“Why do employers bother giving employees Performance Improvement Plans (“PIP’s”), if they always fire them after?”
Published on November 3rd, 2010 by Alan L Sklover
Question: Dear Alan: After all I’ve read about Performance Improvement Plans, or “PIP’s,” and being placed on one, and ultimately fired, I continue to be perplexed by one issue: since almost all employees are “At Will” employees, and so can be terminated at any time, for any reason, why do all of these companies bother with PIP’s?
It’s not like they are conducted in good faith, have a genuine interest in helping the employee perform, and has been shown to be a glorified out-papering process.
So, since no employer is required to pay severance when someone loses their job why even bother with the PIP’s?
Regards.
Linda
New York, New York
Answer: Dear Linda: I heartily agree with so much of what you write. However, two things you write are in error, and it is in those two errors that the answer to your question lies.
(a) First, it is not correct that “at will” employees can be terminated for “any” reason. While most people, lawyers and judges seem to believe that, it is a very incorrect statement. What is true is that “at will” employees can be terminated for “any proper” reason. So, employers cannot terminate employees for improper reasons, such as discrimination, retaliation, harassment, because they will not engage in improper or illegal behavior, and/or many other “improper” reasons.
(b) Second, you write that employers are not required to pay severance when someone is terminated. That is true, but when severance is paid, it is not due to any “requirement.” Rather, severance is paid to reduce risks, including risks that employees will claim they were fired for “improper” reasons.
So, if you put these two corrections together, we get the answer to why you are perplexed: Performance Improvement Plans are almost always instituted (a) to create a seemingly “proper” reason (and paper trail) to fire someone (b) in order to deny them severance, and possibly even unemployment benefits.
By instituting Performance Improvement Plans (or “PIP’s”), employers (i) humiliate, (ii) infuriate, and (iii) intimidate employees. Then, as a direct result:
• Often after a PIP, an employee will quit in disgust; presto: no severance and even no unemployment benefits, and the employer does not have to explain to anyone why they wanted the employee to leave.
• Often after a PIP, an employee will feel intimidated, and simply accept his or her termination; presto: no employee request or expectation of severance, and the employee will be too intimidated to ask for a reason for his or her being singled out.
• Often, after a PIP, an employee will feel infuriated, and either shout or engage in some other bad conduct; presto: they are then fired for “cause” and given no severance and not entitled to unemployment benefits.
• Often after a PIP, HR will say to an employee, “You know, your resume would look so much better if you resigned, than were fired; we will ‘let you’ resign, as a favor.” Presto: no severance, no unemployment benefits, and the employer does not have to give a reason for pushing the employee out.
• Often, after a PIP, HR will say to an employee: “If you resign, in the future you may come back and work for this company. But if you are fired for performance reasons, you can never come back.” Presto: the employee quits, without request or expectation of severance, and is even denied unemployment benefits.
• Often, after a PIP, HR will say to an employee, “If you resign we can give you a neutral reference, and maybe we will even not contest your application for unemployment.” Presto: no severance, and no need to provide a reason for wanting an employee to leave.
So, (a) many times PIP’s are used to hide improper reasons for wanting an employee to leave, when the real reason is improper. Also, (b) using PIP’s helps employers reduce severance costs, and even lowers their unemployment insurance premiums, which are based on how many of their employees collect unemployment benefits.
I am certain that some Performance Improvement Plans are honest and in good faith, but my experience is that such good faith use of PIP’s is quite rare. Most are false and fraudulent, and so very much upsetting. I believe it is the humiliating, the infuriating and the intimidating effects of the vast majority of Performance Improvement Plans that are the source of their power for employers, and the essence of their evil.
False and fraudulent PIP’s are a scourge everywhere, and do pose a great problem for employees. We strongly urge our blog readers to stand up to them, resist them, and “push back” at them, using the insights we offer on our newsletters and Q & A’s, [click here]. Likewise, our video on responding to a PIP can be viewed, [click here].
Finally, our best-selling Model Letter to use to Push Back at a PIP is available, [click here].
Linda, I hope you are no longer perplexed. Thank you for writing in, and giving me the opportunity to explain these important aspects of PIP’s.
If this has been helpful, I would ask that you do me a small favor: tell one or two of your friends on Facebook, LinkedIn or other social media of our blog. It would simply help us “spread the word.” It is our hope that if less employees are perplexed, more employees will be empowered, and empowered employees are productive employees.
