Implement Performance Improvement Plans

Get employee performance on track before it rides off the rails.

Last Revised: August 22, 2011


Your Challenge

  • Managers dread implementing a Performance Improvement Plan (PIP) because they think it’s a waste of time.  However, in a recent  McLean & Company survey, 68% of employees who were placed on a PIP were still with the organization. When a manager starts the PIP process with a positive attitude towards performance improvement, the PIP is more successful.
  • Poor performance can cost an organization more than just hard dollars. Poor performance negatively impacts employee engagement and productivity, as well as customers and other departments. Addressing poor performance through a timely PIP can minimize this impact.
  • Organizations risk discrimination and legal challenges when performance improvement efforts are seen as unfair and inconsistent. A consistently implemented process for fair and reasonable PIPs can provide solid supporting documentation should the organization face a legal challenge.  In fact, 69% of organizations felt that their legal risk was reduced or eliminated as a result of PIP implementation.

Our Advice

Critical Insight

  • Managers must deal with poor performance before it begins to significantly affect other employees and the organization’s bottom line.
  • The PIP process isn’t about preparing for termination; PIPs are about improving performance so that an employee can make positive contributions to the organization.
  • Managers shouldn’t attempt to implement a PIP without HR or legal counsel. The process can become a mine field!
  • A negative attitude towards a PIP is a self-fulfilling prophesy. If the manager thinks the employee will fail, the employee will, because the manager is looking for documentation, not improvement. When a manager takes a positive approach with a motivated employee, both the employee and manager can win.

Impact and Result

Experience less grief in the process by:

  • Recognizing and avoiding the stumbling blocks in addressing performance issues through PIPs.
  • Understanding how different employee situations/profiles affect how the PIP should be approached.
  • Setting fair and reasonable performance expectations with a simple template for drafting the PIP.

Save time by:

  • Following guidelines when developing the PIP.
  • Addressing performance issues before they’ve wasted too much time.
  • Avoiding legal investigations through a well documented and fair process.

Save money by:

  • Avoiding costly legal battles with an understanding of the high level legal vulnerabilities associated with an ineffective PIP process.
  • Turning around an underperforming employee who is impacting other employees’ performance as well as customer experience.
  • Relating the PIP process to the risk tolerance of the organization.

Contributors

Interviews were conducted with the following individuals:

  • Mike Capewell, Consultancy Manager, Dell Corporation, U.K.
  • Geoff Ramey, Director, HR, St. Andrew Goldfields Ltd
  • Linda Haft, HR Consultant, the HR Office, Inc
  • Jacque Rowden, Technology Program Manager, Orrick, Herrington & Sutcliffe LLP
  • Martha McIver, VP HR, CBRE
  • Jeff Fowler, Quality Control, MOBIS Alabama LLC
  • Rene Melchers, Manager IM/IT, Brockville General Hospital
  • Two individuals have asked to remain anonymous due to sensitivity of information

A survey directed at HR professionals to better understand their experiences with using PIPs and the outcomes they realized attracted over 100 respondents.


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Get to Action

  1. See how a PIP fits into the overall performance management process and decide if it is the right course of action

    Improve performance of underperforming employees with a timely PIP implementation.

  2. Ensure the developed PIP won't create legal challenges

    Develop a fair and reasonable approach to improving employee performance with a well documented and reasonable PIP.

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