Performance Improvement Plan a Fraud? – Here’s 12 Clear Indicators

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“Corrupt politicians make the other 10 percent look bad.”

– Henry Kissinger

ACTUAL CASE HISTORY: As readers of this blogsite know, it is my professional opinion that at least 90% of Performance Improvement Plans (“PIPs”), also called Performance Enhancement Plans (“PEPs”), are fraudulent at their very core. You might be thinking “Gee, isn’t the word ‘fraud’ a little harsh? And might that “90%” be a little exaggerated?”

As an employment attorney of 30+ years, I don’t think the word “fraud” or the number 90% are one bit harsh or exaggerated, although I do appreciate that “fraud” is a “hot-button” word. It’s a serious word, not to be used lightly, and never where unjustified. But if the word is accurate, applicable, and appropriate, well, that is the word I believe should be used.

A fraud is commonly defined as “an intentional misstatement or mischaracterization of fact intended to induce action by another person to his or her detriment.” Fitting that description, I have found most Performance Improvement Plans are designed to (a) create a false record, to (b) intimidate, humiliate and infuriate employees, (c) to induce them to quit, get sick, or engage in misconduct, (d) to achieve their resigning or engaging in misconduct, all to (e) reduce headcount without severance or risk of lawsuit.

What SHOULD a Performance Improvement Plan be? Simple: a Plan to help the employee to Improve his or her Performance. Just like it is fraudulent to induce someone to buy a cat that is really a dog, so too is it fraudulent to call something a PIP if it is not a Plan designed to help an employee Improve his or her Performance.

Most often, a Performance Improvement Plan is an exercise designed and supervised by Human Resources to assist management in terminating an employee. It is a false “paper trail” to justify terminating an employee, or to induce an employee to resign instead of being fired, thus saving the employer both the expense of severance and risk of a potential lawsuit.

These days many employers are using Performance Improvement Plans to lay off employees – sometimes entire departments – by, first labeling each one a “performance issue” and an “unsuccessful PIP.” I know of one large law firm that seems to be doing this each week to lower headcount of younger associates without incurring “bad publicity.”

So how do you know if a PIP is fraudulent, and how can you demonstrate that to others?

LESSON TO LEARN: How does a doctor make a diagnosis of an illness? How do police determine if a crime has been committed? And how can an employee demonstrate to others that his or her Performance Improvement Plan is fraudulent? All in the same way: by (a) reviewing and sharing the available data, (b) identifying and describing its false nature, and (c) explaining how it is being used to create false conclusions.

The “available data” that shows a Performance Improvement Plan is fraudulent – of, if you wish, false, a misrepresentation or mischaracterization – is set forth in the PIP, itself. There are four general categories of such fraud, and within those four general categories – set forth below – a total of 12 “fraud indicators” you can use.

Identify these, describe them, and then share them with Senior Management when you “push back” against a PIP. By doing so, you will be far more likely to have all the leverage you need to either survive that Performance Improvement Plan, or get a fair severance package as a result of your doing so.

If your PIP is truly a Plan to help you Improve your Performance, then these “Indicators of PIP Fraud” should not be present in your Plan’s objectives, procedures, timetable, operation, mechanics or goals.

WHAT YOU CAN DO: If faced with a Performance Improvement Plan that you know to be unjustified to begin with, and then impossible to succeed in no matter how hard you try, push back by noting that is fraudulent. If the “fraud” word is too harsh for you, then use equivalent phrases such as “intentional misrepresentation,” “false and mischaracterizing,” or “intentional deception.”

Here are the 12 most common indicators of “Fraud by PIP,” and the particular words and phrases you can use to identify and describe them in your “PIP Push Back” memo to a member of your employer’s Senior Management:

A. Facts and Conclusions; Dishonest Descriptions

1. “Fraud by Intentionally False Facts” about your performance. This is the most direct category of facts and events that may be used to prove a performance improvement plan is a fraudulent exercise. Are your achievements being described as “not achieved?” Are others being given credit for your accomplishments? Are you being judged on the basis of a new territory that was assigned to you just weeks before the annual review?

Such misstatements are arguably fraudulent, and if you can demonstrate by facts and circumstances that they are likely intentional, then you have taken a good first step in establishing this first indicator of PIP fraud.

2. Omission of Positive Achievements, Goals Reached and Difficulties Overcome. Fraud can be achieved, as well, by omission of critical facts in your performance review. Here are but a few examples: (a) not mentioning that you were given a special assignment that took up half of your time; (b) not mentioning that all other producers had four assistants, while you were assigned only one; (c) not mentioning that you were on maternity leave for four months of the 12-month measurement period. These and similar omissions can also be a way of painting a false picture of your performance, and should be brought to light when pushing back to your PIP.

