Performance Improvement Plans, or PIPs, are used all over the world—ostensibly to address and improve the work of underperforming or unhappy employees. Unfortunately, they are often remarkably unsuccessful at achieving that outcome.
In most cases, PIPs are really used just to buy time before making a personnel change; create a paper trail for legal purposes; or address minor, surface-level issues.
The truth is, PIPs don’t improve performance. They may even do more harm than good. Here’s why.
1) PIPs focus on symptoms, not root problems.
The central problem with PIPs is that they fail to address the underlying causes of poor performance.
They’re basically the business equivalent of a doctor giving everyone with a headache an aspirin without bothering to find out why the patients have headaches. One person might be dehydrated, another might be suffering from a gluten allergy, and a third might have a brain tumor—problems that call for very different types of care, and not just aspirin.
Similarly, while a PIP might help some people with minor performance problems, in most cases more work is needed to diagnose and address the root issue.
Unfortunately, some root problems aren’t fixable (e.g., the person is in the wrong job or does not have the required skills)––and some perhaps shouldn’t be fixed (e.g., the employee disagrees with a core element of the culture that is not going to change). Whatever the cause of the performance headaches, it’s important for company leaders to have honest conversations about the real underlying issue(s) and what solutions might be possible.
Keep in mind that if someone isn’t a good fit for your company or its core values, no PIP is ever going to fix that.
2) PIPs tend to improve performance—but only in the short term.
Since PIPs only treat symptoms––and are typically executed only after problems have become really entrenched––their positive results are often temporary. The potential loss of a job can be quite motivating in the near term, but long-term patterns almost inevitably resurface.
So, while you might get a team member to improve over the course of a 60- or 90-day PIP, most employees will return to form unless the root problem has been addressed.
Note, however, that a PIP can actually be a good choice if a performance decline is due to factors outside of work or something temporary—such as a recent bout of depression, money troubles or illness in the family. In these cases, a PIP can help someone focus on getting back on track. Just be sure the employee is engaged in the process, understands why and where he needs to improve and is ready to make the investment of time and effort necessary to stay with the company.
3) PIPs do not provide legal protection.
The real reason many companies use PIPs is not because leaders think they will resolve problems, but because they think documenting the employee's failures will protect them from a lawsuit. Employees aren’t really expected to succeed, and thus the whole process does nothing more than generate additional distrust and anger.
What’s more, a PIP isn’t really going to do much to protect your company, since most lawsuits emanate from feelings of distrust and disrespect. I recently spoke with a company leader who used to use PIPs to protect her from lawsuits but still found herself being sued. She then shifted to a policy of having open and honest conversations with employees. She said treating people with respect from the outset has proved to be a much more successful strategy for preventing lawsuits than PIPs.
4) Honest dialogue is the best approach to performance concerns.
The truth is, if you’re already giving an employee regular feedback––which you should be––PIPs should not be necessary. You should be able to ask any employee: “Is this job what you want to be doing”; “Are you happy?”; or “Is there something else you would rather be doing—here or elsewhere?”
No one wants to do a bad job. So, when someone isn’t performing well, it’s only fair to give that person an opportunity to consider if she is in the wrong role or company. Then, you can have a productive discussion about next steps.
Patti McCord, who is famous for helping to create the much-heralded culture deck at Netflix, once said that she discusses performance with employees in terms of what the company needs six months out. If she doesn’t expect the company to need a certain employee’s skill set, she gives him that news straight out, while also providing support for making the transition.
McCord has said she believes offering candid feedback, a reference and a generous severance package to help an employee move to a new job is better for both parties than dragging out a process that’s destined to fail. Her position is, “Be generous, but be honest.”
If you show employees that you care about them—but you aren’t willing to compromise your performance standards or the needs of your business—you will succeed in establishing standards that everyone at your workplace can respect.
This strategy is guaranteed to lead to better outcomes than any PIP.
