Performance Improvement Procedures (PIPs)
Employment Legal Services
This guide explains your rights if you're told to participate in a performance improvement plan (PIP). It also offers strategies for negotiating a fair exit settlement and financial compensation. We’ll cover what a PIP means, why it might be required due to “unsatisfactory performance,” and how to leverage this process in your favor during settlement discussions. Sometimes, managers use PIPs to encourage resignations or create a case for “constructive dismissal.” For more details, see our guide on constructive dismissal.
What Are Performance Improvement Procedures?
Performance improvement procedures, also known as capability management or PIPs, often come up when negotiating settlement agreements. These procedures specify how your performance will be managed and assessed over a set period—typically 30 to 90 days. During this time, you have the chance to meet the improvement goals laid out in the PIP.
Understanding Performance Improvement Plans (PIPs)
At the heart of performance improvement procedures is the PIP itself.
This document lists specific, time-bound work objectives or Key Performance Indicators (KPIs) your employer expects you to meet. If your employer believes your work needs improvement, your PIP will include these elements:
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Realistic Goals: Objectives should be realistically achievable.
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Prioritization: Goals should be in order of priority, if applicable.
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Alignment with Role: Goals should match your skills and job duties.
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Measurability: Goals should be measurable and quantifiable.
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Targeting Shortcomings: Goals address specific areas needing improvement.
Example: The University of Cambridge provides a helpful PIP template that includes these kinds of realistic and measurable goals.
Employee Rights in PIPs
As an employee on a PIP, you have rights at every stage. Here’s a summary:
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Pre-Plan: You have the right to know why you were chosen for a PIP. Consider whether it’s fair or if the PIP might be used to set you up for failure.
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During Plan Creation: Ideally, you should participate in creating the PIP. Understanding each goal is essential.
Navigating the PIP Process
Once in a PIP, you might find that some goals are difficult to meet within the time given or beyond your control. In this case, request revisions to the goals. If your employer refuses, this might signal unfair procedures.
Completing the PIP successfully usually means you can keep your job, but sometimes the relationship with your employer may change, affecting your future there. Think about:
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Future Prospects: Do you see a long-term future with this employer?
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Process Impact: Will you feel content in your role after the PIP, even if you succeed?
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Employer Intentions: If your performance is under serious scrutiny, the employer might prefer you to leave.
In this situation, you may choose to either negotiate an exit or stay and work through the PIP.
Understanding Your Employer’s Intentions
If your employer prefers you to leave rather than complete a PIP, HR may schedule a meeting to start the PIP process. In this meeting, HR might have a “without prejudice” or “protected” conversation, suggesting a settlement agreement even before the PIP begins. If you weren’t aware of any issues, you might question the fairness of this process, strengthening your negotiation position. Most employers handle these meetings properly, giving you a choice: accept a financial settlement and leave with a reference, or proceed with the PIP.
Considering Leaving Instead of Undergoing a PIP
From the moment you’re selected for a PIP, you might feel it’s unfair and consider leaving. If both you and your employer see a way to resolve things, an exit settlement agreement might be possible. To achieve this, you can:
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Send a Without Prejudice Letter: Propose that you leave in exchange for a settlement payment.
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Benefits of This Approach:
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Avoid a tribunal claim.
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Use your resignation as leverage in negotiations.
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Reduce management time already spent on the PIP.
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During discussions, highlight that your employer should compensate you for the wages you would have earned during the PIP, along with notice pay and a reference.
Can Performance Improvement Plans (PIPs) Be Discriminatory?
It’s important to question whether PIPs are applied fairly across all employees. In some cases, employers might single out certain employees for a PIP based on characteristics like age, gender, race, disability, or other protected attributes. When a PIP targets specific individuals without fair cause, or disproportionately affects a group with certain characteristics, it could be viewed as discriminatory.
Discrimination in PIPs might look like:
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Selective Targeting: If only older employees or those of a particular gender or race are placed on PIPs, this could indicate a bias that unfairly targets these groups.
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Ignoring Reasonable Adjustments: Employees with disabilities might face extra challenges meeting certain PIP goals. Employers are legally required to make reasonable adjustments to the PIP process for employees with disabilities, such as adjusting targets or timelines.
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Different Standards: When employees in similar roles have different PIP goals or standards, with harsher criteria applied to some, this could suggest unequal treatment that may amount to indirect discrimination.
If you believe a PIP has been unfairly applied to you, or that it’s been structured in a way that discriminates based on a protected characteristic, consider raising these concerns formally. This could involve filing a grievance with your employer or seeking legal advice to understand your rights under discrimination law. You might also want to discuss potential adjustments to the PIP to ensure it’s applied fairly and equitably.
In cases where discrimination is a factor, a PIP could be deemed legally invalid, strengthening your case if you decide to negotiate an exit or pursue a claim for constructive dismissal.
