How to Manage an Underperforming Salesperson in Ontario (Before You Reach for the Termination Letter)
A founder called me a while back, and the first sentence out of hismouth was, “I need to let my rep go by Friday.” Not “how do I turn thisaround,” not “what have we actually tried.” Just Friday. The rep wasthree quarters into a bad run, the pipeline was thin, and the founderwas done. I understood the feeling. I have wanted to skip to the endtoo, when someone is dragging and the number is on the line and coachingone more time feels like throwing good hours after bad.
Here is the problem with reaching for the termination letter first,and it is the part almost nobody prices in. Knowing how to manage anunderperforming salesperson is not the soft, optional step before thereal decision. It is the step that decides whether the real decision ischeap or expensive, legal or costly, and whether you recover a rep youalready paid to hire and train. Skip it, and in Ontario you do not savetime or money. You buy risk.
This is the assumption that costs Ontario employers the most. Poorperformance, on its own, is almost never “just cause” for dismissalwithout notice.
Under Ontario’s Employment Standards Act and its regulations, anemployee only loses the right to statutory notice or termination pay ifthey are guilty of “wilful misconduct, disobedience or wilful neglect ofduty that is not trivial and has not been condoned by the employer.”Courts have read “wilful” narrowly. It means being bad on purpose, notbeing bad at the job. A rep who is trying and missing isunderperforming. That is not wilful misconduct.
So a salesperson who cannot hit quota is still owed statutory notice,and in most cases common-law reasonable notice on top, which runs inmonths, not weeks. “Poor performance” does not make that bill disappear.It just means you fired someone and still have to pay them out as if youhad let them go without a reason.
That alone should slow the Friday instinct down. But the bigger costis what happens when you try to build a cause case in a hurry.
Employers who realise they cannot fire cleanly often reach for aperformance improvement plan, or PIP, as the paperwork that gets themthere. Used honestly, a PIP is a genuine tool. Used as a countdown to adecision you have already made, it becomes evidence against you.
The clearest Ontario warning is Brake v. PJ-M2R Restaurant Inc. (2016ONSC 1795). A long-tenured McDonald’s manager with strong reviews wasmoved to a struggling location and put on a three-month plan. The courtfound the employer had “set her up to fail.” Her PIP goals wereobjectively harder than the standard she had always been judged by,three months was not enough time, there was no real follow-up, and hernumbers were actually trending up when she was pushed out. The resultwas a finding of constructive dismissal and roughly twenty months’ pay,about $104,000.
The lesson is not “never use a PIP.” It is that a plan built tojustify a firing, with moving targets and no support, does the oppositeof what you wanted. It hands the employee a wrongful-dismissal case anda sympathetic story.
It can get worse than a notice bill. In Boucher v. Wal-Mart CanadaCorp. (2014 ONCA 419), a manager was belittled, humiliated and demeanedin front of coworkers over months, in a campaign designed to make herquit. She did, and the Court of Appeal upheld $200,000 in aggravateddamages and $100,000 in punitive damages against the company, plus$100,000 against the supervisor personally for intentional infliction ofmental suffering and another $10,000 in punitive damages. Aggressive“management” of someone out the door is not a shortcut. It is aliability multiplier, and it can land on the manager as anindividual.
Here is the finding that should change how you run the conversation,not just the paperwork. We assume feedback helps. On average it does,but the effect is smaller and more fragile than any of us wants toadmit, mine included.
The landmark study is Kluger and DeNisi (1996), a meta-analysis of607 effect sizes. Feedback improved performance on average, but morethan a third of feedback interventions actually made performance worse.When feedback attacks the person rather than the task, it pullsattention onto the self, onto ego and threat, and away from the work.That is precisely the register a “you are failing, fix it or else” planlives in.
The follow-up research says the same thing about the plansthemselves. Smither, London and Reilly (2005) found that the performancebump after feedback is small (effect sizes around .15) and dependsalmost entirely on the conditions. It is larger when feedback isdevelopmental rather than punitive, and it only shows up when the personbelieves change is needed, sets real goals, and takes action. A PIPhanded over as a threat meets none of those conditions. So the very toolyou reach for to fix the number can be the thing that sinks it.
