Why Performance Improvement Plans Don't Improve Performance (2024)

Performance improvement plans (PIPs) have been around for a long time – as long as I can remember. PIPs are action plans given to an employee to provide an opportunity to improve while addressing their failure to meet specific performance goals.

While a PIP sounds ostensibly effective, is it really?

Several years ago, I had an employee tell me her manager put her on a PIP because she struggled at work. She thought, “I’m failing, and they want to get rid of me.” So instead of encouraging her to work on the deficiencies, it made her feel like her job security was suddenly jeopardized.

To make matters worse, the conversation between this employee and her manager just happened once with no further check-ins. She immediately started looking for another job.

I’ve been a manager for 20 years and can count on one hand the number of formal PIPs I have initiated. While a PIP might sound like an effective approach for helping underperforming employees, they are often detrimental to performance. It’s difficult to remove the stigma. And even if an employee improves after being on a Performance Improvement Plan, it is often short lived, and they’ll likely have one foot out the door.

While these programs are supposed to help struggling employees, they’re too often used to cover up poor leadership, fire an employee, establish a legal paper trail, or deal with minor, surface-level issues.

PIPs Don’t Treat the Root Causes. Honest Conversations Do.

The “why” or the root cause of performance issues is often overlooked in a PIP.

Some people just aren’t a good fit for the position or your organization, and no amount of coaching can change that. Either they’re in the wrong job, don’t have the skills, or don’t align with the company’s values. That doesn’t imply they’re poor employees; it just indicates the role or company isn’t a good match.

At that point, managers and leaders must take responsibility for identifying the root cause of their employees’ performance. For instance, rather than attempting to enhance their performance, assisting the employee in finding a role or organization that better fits their abilities or values might be more helpful.

Most people want to do a good job, but sometimes something causes them to be stressed or dissatisfied with their role. There may be external factors such as health or personal relationships that are impacting performance. It’s, therefore, best to engage in transparent one-on-one conversations to uncover the root cause and outline areas for growth.

Alternatives to Using a Performance Improvement Plan

In my experience, Performance Improvement Plans are best used only as a last resort not a first-time intervention. More effective ways to maximize employee performance include:

Setting Expectations Early On

You can’t expect employees to know your expectations if you don’t tell them.

Get specific! Before hiring, list the skills they’ll need and the performance expectations they must meet to succeed. Then, communicate these expectations throughout the onboarding process, so they know how you are measuring performance.

Doing Regular One-On-Ones

One-on-one coaching conversations should be held regularly with all employees not justthose who are underperforming.

If you see performance issues in a new or old employee, don’t just let it go. Address it and address it quickly.

Talk about the issues, provide constructive criticism, and devise an agreed-upon course of action together. Then follow-up regularly to discuss progress. To be most effective, one-on-ones should be designed, so employees understand what’s expected of them, have input into the plan for achieving development goals or addressing concerns, and have a way for measuring progress towards goals.

This approach lets you discuss growth and development goals as well as address performance concerns with all employees on a regular basis. It provides employees the opportunity to be heard. One-on-one discussions can build trust and help create an environment where both positive and constructive feedback becomes a part of the culture.

Knowing When to Part Ways

If an employee cannot perform at the level you expect despite all the support, don’t hesitate to discuss an exit plan. Sometimes losing them as an employee is beneficial for both parties.

An open honest conversation can help understand the root cause of performance issues and determine a course of action based on the real reason for performance issues.

I remember one employee who had been a top performer. Her performance suddenly started to falter. During a one-on-one I asked her about her deteriorating performance. She confessed she had been contemplating resigning to move closer to family. She was hesitant to tell us because she was afraid we would get angry or try to talk her into staying.

Instead, we asked her to stay on for thirty days to help train her replacement. She agreed to that, and her work quickly returned to her typical high level of performance while she enthusiastically shared her years of experience with the person replacing her.

Think about how differently this scenario might have gone if we had slapped a performance improvement plan on this employee.

Is There a Way to Implement a PIP Correctly if One is Necessary?

If you truly want to help the employee improve and other approaches have been ineffective, you may want to try a Performance Improvement Plan as a last resort. To increase the chances of success, consider changing the vernacular. Many people have strong feelings about the acronym PIP since it sounds like code for “We’re going to fire you.”

HR software platform Lattice reframed theirs as “performance success plans” instead. Others rebrand PIPs as “development,” “enablement,” “coaching,” or “empowerment” processes instead. This change in language can help bridge the line between intent and perception. Make sure though that you are not just changing names without changing how you implement the process.

Lastly, if you have already decided that the employee needs to be terminated, a Performance Improvement plan may not be your best course of action. Ask yourself this question, “If he or she meets or exceeds the expectations laid out in the performance improvement plan, would I still want to fire them?” If the answer is yes, then skip the PIP. Doing a Performance Improvement Plan will only prolong the process, is a no-win situation for the employee, and could put the company in a legal situation that is hard to defend.

How to Enhance Employee Performance

As a leader, your job is to create an environment where employees can perform to their full potential. Set expectations, communicate with employees regularly, and collaborate with them through one-on-one coaching sessions that provide growth plans for all employees.

The key to helping your employees reach their maximum potential is training leaders and managers to coach for performance and provide continuous feedback. Performance coaching is a proven method of helping build successful teams, and Action Strategies can help you get there.

Julie Chance, CEO of Action Strategies, has over 20 years of operations and training expertise in implementing leadership and performance coaching programs to boost your team’s performance.

Contact Julie you want to provide your team with the tools they need to succeed.