Performance Improvement Plans (PIPs) can be effective tools for addressing performance issues—if they are used properly. Poorly designed or inconsistently applied PIPs, however, can increase legal risk. The following best practices can help employers use PIPs to support improvement while protecting the company.
Use PIPs in Good Faith
A PIP should be a genuine opportunity for improvement, not a pretext for termination. Timing matters—particularly if an employee has recently engaged in protected activity.
Be Specific and Objective
Base the PIP on documented, job-related performance issues. Clearly identify where performance falls short, using measurable standards rather than subjective descriptions. Assume the PIP may be reviewed by a third party. Stick to facts, avoid emotional language, and focus on expectations—not character.
Set Clear Expectations and Reasonable Timelines
Outline concrete goals, how success will be measured, and a realistic timeframe for improvement. Identify any training or resources the company will provide.
Provide Ongoing Feedback
Regular check-ins demonstrate good faith and allow issues to be addressed early. Document these discussions.
Apply PIPs Consistently
Inconsistent use of PIPs can create discrimination risk. Ensure similarly situated employees are treated the same, and involve HR in the review process.
Document the Outcome
At the conclusion of the PIP, clearly document whether expectations were met and the resulting next steps.
Bottom Line
A well-structured PIP supports performance improvement and helps reduce legal exposure. When used thoughtfully, it benefits both employers and employees. If you have questions about implementing or reviewing PIPs, or would like manager training on performance management best practices, please contact our Employer-Lawyer team!
