WSJ Derides PIPs, But It's Only Partly Accurate

A recent Wall Street Journal piece (“Corporate America Has a New Favorite Way to Fire People. It’s the PIP,” WSJ Weekend Nov 30-Dec 1, P. B5), reviewed the use in corporate America of performance improvement plans (or “PIPs”), and did not like them at all.? The PIP is hardly new; the Journal’s copy editor should have changed the angle of the story from “new tactic-a dubious HR innovation” to “after a decade plus, is it worth anything?”? ?Even the article explains that PIPs originated in the early 80s.

In any event, while the article zeroes in on the usual complaints, what is news is that a national newspaper batting from the right side of the plate has run a story that harshly criticizes PIPs as abuses of company power.

Historically PIPs are a logical result of the shift from unionization, and its collective employee relations and grievance processing, to individual relations and employment laws that have increasingly secured more rights to employees as individuals.? As the industrial relations manager function over time gave way to the personnel manager and then the HR team, documentation and assessment of performance became more vital within business organizations.? When an employee was lousing up and became a problem performer, documentation rose in prominence as a means of defending that person’s attack in court or at the EEOC (failure to hire, failure to promote, failure to keep employed).

Performance tracking in the non-union environment had to evolve and become more complicated as the discrimination, whistle blower, and other employee rights laws proliferated.? When a worker’s performance failed to improve or had continued to deteriorate, the PIP was adopted as one form of a “one last chance” process.

The performance improvement plan has become a formality beyond the more blunt warning that if the employee didn’t get with the program he or she would be let go.? The PIP sets specific timetables and usually describes, in detail, specific things the employee has to do to succeed with the PIP.? The employee’s manager dedicates time, e.g., each week, to working with the employee and providing support to help avoid a dismissal.? All of this was intended to show a willingness to give the employee an opportunity one last time.

The WSJ article went down the list of problems with PIPs, most of which should be familiar to readers:? 1) everyone knows they’re a charade, 2) those receiving them are better off quitting rather than wasting time chasing impossible standards, 3) the PIPs are often written in a form of grad school high-biz gibberish and euphemisms, 4) they’re “used primarily to provide legal cover from employment lawsuits,” and 5) they arise because problem managers don’t set expectations in a timely manner, and by the time the PIP happens, the employee can’t possibly muster the energy and fortitude to meet its goals.

Although much of the WSJ's information, gathered anecdotally from several in the people management world, is inaccurate and misleading, the article implicitly makes some important points about how to manage performance problems that precipitate a performance improvement plan.

First, the manager and HR should not think seriously about implementing a formal last chance document until the stated expectations for the job have been clearly communicated and the individual has, over time, come up short.?

Second, a PIP should rely on clear, concise, and convincing text.? As Churchill put it, “older words are better, and little words are best.”? The more a PIP reads like a corporate mission statement, as tempting as that might be, the less digestible in the hands of a juror or an EEOC investigator. And often under the eyes of the target worker.

Third, a guideline in the personnel management business is that over-stating and over-documenting can be counter productive.? It can generate “ammunition” for litigants who as a result of the prolixity have more to fight about.? A PIP should not be long-winded and the follow-up e mails by the manager over the course of the PIP should be to the point.

Finally, if the sense is that there is a mistrust of PIPs in the organization, seriously consider the either-or approach of a) go on the plan for ninety days or b) take a severance package now.? Or, if your experience as an organization is that most who go on a PIP fail, simply phase out the plan approach entirely.? Back to basics documentation of performance problems, written in plain English, and appropriately timed counseling efforts (and warnings) can be more trustworthy and straightforward than a personnel management tool that is viewed with suspicion.