ith the exception of Donald Trump, employers usually do not enjoy firing an employee.
Sometimes, though, parting ways is the right thing to do, and introducing a formal
process that merely forestalls an inevitable result seems straight out of Dilbert.
So, I offer five arguments for employers to consider before placing employees on
performance improvement plans, or PIPs:
1. It’s Not Fair to the Employee
Despite its name, a performance improvement plan, like
probation, is supposed to inform the employee in SMART (Specific, Measurable, Action,
Results, Time-bound) format that performance needs to improve dramatically and that
his or her job is in jeopardy.
Of course, most managers regularly provide informal
feedback to employees. When an informal discussion does not work, a perceived problem
can be addressed at a regular performance review or a specially scheduled one. Thus,
by the time an employee is placed on a PIP, almost always there’s a manager who
has concluded that the usual avenues for improvement are not going to generate the
desired results.
With the manager having lost confidence in the employee,
the PIP does not typically do the employee any good. It might even hurt the employee’s
chances of landing a job with another employer. (The employer will most likely avoid
contradicting the written PIP even with a neutral reference, and the PIP might come
up at an interview in discussing the circumstances of the employee’s departure.)
The PIP therefore makes it harder for the underperforming employee to move on.
2. A PIP Puts the Employer in a Box
A PIP documents the reasons for termination, establishing
that the employer’s legitimate business needs were not being met and that the employee
was given a last chance. Indeed, PIPs have helped employers successfully defend
lawsuits and have become a prevalent best practice in human resource management.
In addition, the SMART format protects employers from their own managers’ possible
illegal prejudices.
While important, these benefits should be weighed against
a PIP’s appropriateness. Sometimes the real culprit underlying poor performance
defies the SMART format, whether it is a communication breakdown, a personality
conflict or simply an employee’s lack of enthusiasm for the job.
Moreover, a PIP’s time frame, which typically is 30
to 90 days, forces the employer to evaluate the employee yet again. Even worse,
the artificial deadline may not correlate to the employer’s business goals or the
actual time needed for an employee to improve, and it undoubtedly postpones the
search for a replacement employee.
3. Doublespeak Complicates
Because PIPs focus on future performance objectives,
and no one wants to hear that his or her job is on the line, it’s easy for employees
to focus only on the positive message that the PIP is about working together to
improve performance. The manager, however, may view the PIP as a formality on the
path to termination, given whatever it was that brought the manager one step away
from firing the employee. Besides, to the extent a PIP masks the actual causes of
a manager’s past, subjective displeasure by focusing on future performance, the
PIP steers an employee away from the actual criteria that may be necessary for that
manager’s long-term satisfaction.
4. The Employee Will Strike Back
Those employees who get defensive could use the PIP
to fight back. For example, the employee might challenge the PIP’s criteria or the
adequacy of the company’s training. Even employees with no legal protections for
their own incompetence might file complaints, causing employers to worry about evoking
a retaliation claim. Unfortunately, all too often a PIP transforms the firing of
an at-will employee into a painfully complicated ritual.
5. There Are Better Ways to Terminate Employees Than
Through a PIP
Once an employer is ready to initiate a PIP and fire
the employee, the employer might as well look for ways to part amicably. Under the
best of circumstances, former employees can become new customers, vendors, referral
sources and goodwill ambassadors.
To encourage that result, employers should consider
offering employees the option of resigning instead of going through a PIP. When
documenting performance is desired, performance reviews can accomplish everything
a PIP can and more. They document the employee’s past performance against objective
as well as subjective criteria and, if needed, can offer expectations for necessary
immediate improvements. If it is not time for a regular review, employers can schedule
a special midyear performance review and state the reason for it.
Moreover, if an employer is willing to put up with a
30- to 90-day PIP, that employer can consider giving 30 to 90 days’ notice or offer
a severance package (in exchange for a general release of claims, of course) that
gives the employee an opportunity to find another job. If an employee finds a comparable
job, it will mitigate his or her potential damages. And, if the employee does sue,
that special performance review will come in handy.
Workforce Management Online, May 2008 -- Register Now!
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