Best, Al Sklover
© 2010 Alan L. Sklover, All Rights Reserved.
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There is a proverb that truthfully states, “One man’s story sounds good until the other side is heard.” I am an employer and have hired and fired over the years. Your answer to Linda does not seem to be in balance, painting the employer as most often being the bad guy.
In some of our cases an employee will creatively mis-represent thier capabilities at hiring. While we have never created a PIP, it would seem my intention for the same would be to boost an employee’s capapcity to the point of being an acceptable asset.
In the midst of a difficult economy, our company has found it necessary to look at ways to increase productivity and efficiency. Supporting a faltering employee with an incentive program to increase their contribution in some cases would be gracious, patient, kind and should produce hope.
I would not recommend that employees take a hostile approach to a PIP or other encouragement to bring themselves to new levels of productivity. Another proverb says, “Bitterness rots the bones (affecting health)”, and to continue in a relationship with a somewhat hostile bitter postion can not be hidden, do damage to and not achieve or come close to fair ideals.
I believe strong management would generally use a PIP (based on job performance) as an extension of a sincere, ongoing performance evaluation process. The performance evaluation process would identify the area of concern. Management then clarifies expectations. coaches, trains, mentors etc… When performance does not improve after appropriate support then a PIP or redirection are the next logical steps and not a surprise to the employee. I have seen many people improve performance and remain employed when these steps are followed and the sincere best interest of the employee and company are the motivation.
Unfortunately I must concede that this more often not the case.
Regards
I found almost nothing I could agree with in the article. A PIP is a Performance Improvement Plan. It’s purpose is to drive performance improvement and get a valuable employee back on track. Your idea that a PIP to deny severance and/or unemployment is ludicrous. Your list of “often HR will say…” is pure speculation and your outcomes (“Presto…”) are based on what? Your “experience”?
For someone with such as anti-employer bias, why are you posting your questions (most of generate little or no response) on Linked HR? It seems an odd venue for your topics. Perhaps that is why they are, for the most part, ignored?
I would like to ask John and Jeff a question. Why involve HR in a PIP? Why have it in writing? Anytime you involve HR and written documentation, it is not a good thing. I would thing mentoring coaching etc. could be done without written documention. Looks you guys are basically saying the same thing Al is saying other than “Hey wait a minute, this employee might actually not be good.”
I think alot of the situations here involve people who have had no warning a PIP was coming. They had good reviews etc.
Dave is right – I was given a PIP without a warning. And my supposed performance problems went almost 6 months back! If something I did 6 months ago was not up to the standards, why not tell me right away, but wait for so long? How come all these issues were not dealt with informally first? These types of things is really what made me wonder what the real purpose of my PIP was. PIP should never come as a surprise, and when it does, to me it’s a sign the management’s purpose is not really to help you improve your performance.
I found myself in the same situation that Boston Girl did. I had the same exact thing hapen that Al wrote about, HR and my manager asked me to quit. I had my manager tell me the same day he handed me the PIP, “you are the best “tech” we have, but we need you to be involved in projects”. The real reason was that tech support was being sent to India in two months. I was not part of plan going forward. I let the PIP complete, even though in my eyes I completed it, they had their minds made up. If you get a PIP ride it out, if you are truly a great employee with a clean employment history, you will be able to collect unemployment benefits. Take some time and find another place to be the best you can be.
I will be given a PIP tomorrow for the first time in my 37 year working career. Our company recently had layoffs and a director friend of mine confirmed that they had to implement ‘forced distribution’. This means that people normally getting a 5 on a review were given a 2 to save the company money and make it easier to get rid of people in the next round of layoffs.
We have 1-on-1 meetings each week with our managers all year long to keep current with our progress and mitigate surprises at review time. I’ve been told verbally – ‘great job’ and ‘they just love you’ and ‘you have a strong and admirable work ethic’ but nothing documented on paper…. I got a 2, no raise, no bonus and all of my gratitude for getting this job in this awful economy has turned to contempt. No deficiencies were ever conveyed to me, no remediation was ever presented, no improvements to my performance were ever offered. I will not sign this garbage (HR and my manager will be present) unless they give me something measurable and quantifiable. Our company catch phrases – ‘we do the right thing’, ‘we seek to improve’ and ‘we treat others with respect’ are vague and nebulous and I expect nothing but corporate, Orwellian BS tomorrow. Job search has been in full swing for weeks, I’ve been contacted by several companies and hope to be out of this place in the next few months – on my terms.