Managing underperformance in a sales team well is not softness and itis not paperwork. It is HR leadership and sales leadership at the sametime, and it is the judgment a fractional executive is hired for. Hereis the sequence I would run, built from the research and kept legallycareful.
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Diagnose before you correct. Underperformance in sales hascauses, and firing the person does not fix a broken cause. Is the quotarealistic, is the territory viable, is the comp plan pointed at theright behaviour, is the pipeline being fed, is the ramp period fair? Ifthe system is the problem, no PIP will fix the rep.
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Set specific, fair, attainable targets. Locke and Latham (2002)showed that specific and challenging goals beat vague “do better” goals,but only when they are attainable and the person is committed. “Threequalified opportunities a week and two first meetings” is a target.“Turn it around” is a wish. Match the standard to the one they wereactually hired against, not a harder one you invented to justify theexit (that was the Brake mistake).
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Make the feedback developmental, not personal. Kluger and DeNisiis the whole reason. Talk about the work, the calls, the discovery, thefollow-up, not the person’s worth. Coach the task and you help. Attackthe self and you make it worse.
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Give real support and real time. A plan with no coaching, noride-alongs, no pipeline help and a three-month clock is the thingcourts call a setup. Support is not just decent management. It is theevidence that you gave a genuine chance.
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Document contemporaneously and communicate the stakes plainly.Write down expectations, what support you provided, and where thingslanded, as it happens. If dismissal is a real possibility, the employeehas to know that, in plain words. To establish just cause forperformance an employer generally has to show the standard wasreasonable and communicated, the employee knew failure could meandismissal, and they still could not meet it despite genuine help.Confirm the wording and the process with an Ontario employment lawyerbefore you rely on it.
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Decide honestly at the end. If the rep recovers, you kept someoneyou already paid to find and train. If they do not, you now have aclean, documented, well-supported record, which is exactly what turns anexpensive, contested exit into a defensible one.
Everything on that list is what selection is supposed to prevent inthe first place. Hiring for the right competencies, not just the bestinterview, is how you avoid managing a bad fit later. That is the samejudgment I bring to retained search: get the right person in the seat,and you spend far less time managing the wrong one out of it.
Why this is aleadership problem, not an admin one
Notice what this process is not. It is not a form you download and acountdown you start. It is a diagnosis, a coaching plan, acomp-and-territory review, a legal-risk read, and an honest decision,run by someone with the judgment to hold all of it at once. That is HRleadership fused with sales leadership, and it is the gap most 20 to 500person Ontario companies feel long before they can justify hiring both afull-time VP of Sales and a full-time HR executive.
I am Ashley Wesley, and this is the work I do as a Fractional VP ofSales and HR in Guelph, Ontario. The founder who wanted to fire his repby Friday did not have a firing problem. He had a management-judgmentgap, and once we filled it, two of the three “obvious” terminations onhis list turned out to be fixable. The third was not, but by the time wegot there, the exit was clean, documented and low-risk. That is thedifference between managing performance and reacting to it.
The termination letter will always be there if you need it. It is afar better letter to write when you have earned the right to sendit.
In short
Poor performance is almost never just cause for dismissal in Ontario,so firing an underperforming salesperson without notice does not savemoney, it creates a payout plus legal risk. A rushed or punitiveperformance plan makes it worse: courts treat a “set up to fail” PIP asconstructive dismissal, and abusive management as grounds for largedamages. The research is blunt that badly delivered feedback makesperformance worse, not better. The fix is a genuine, well-run process:diagnose the real cause, set fair and specific targets, coach the taskinstead of attacking the person, give real support and time, document asyou go, and then decide honestly.
Key takeaways
- In Ontario, poor performance is not “wilful misconduct,” so anunderperforming salesperson is still owed statutory and usuallycommon-law notice; firing for underperformance does not avoid the payout(Employment Standards Act, O. Reg. 288/01).
- A performance improvement plan built to justify a decision alreadymade is dangerous: in Brake v. PJ-M2R Restaurant Inc. (2016), a “set upto fail” PIP led to a constructive-dismissal finding and about $104,000in damages.
