“We have to talk.” It’s the phrase that’s launched countless uncomfortable conversations, and can be as hard to say as it is to hear—especially if the talk involves the words “performance improvement plan” (PIP).
According to SHRM, a PIP is “a structured plan with time-sensitive goals” that is implemented when an employee’s performance has been suffering for some time. It is HR’s responsibility to determine “whether a PIP is the appropriate action for the situation” and to guide the employee and their manager through the process.
Some see PIPs as just a formality before an inevitable firing. While they may provide employers a layer of legal protection during terminations, HR leaders say PIPs should instead be good-faith agreements that offer employees the opportunity to thrive or even identify new strengths and skills.
Back up. Amid economic uncertainty, some employers, such as Meta, have warned employees of plans to use PIPs to weed out poor performers. One expert told HR Brew that PIPs should be seen as a last resort when addressing performance issues, and that they should never be a surprise.
“There should be conversations that preceded that actual delivery of the performance improvement plan, where everybody was involved,” explained Scott Dust, management professor at the University of Cincinnati and chief research officer at employee engagement platform Cloverleaf. After an employee and their manager have had these conversations, the manager should speak to HR about implementing a PIP.
Elements of a good PIP. There’s no one-size-fits-all approach to developing and implementing a PIP. According to the US Chamber of Commerce, “the more clear and specific the PIP is in setting measurable goals and employee expectations, the more likely it is to succeed.” It should be developed by the manager and reviewed by HR to ensure “it is free of any bias” and is reasonable.
The plan should be presented to the employee by both the manager and HR, and the way it is communicated is vital, Dust told HR Brew. “Because of all of the connotations of performance improvement plans, it would behoove the human resource professional to pay just as much attention to the relational dynamics in the psychology of the interaction as it would to think through the bullet points of the actual performance improvement plan,” he told HR Brew.
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The plan isn’t set in stone the moment that the manager and HR leader put it together, explained Dust. A PIP is more likely to be successful if the employee helps craft it. “Goals have a higher likelihood of being obtained when they’re specific, difficult…and participatory. If the employee and the manager cocreate these goals, you have a higher likelihood of being successful than when the manager just pushes down,” he said.
Ultimately, the PIP should focus equally on the process and outcomes, Dust explained, offering an example: “If you put a salesperson who’s not achieving their quota on a performance improvement plan, and you say, ‘Hey, you need to sell X number of cases or something like that, or hit X number in revenue,’ it doesn’t give them any information on what to do differently.” Instead, focus on the process associated with improving sales. “You know that the top performers make this many phone calls [or] do this type of marketing, those are the things that should be in the performance improvement plan. That’s reskilling.”
When it comes to post-PIP outcomes, the plan should clearly explain the consequences of not meeting the agreed upon goals. Repercussions may include a change in the person’s role or termination, according to SHRM.
HR as a coach. Dust stressed that HR should be a coach to both the manager and employee throughout the entire process. “Ask them the hard questions. Ask for context and ask enough information and have enough intuition to be able to help the manager come to the conclusion on their own of what’s the right versus the wrong thing to do, given the circumstances, given the strategy, given the situation.”—KP
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