees won’t stick around for long if they are frequently yelled at or threatened with the loss of their jobs.

BE FAIR AND CONSISTENT
Use common sense to find a middle ground between these two extreme positions. Use a friendly, positive approach to establish that you’re doing this for the salesperson’s own good. Then discuss the situation and appropriate action firmly and directly.
As a sales manager, it’s not your job to be popular — you must be respected. To do that, you have to be fair and consistent. Avoid favoritism. Rewards and discipline should always be based on the act, not the person.
One way to ensure that you’re being fair and consistent is to follow the Counsel, Warn and Act procedure.
Counsel The Salesperson
When an employee commits an infraction for the first time, have a private one-on-one counseling session. Hear them out. Perhaps it was the result of misunderstanding or poor communication.
Warn For The Second Offense
If the infraction is repeated, immediately warn them what will happen following a third offense. Be sure the warning is appropriate. They must understand that the disciplinary action will actually be carried out for the warning to be effective.
Use dealership letterhead to back up the verbal warning in writing. Include their name, the date, a brief description of the offense, the fact that this is a second violation and that it was previously discussed. Sign your name and title and also have the employee sign the document. The original goes to the employee, a copy goes in the employee’s personnel file.
Act Immediately
If a third violation takes place, you must act. You must carry out the warning you gave after the second offense. Do this without delay.

TERMINATION
Terminating an employee is a task that no one likes. Use the following guidelines to make the termination less painful for all concerned.
Termination for Poor Performance
Poor performance is easy to document and justify. You may find the salesperson already realizes they are not cut out for the job.
Termination for Violating Dealership Policies
Proceed with caution when terminating an employee for policy violations. Any situation that warrants termination must be thoroughly investigated. It is advisable to seek legal counsel in these matters.
Arm Yourself with Documentation
You must have clear evidence that an employee should be terminated in order to prevent putting yourself and the dealership in legal jeopardy. You may have to defend your action to a state labor board or in civil court. Seek legal counsel or check with your state labor board to make sure you have done everything according to the book.
Act Quickly
When the reason for termination centers on a major violation of company policy, such as stealing, drug use, etc., you must act quickly. Always discuss with the dealer whether you should get legal counsel before carrying out the termination.
The Termination Procedure

  • The end of the day is considered the appropriate time to carry out the termination procedure.
  • Meet one-on-one and get to the point.
  • Avoid getting personal — don’t get drawn into an argument.
  • Termination should be based on the act, not the person.
  • Make sure that their final check is already prepared.
  • Be prepared to discuss any benefits that are in effect.
  • The employee must return all dealership property before the final check is presented.

    Bear in mind that as tough as this process is for you, it is much tougher on the employee. Respect their dignity. Always try to get through the termination process with as little unpleasantness as possible. psb

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