Lauren Webber and Chip Cutter of the Wall Street Journal wrote about performance improvement plans (PIPs) the other day — click here for the article. What they found is striking: today, nearly 44 out of every 1,000 workers face formal performance procedures. That’s up significantly from just a few years ago. In their article, they trace how PIPs got their start, how managers respond, and how employees respond. No surprises, nobody likes them — except lawyers protecting their clients.
I don’t believe PIPs effectively manage performance. If a manager must resort to a formal measure of performance management, then what has that manager been doing during the lifetime of the employee? The data backs this up – at Cisco, they found that 90% of employees who received a PIP left within a year, whether they survived the process or not. That’s not performance improvement – that’s a slow-motion exit.
Great leaders actively share feedback that helps employees grow and perform better — in real time if possible. Take Michael Pizzorno’s approach at Salient Medical Solutions: address issues through daily conversations that escalate in intensity when needed. No formal documentation, no bureaucratic process – just direct, honest communication.
I don’t believe PIPs are effective for employee experience. Even as a child, I knew of incident reports, academic success reports, JUG (justice under God – a Jesuit thing), I’ve heard of pink slips, and more. These images are symbols that represent danger. A PIP is no different – it’s a symbol that something is wrong; and your employees know it. The numbers tell the story – only 10-25% of employees survive PIPs. That’s not a development tool; that’s a exit ramp.
The alternative is simple — mutually agree on an end date and give a generous severance. This agreement gives employees the dignity to walk out with their head held high and an opportunity to close work relationships. All around, a much more pleasant and supportive experience. As HR veteran Steve Cadigan puts it, when given the choice between a PIP and a generous severance package, 75% of employees choose to leave – proof that even they know PIPs are usually just window dressing.
Some jobs work out, some don’t. It’s a traumatic experience to lose a job. Why make it worse with a device like a PIP? Remove the bureaucracy, and treat your team with dignity. In today’s world of AI pressures and post-COVID workplace adjustments, we need more humanity in our management approaches, not less.