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The PIP—Performance Improvement Plan

by David Brock on September 4th, 2014

Three letters, PIP, strike fear into the hearts of sales people and managers alike.

It’s called different things, the PIP, the Performance Improvement Plan, the Measured Mile……  Typically, it’s the final straw in dealing with poor performers.

Frankly, I think they are a pure waste of time and we should get rid of them—at least the way we currently use them!  I can hear HR VP’s moaning, Corporate Counsels thinking “Has this guy every heard of a lawsuit?  Along with the cheering from lots of managers?  And a lot of people who are on a performance improvement plan or have been through one, wondering about my compassion and fairness.

Let me explain why I think PIP’s in their current incarnation are useless.  They are a waste of time for both the manager and the employee.

The problem is, by the time we get to the point of putting a PIP in place, most of the time, the outcome is a foregone conclusion—“90 days and I fire his ass!”  “We’re doing it because HR says we have to do it to be fair, the lawyers say we have to do it to avoid lawsuits, and it’s just what we’ve always done.”

Both the manager and employee dread sitting down and entering the process because we know the outcome–and each is counting the days.  The employee may try to do the plan, at least buying time, the manager goes through the motions.  Each person dreads every meeting, but the manager is carefully documenting things for HR and the lawyers.  At the same time, the employee is brushing up their LinkedIn profiles, perusing the job boards, starting to look for new opportunities, hoping to jump to something as soon as possible.

We waste a lot of time and energy with Performance Improvement Plans, when the outcome is a foregone conclusion  So we should eliminate them!

We should never put someone on a Performance Improvement Plan unless both the employee and the manager are TOTALLY committed to a successful outcome—after all that’s what PIP means–Performance Improvement.

If neither of us believes performance improvement is possible, we’re just wasting each other’s time.  To me, the solution is, buy the person out.  If both of you aren’t totally committed to a successful outcome, give them 3 months–even 4 months salary.  Tell the employee they can spend that time more effectively looking for a new job.  Instead of waiting or the inevitable but still “working,” struggling but counting the days until it happens–give the employee the time to start finding a new job.  As a manager, save yourselves the time, the hassle, and ill-will.  Spend your time where you can have greater impact.  Let go and let each person move on.

When I talk to managers about this idea, some get stingy, “Why should I pay this person?”  My response, “You’re going to pay them anyway.  They are still on the payroll for the duration of the plan.  Then you’ll probably pay some sort of termination settlement.”  Then I add, “Think, also, of the amount of time you are going to spend, knowing you have a predetermined outcome. Why waste your time when you already don’t believe there will be a successful outcome?!?”

It’s a real lack of respect for the individuals involved and for the performance planning process to enter into a PIP with a predetermined outcome.  If you know the outcome, why do you respect them so little to play this game?

When I talk to employees about it, I ask, “Do you think you can really achieve the goals that have been outlined in the plan?”  Some are hopeful, but when upon further discussion, many see the plan as unrealistic and unachievable (it may be, sometimes managers do that), or they are really worried, they don’t want to be without a job.  I get it, being fired is terrifying.  But if that’s the inevitable conclusion, based on the attitudes of both the manager and the employee, isn’t it better to end things now?  Isn’t it better to take the time, regroup, and spend 100% of your time finding the right opportunity.  I tell them, “take the money now, walk away, spend your time getting a new job rather than being frustrated on something that has little chance of a positive outcome.”

Now here’s the scary part of the discussion, I like PIP’s, they are very powerful, but only when each person (and the rest of the organization) is TOTALLY committed to doing what it takes to achieve a successful outcome.  If we both believe performance can be improved, then we need to be committed to doing the things that drive the improvement.  The individual needs to know what is expected and have a realistic plan, developed with management to achieve the goals.  The manager has to be committed to provide the support, coaching and resources necessary to achieve an the desired outcomes.

Short of this, we are wasting our time.

What do you think?

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8 Comments
  1. Brian MacIver (@Palayo) permalink

    PIP’s are a major weakness in Sales Management. It’s worth stating that PIP’s [improvement plans] differ from PDP [Development plans]. PIP’s are formal, written, reprimands and should be part of the Managing UP or OUT process.

    PIP’s apply to ANYONE performing below 80%, and EVERYONE performing below 50% of agreed Targets.

    PDP’s, the Personal Development Plan, apply to EVERYONE. These identify areas of likely improvement and should NEVER be formal, or reprimands. They should be joint, agreed and part of Coaching as usual.

    ALL Salespeople should be constantly improving. If they are NOT Increasing, then they are decreasing. It’s important for Sales Managers to be able to use both PIP’s and PDP’s appropriately.

    PIP’s do NOT work when they are Performance “Outcomes” based.
    “You will achieve XX% Revenue, by this date or ELSE!”

    They sometimes work if they are ‘behaviourally based’, or input based. The Sales Manager IS responsible for identifying the poor behaviours, and suggesting the ‘to be improved’ behaviours.

