A recent Wall Street Journal article explored several downsides of the Performance Improvement Plan (PIP), a common management tool that can be a guide for better work or a prelude to termination. The headline makes it clear that the PIP is something to be feared and avoided: “The Most Hated Way of Firing Someone Is More Popular Than Ever.” Whether any individual PIP is effective or not, there is one alternative that might avoid most of the PIP’s issues while delivering on its stated intent.
Most PIPs are adopted when there are severe performance issues that could merit termination. Ostensibly, a PIP is supposed to communicate to an employee what they could do better and provide a path towards making those improvements (hence the name).
While the Wall Street Journal article focuses on PIPs in private, for-profit businesses, they are also found in non-profit and higher education organizations. They seem to be an outgrowth of two competing drives: the need to squeeze more productivity out of each dollar spent on labor, and an aversion to wrongful termination lawsuits (the Journal notes that employment lawsuits are the most frequently filed lawsuits in California, giving a sense of how big a liability legal action can be). Those not performing up to par can’t be allowed to coast, but a summary termination can bring legal headaches. Hence the PIP.
A well-designed PIP has two purposes: to document existing performance problems, providing a paper trail to mitigate any possible future legal action, and to provide a path towards success. Both aspects are administered and monitored by the same person. And there’s the rub: If the decision has already been made to terminate, the PIP is an exercise in frustration. If the PIP does represent a true effort to help a struggling employee, of course, it would be in everybody’s best interests for it to work out, but the employee, unless they are a mind-reader, has no way of knowing the PIP’s real function. And, as I have said before, no news—or no news that you can trust—is bad news.
The PIP really does pose a dilemma: If the goal is genuinely to improve performance, the simple act of issuing the PIP can lead to the employee fearing imminent termination and perhaps preemptively leaving, which is the exact opposite of the desired outcome. If it is meant as a warning shot for termination, it might lead to an immediate drop in performance, as the employee figures that, since they are already on the way out, any positive effort is wasted.
With all this in mind, it’s not surprising that the Journal was so negative about the PIP. This simple document seems like the embodiment of the “Orpheus Syndrome,” when asking if there is a problem guarantees that there will be one. So what can be done?
The Journal mentions one alternative that I will share here: offering a choice of either accepting the PIP or taking a “generous settlement” and separation agreement. This seems to provide an avenue for those who want to get better while giving those who feel pessimistic about things working out a relatively easy out. When compared with the alternative, a mandatory PIP for an employee who might spend the next three months putting in minimal effort while job hunting, this option seems like a good deal. But it only ameliorates the consequences of the PIP and doesn’t avoid the central issue: that telling an employee they need a PIP is tantamount to telling them they are at risk of termination, destroying whatever figments of trust that might still exist.
I like another option, which is managers addressing performance issues immediately in daily conversations “escalating in intensity.” But even this, I think, starts off on the wrong foot. If we just keep telling people that they are doing a bad job it doesn’t seem likely that they will change their behavior, even if we get louder (literally or figuratively) as the issues accumulate.
I will humbly suggest another, more nuanced option, one that, if done right, won’t give the manager anticipatory anxiety or have the employee spamming Indeed.com. It only has two steps. There is a catch, though: it needs equal buy-in from both the manager and the employee.
Step one: Share your expectations. In plain language, without the praise/criticism/praise sandwich (which people increasingly see through and find annoying). This is absolutely essential. Assume that the other party has no idea what you want and be as specific as you can. After all, they can’t know the institutional history like you do, so take nothing for granted. The employee, too, should be transparent about what they expect, being just as thorough.
Step two: Listen. The best managers (and employees) tend to be the best listeners. I mean that they go beyond not moving their mouth when the other person is talking to actually take in and digest what they have said. Listening does two things at once: it makes the other person feel heard, validating them and building trust, and it can offer clues as to what the underlying issues really are.
Don’t be fooled by the simplicity of the process: if done sincerely, this will be hard work, since it may be difficult to tie down exactly what our expectations are, and we may struggle to see (or hear) the situation as described by someone else. But if done right, these two steps should open up an array of options. Sometimes, the employee might end up leaving, in which case both parties can be satisfied that this was the best outcome for everyone rather than the result of a botched intervention. But by trying a process that builds and solidifies trust, it seems that there is a higher likelihood that both parties can figure out how to make things work together.
Because it does come down to working together. Performance metrics aren’t logged in a vacuum. Employees and managers are real people trying their best (usually) to get along in an environment that can undermine trust and de-incentivize candor. I often say that, in nearly all cases, the resolution at the lowest possible level with the least amount of intervention is almost always the best one. An ongoing conversation about expectations first might make a PIP unnecessary. And if it turns out that one was necessary, it remains an option. Or the employee might decide on their own that this isn’t a good fit, and announce that, reluctantly, they have found another position elsewhere, departing, if not with a smile, at least without bitterness.
Naturally, all of this is harder in real life than in theory. Personalities can get in the way, but they can also help. Perhaps by listening, we learn something that turns the key, leading to a real breakthrough. Or not, but it is worth the effort.
So until next time, expect the unexpected, stay informed, and I’ll stay informal.
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