PUSH BACK to YOUR PIP. To help you with “What to Say and How to Say It”™, we offer a “Model Response to Receiving a Performance Improvement Plan (“PIP”). To obtain a copy, just [click here.] Delivered by Email – Instantly!

3. “Fraud by Conclusions,” because conclusions based on false facts must, in turn, be false. There are two kinds of conclusions used to commit fraud in Performance Improvement Plans. The first is illogical or irrational conclusions. Here is an example: you did not train your staff well when, in fact, training your staff is not part of your job description. The other “fraud by conclusions” is comprised of conclusions based on fraudulent facts, as noted above.

Said a bit differently, “If the facts are intentionally false, then any the conclusions reached on those intentionally false facts must be just as intentionally false, and that is the definition of “fraudulent.”

B. Impossible Goals: Vague, Subjective, Immeasurable and/or Unachievable

4. “Goals without Agreed Meanings.” If an employee must meet a goal, he or she must be able to understand what that goal is. Likewise, if a manager assigns a goal as part of a PIP, surely a Senior Manager must understand what was assigned.

Here are four of my least favorite but most commonly seen “impossibly vague goals” found in PIP’s: (a) “Consistently Demonstrate Leadership”; (b) “Proactively Undertake Ownership”; (c) Show Effectiveness in Reaching Objectives”; and (d) “Inspire Confidence.” They are so vague as to defy understanding.

First Try Not Work:? We offer a “Model Second Response to a PIP, If First Doesn’t Work”). It shows you “What to Say, and How to Say It.”™ To obtain a copy, just [click here.] Delivered by Email – Instantly!

5. “Goals without Measurable Metrics.” Suppose that the goals you are required to achieve for your Performance Improvement Plan include “significantly more institutional client visits,” “substantially greater volume sales,” “publication of widely popular articles,” or “design of more sophisticated sweaters.”

The issue is this: how is your manager defining – and thus going to measure – “significantly,” “substantially,” “popular,” and “sophisticated?” Likewise, is your manager defining, and hose going to measure – “institutional,” “volume sales,” “widely,” or “sophisticated?”

We all know what “an inch” means; no one knows what “a short distance” means. Without clear and defined metrics of success, it cannot be shown whether you have failed or succeeded, and thus absence of measurable metrics is a trap set by a trapper, in and of itself.

C. Goals that even Superman or Wonderwomen could not Achieve

6. Inadequate Time Allotted. This “Indicator of PIP Fraud” could not be easier to describe: Your Performance Improvement Plan provides you 30 days to do what usually takes at least 6 months. How about making 25 client visits – across 16 states – in two days? Or, identifying and securing 10 new sources of raw materials at best-available prices in one week? Need I say more?

Inserting into a PIP a requirement that you achieve goals in a timeframe that is surely inadequate is surely a fraud, because it is both intended to result in your failure, and will inevitably result in your being deemed to have failed. That is not a Plan to help you Improve your Performance, is it?

Get and use positive feedback from colleagues and customers. We have Three Model Memos Requesting Feedback from Clients, Customers and Colleagues to Use as PIP Feedback. To get your copy, just [click here.] Delivered by Email – Instantly!

7. Insufficient Resources Provided (most often staff.) This “trick” is so old that it is right there in the Bible: requiring that an employee make “bricks” without giving him or her “straw.” These days very few people are involved in the manufacture of bricks, and even as to those employees, I don’t think any do so with straw as an ingredient.

Instead, we often see employees assigned goals in PIPs that require the efforts of many people, and then denied even the minimally required staff to do so. How about “Redesign and rehab all seventeen stores owned by the company, with one assistant, who has just been hired, and has no relevant experience?” That’s a fraudulent PIP-goal if there ever was one.

8. Absence of Proper Authority or Mandate. I was once retained by a client who worked for Human Resources in a large insurance company. Her field of expertise was employee training. During a period of downsizing, for the very first time in 11 years, she was – without prior warning or notice of any kind – given a Performance Improvement Plan that required her to install and initiate a nationwide training program to train all salespeople on a new software package. Only problem was that she was given no authority to require salespeople to spend time learning it.

She did her best to ask salespeople to do so, but they were all so buy travelling, meeting clients, trying to make sales – which is how they were judged – that few, if any, were willing to devote the necessary time. The primary goal of this performance improvement goal was as close as you can come to the definition of “Indicator of PIP Fraud” as I can remember.

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D. Sabotage of the Employee’s PIP Efforts (After the PIP has begun.)

