Over the past three decades, I have witnessed various approaches to performance improvement plans (PIPs) as a human resources manager in five different industries and three countries.
Often, the traditional approach to PIPs – imposing them on poorly performing employees without providing sufficient support – can feel punitive rather than constructive for many employees, fostering an environment of fear and mistrust.
But PIPs often fail to achieve the expected results for a variety of reasons: from insufficiently prepared managers to breakdowns in communication between managers and employees, to subjective judgments of performance.
In my experience, the primary reason for the failure of PIPs lies in the irreparable divide they create in the relationship between the employee and the manager. Once the PIP process begins, this trust divide is rarely repaired. The atmosphere becomes visibly tense and trust begins to erode.
PIPs lead to irreparable breakdown in the relationship
Recent stories of employees feeling unfairly targeted and demoralized and complaints about poor PIP management have highlighted the complexities and challenges inherent in performance management.
These stories serve as cautionary tales, highlighting the potential pitfalls of traditional PIPs and the need for organizations to rethink their approach to managing underperformance.
Even if an employee successfully achieves the goals outlined in the PIP, underlying tensions in the relationship often persist, negatively impacting the productivity and morale of not only the manager and employee, but the entire the team.
I have rarely seen managers more tense than when addressing a PIP. These conditions do not prepare the ground for a productive process. At their core, PIPs should reflect an organization’s commitment to achieving high performance. They should identify areas for improvement, set clear expectations, and provide a roadmap for progress.
A better approach involves a choice
From 1998 to 2004, I was a human resources manager at Cisco Systems, where I discovered a new approach to the traditional PIP process.
Before I arrived, Cisco had recognized that something was wrong with the PIP process. The HR team conducted an in-depth analysis of PIPs across the company and made a fascinating discovery: Most people placed on PIPs left the company within a year, regardless of whether their performance deteriorated. improved or not.
They spoke with many employees who survived their PIP and improved their performance but still chose to leave, and the story they heard had a similar refrain. Employees felt that their managers were not really supportive of them, that they no longer felt like they were in a safe working environment, and that many felt humiliated and deeply hurt by the process.
Listening to data and listening to employees, the HR team has developed a new approach which involves choices. Employees whose performance did not reach an acceptable level were offered two options:
Enter a PIP and try to improve it, or
Mutually agree to part ways with the company and receive a higher severance package than if they failed the PIP.
By presenting this alternative path to employees, Cisco enabled them to make decisions tailored to their personal situation. This approach also reduced stress for managers, allowing them to focus on other priorities. Conversations became more constructive and employees appreciated having a choice rather than feeling stuck in an impasse.
Questioning conventional practices
In the years since I left Cisco, I have introduced this alternative approach to other organizations, contributing to healthier cultures and more constructive environments.
Performance evaluation is inherently subjective and no process can eliminate all conflicts or unexpected reactions. However, offering employees a choice rather than a one-way ticket to a PIP can lead to more positive outcomes and healthier work environments.
As HR professionals and organizational leaders, it is our responsibility to challenge conventional practices and explore innovative solutions. By rethinking performance management and adopting alternative approaches, we can create a culture of trust, transparency and continuous improvement in which employees and organizations thrive.
Steve Cadigan is a talent advisor to leaders and organizations around the world. He specializes in helping businesses develop talent management strategies for the modern workplace.
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