- Abusive performance management carries its own price: Boucher v.Wal-Mart Canada Corp. (2014 ONCA 419) upheld $200,000 in aggravated and$100,000 in punitive damages against the employer, plus $110,000 againstthe supervisor personally.
- Feedback is not automatically helpful. Kluger and DeNisi (1996)found more than a third of feedback interventions actually decreasedperformance, especially when feedback targeted the person rather thanthe task.
- Performance gains from feedback are small and conditional (Smither,London and Reilly, 2005): they show up only when feedback isdevelopmental, the person believes change is needed, sets specificgoals, and takes action.
- Managing an underperforming salesperson is a leadership judgment(diagnosis, coaching, comp and territory review, legal-risk read, honestdecision), not an administrative form, which is why many Ontario SMBsfill it with fractional HR and sales leadership.
Frequently asked questions
Canyou fire a salesperson for not hitting quota in Ontario?
Missing quota, by itself, is poor performance, not wilful misconduct,so it is almost never just cause for dismissal without notice inOntario. You can end the employment, but the employee is generally owedstatutory notice or termination pay and, in most cases, common-lawreasonable notice as well. Firing for underperformance avoids none ofthat. Confirm your specific situation with an Ontario employmentlawyer.
A PIP is not strictly required by statute, but a documented, fairperformance-management process is what protects you. If you want toargue just cause for poor performance, you generally have to show thestandard was reasonable and communicated, the employee knew failurecould lead to dismissal, and they still could not meet it despitegenuine support. A PIP is the usual way to build that record, as long asit is honest and not a countdown to a decision already made.
Yes. If a PIP sets unreasonable or moving targets, gives no realsupport or time, or is clearly designed to force someone out, an Ontariocourt can treat it as constructive dismissal. That is what happened inBrake v. PJ-M2R Restaurant Inc. (2016), where the employer “set theemployee up to fail” and owed about twenty months’ pay.
There is no fixed number, but the time has to be genuine andproportionate to the role and the person’s tenure. In Brake, threemonths was found inadequate for a twenty-year manager. The point is thatthe employee needs a real opportunity, with support, to meet a fairstandard, not a token window before a predetermined exit.
References
Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 (CanLII). Retrievedfromhttps://www.canlii.org/en/on/onca/doc/2014/2014onca419/2014onca419.html
Brake v. PJ-M2R Restaurant Inc., 2016 ONSC 1795 (CanLII); seeMcMillan LLP case commentary. Retrieved fromhttps://mcmillan.ca/insights/shes-lovin-it-poor-use-of-performance-plan-leads-to-wrongful-dismissal/
Kluger, A. N., & DeNisi, A. (1996). The effects of feedbackinterventions on performance: A historical review, a meta-analysis, anda preliminary feedback intervention theory. Psychological Bulletin,119(2), 254-284. https://doi.org/10.1037/0033-2909.119.2.254
Locke, E. A., & Latham, G. P. (2002). Building a practicallyuseful theory of goal setting and task motivation: A 35-year odyssey.American Psychologist, 57(9), 705-717.https://doi.org/10.1037/0003-066X.57.9.705
Ontario Ministry of Labour. Your guide to the Employment StandardsAct: Termination of employment; O. Reg. 288/01, Termination andSeverance of Employment. Government of Ontario. Retrieved fromhttps://www.ontario.ca/document/your-guide-employment-standards-act-0/termination-employment
Smither, J. W., London, M., & Reilly, R. R. (2005). Doesperformance improve following multisource feedback? A theoretical model,meta-analysis, and review of empirical findings. Personnel Psychology,58(1), 33-66. https://doi.org/10.1111/j.1744-6570.2005.514_1.x
Society for Human Resource Management. Can I terminate an employee inOntario who is underperforming? Retrieved fromhttps://www.shrm.org/topics-tools/employment-law-compliance/can-i-terminate-employee-ontario-who-is-underperforming
Disclaimer: This article provides general HR and businessinformation, not legal advice. Employment law turns on the specificfacts and changes over time. Before acting on anything here, confirm itwith an Ontario employment lawyer.
