In Defense of the PIP: 6 Steps to Develop Effective Performance Improvement Plans The Wall Street Journal recently ran a column entitled “The Most Hated Way of Firing Someone Is More Popular Than Ever. It’s the Age of the PIP,” arguing that using a performance improvement plan (PIP) is the worst way to fire an underperforming employee. But don’t believe everything you read. The PIP remains a most useful tool for employers. Done properly, it advises the employee where work performance is not meeting expectations and gives them time to improve performance – while creating a valuable record for the employer. This Insight will review the benefits of the PIP and provide you six steps to take to ensure you are getting the most out of one. PIPs Remain Better Than the Alternative – And Remain Valuable Tools Despite the WSJ column stating that PIPs have little value, it is difficult to imagine that issuing a PIP is worse than simply firing an unperforming employee out of the blue without any prior warning. But then again, they must be carefully crafted in order to provide value to both the employee and the employer. A PIP must be fair, specific in identifying shortcomings, and provide a reasonable chance for the employee to improve. While the WSJ authors’ column includes statistics showing that most employees who receive PIPs ultimately are terminated, that does not mean that PIPs are unwarranted. Just the opposite. An employer has the right to hold its employees accountable to meeting performance standards, and PIPs are the fairest means of doing so. The WSJ authors also suggest that PIPs are “used primarily to provide legal cover from employment lawsuits.” This is certainly true. Employment lawsuits are ubiquitous across the country. Many judges and jurors expect an employer not just to show that they did not violate the law, but also to show that they did the right thing by the employee. Terminated employees often dispute verbal warnings and coaching sessions when they file a lawsuit, and courts – and juries – often agree with the old saying: “If it’s not in writing it didn’t happen.” A PIP is written evidence that an employee received a fair warning before dismissal. Conversely, a PIP might result in improvement of the employee’s performance, avoiding the risk and disruption of terminating the employee – not to mention the cost of recruiting and training a replacement. Sometimes managers are not adept at communicating performance expectations to their employees and the PIP might be the first indication to an employee that their performance is unsatisfactory.
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