    This can only be done by DIAGNOSIS,
    which presents many Sales Managers with a problem,
    they do NOT know how to IDENTIFY ‘failing behaviours’.

    I have read hundreds of PIP’s
    [more importantly I have written quite a few!].
    The most common ‘diagnosis’…Make more Calls!

    Now the logic here is poor, since if the problem is Sales Skills, and NOT activity, the Salesperson will simply make MORE poor Sales Calls!

    Rarely, do I see Product Knowledge on the PIP,
    yet when I give Product Knowledge Tests to Poor Performers, they consistently score poorly!

    Sometimes, the PIP is given to a previous High Performer, yet it rarely diagnoses if the problem is a failure to change Sales Strategy. Instead it focusses on Activity, or Sales skills.

    The best PIP’s look at five areas:
    Skill, Knowledge and Activity first;
    then Sales Strategy and Sales Attitude.

    The Best PIP’s are DIAGNOSES based, and BEHAVIOURALLY, not outcomes focussed.

    Where I disagree, possibly, with Dave is in Sales Manager TIME usage. The Sales Manager’s Key resource, their TIME, should not be over-used with POOR performers.

    The POOR performer OWNS their problem.

    The Sales Manager writes the PIP and MEASURES Changes, the Sales Person does the Heavy Lifting.
    [This does not apply to Sales Trainees]

    http://brianmaciver.blogspot.com.es/2010/09/how-long-do-we-as-sales-managers-accept.html

    • Great comment Brian. PDP’s are critical–subject of another post, too few managers put them in place (it’s their responsibility to help each person develop to their full potential).

      Most PIP’s I see are doomed for failure from the outset–that’s because they focus on the wrong things, eg, Achieve XX% Revenue (as you state). If a person could do that, then there would be no need for the PIP. The areas you discuss are vital, again usually ignored.

      We probably will agree to disagree with Management time. If we are committed to a successful outcome, the person will need more coaching, attention.

      That’s why we don’t want to enter into them, unless we both believe it’s likely to have a successful outcome.

      Thanks for the great comment, as always. Regards, Dave

  2. John Sterrett permalink

    It cracked me up. There was a young guy, eager to climb the corporate ladder, promoted from among his peers to Field Sales Manager. I had had 15 years management experience in my previous career, prior to moving into technology, so I had read my share of books on effective management.

    This guy put me on a PIP, even though I had delivered 100% to plan or more 15 of the previous 18 months!

    The goals he set were below what I was already achieving. He gave no real ideas on what needed to be improved. Then I saw it – a 150-page paperback on his bookshelf, dog-eared, and with 5 or 6 post-it notes sticking out of it. It was his new management bible. I recognized it as one of the ‘trendy’ management-in-a-minute books I had read within the last 10 years, and then I understood.

    The bozo who wrote the book insisted that at any given time, 30% of your sales force should be on a PIP – even if they were already delivering results – in order to drive more results. There were 10 of us Field Sales Reps, so 3 of us got PIPs, 2 of whom were already delivering. Nice for morale, no?

    I just smiled and signed his 60-day action plan, walked out and called HR to verify the steps that would be needed to have it removed from my personnel file later. Sure enough, the FSM was gone to Corporate in a year, and I submitted the proper form to have the black spot removed.

    Last I saw him, he was still in that Corporate Cube pushing paper….

    • The PIP is misused and abused by too many. Ugly story, surprised he wasn’t terminated. Thanks for sharing John.

  3. “The PIP” by David Brock is a Call-to-Action.

    Brock reveals the inconvenient truth that PIPs are embedded in corporate policy because “HR says we have to do it to be fair, the lawyers say we have to do it to avoid lawsuits, and it’s just what we’ve always done.”

    Even though PIP is an exercise in futility, it has the appearance of civility and due-process. It’s the polar-opposite of Glengarry Glen Ross.
    Instead of a scripted PIP, a candid performance review would probably follow the dialogue in this harsh scene from the movie.
    – Moss (PIPee) “We don’t gotta sit here and listen to this.”
    – Blake (PIPer) “You certainly don’t pal, ’cause the good news is – you’re fired!”

    Instead of PIPing or firing, Brock proposes that you “buy the person out.”
    With the exception of HR and lawyers, who would disagree?

    Thank you Dave!

    • Thanks for the great comment Vince! If we enter the PIP process with the outcome as a forgone conclusion, then we are just going through the motions and wasting everyone’s time. It seems there are better ways to manage this–buying the employee out, is one alternative.

  4. C. Lee Smith permalink

    Perhaps EVERYONE should be on a performance improvement plan?

    • Lee: Actually Brian brought it up, we should all have a Personal Development Plan–a plan that focuses on developing our skills to be top performers in our current job and to fulfill our potential. It’s something managers and employees should develop together. It’s something that managers should coach on, train to, and provide great developmental experiences.

      Unfortunately, they seem to be lost in many organizations. Great comment!

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