9. Inadequate or No Coaching, Instruction, Assistance. Imagine a baseball team that wanted to improve a player’s batting. Think they would likely assign the player a batting coach? Of course, they would. Imagine an orchestra that wanted to improve an oboe player’s oboe playing. Think they would likely ask a qualified oboe player or instructor to provide instruction or assistance? Of course, they would.

A true plan to improve an employee’s performance would logically and sensibly include the assignment of a coach, an instructor, a mentor, or other person to work with the employee, along with a plan of action designed to improve the employee’s performance. The absence of assigning such a supporting person is one of the surest “Indicators of PIP Fraud” that there is, and is so very common an occurrence.

10. Failure to Continually Communicate or Provide Feedback (such as cancelling most or all 1:1 meetings.) This is so common an occurrence in Performance Improvement Plans that it is near universal: the manager requires one-on-one meetings to go over achievement of PIP goals, and then cancels, shortens, or completely ignores those meetings, with one excuse or another.

Should this happen to you, make a “respectful” email record of it, and be prepared to use such occurrences as part of either a “PIP-Pushback” memo, or a request for better severance if, as a result of an allegedly failed Performance Improvement Plan, job loss does take place.

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11. Assigned Other Tasks, Activities, Travel. This “Indicator of PIP Fraud” is also quite common: during the 30, 60, or 90 days provided to achieve your PIP goals, you are assigned other significant tasks, duties, responsibilities and time-consuming activities that sabotage your PIP goals by consuming your time, attention and energies.

Just like we suggested regarding a failure to continually communicate, above, should this happen to you, make a “respectful” email record of it, and be prepared to use such occurrences as part of either a “PIP-Pushback” memo, or a request for better severance if, as a result of an allegedly failed Performance Improvement Plan, job loss does take place.

12. Super-Micro-Management; Constant Threats and Bullying. Last but not least, during the time allotted for an employee to successfully complete his or her Performance Improvement Plan, a manager may, out of frustration or design, engage in a pattern of super-micro-management, and continual threats or bullying, to throw an employee off balance, and perhaps induce a resignation, an illness that could disable them employee, or even a confrontation that could be characterized as misconduct and “cause” for firing.

This is a tactic designed to “get under your skin,” and should be recognized as such. Do not “engage” with it. Instead, get your self through the moment, past the meeting, and over with the day. Any such behavior by your manager or other person in the course of your PIP should be memorialized in an email, names of those who may have witnessed assembled, and be prepared to use such occurrences as part of either a “PIP-Pushback” memo, or a request for better severance if, as a result of a failed Performance Improvement Plan, job loss does take place.

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In Summary . . .

Most Performance Improvement Plans are not that at all, but rather a false “paper trail” designed to justify an unjustified job termination. How can you spot “PIP Fraud?” How can you demonstrate to others your PIP is a fraud? The answer is by identification and presentation of “The 12 Indicators of PIP Fraud” above. [By the way, if you find the word “fraud” to be harsh, then you can use the words false statements, deception, misrepresentation, mischaracterization and/or dishonesty.] We hope these “12 Indicators of PIP Fraud” help you keep your sanity, maintain your composure, and by “Pushing Back at Your PIP” either keep your internal reputation and job, or help get you a fair and sufficient Severance Package.

P.S.: If you would like to speak directly about this or other subjects, Mr. Sklover is available for 30-minute, 60-minute, or 120-minute telephone consultations, just [click here.] Evenings and weekends can often be accommodated.

SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation and navigation of work and career issues requires that you think “out of the box,” and build value and avoid risks at every point in your career. We strive to help you understand what is commonly before you – traps and pitfalls, included – and to avoid the likely bumps in the road. For those receiving a Performance Improvement Plan, responding with persuasive and convincing arguments that it is an exercise in false facts, baseless conclusions, misrepresentations, and mischaracterizations, and is thus fraudulent, is the best way to survive it, or to obtain an appropriate separation / severance arrangement.

Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “rewards” and eliminate or reduce employment “risks.” That’s what SkloverWorkingWisdom™ is all about.

*A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.

Please Note: This Email Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.

Sklover Working Wisdom™ is a trademarked newsletter publication of Alan L. Sklover, of Sklover & Company, LLC, a law firm dedicated to the counsel and representation of employees in matters of their employment, compensation and severance. Nothing expressed in this material constitutes legal advice. Please note that Mr. Sklover is admitted to practice in the state of New York, only. When assisting clients in other jurisdictions, he retains the assistance of local counsel and/or obtains permission of local Courts to appear. Copying, use and/or reproduction of this material in any form or media without prior written permission is strictly prohibited. All rights reserved. For further information, contact Sklover & Company, LLC, 45 Rockefeller Plaza, Suite 2000, New York, New York 10111 (212) 757-5000.

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