Do Performance Improvement Plans (PIPs) Work?
The answer depends significantly on context, intent, and execution. Research suggests that while PIPs can be an effective tool for performance improvement, they are often misused or misunderstood—frequently becoming a mechanism for managing someone out rather than supporting development.
1. When PIPs Are Effective
Development-Focused PIPs Can Improve Performance
When designed and implemented with a developmental intent, PIPs can:
Clarify expectations for performance and behavior.
Provide structured support such as training, mentoring, or coaching.
Enable performance recovery, especially when the issues stem from communication gaps, unclear expectations, or insufficient feedback.
2. When PIPs Are Ineffective (or Harmful)
️ Common Failings of PIPs:
Used as a precursor to dismissal: Many PIPs are initiated not to improve performance but to build a legal paper trail for termination.
Lack of psychological safety: Employees often perceive a PIP as a betrayal or an attack, especially if it’s delivered abruptly or without clear justification.
Poor design: Vague goals, arbitrary timelines, and lack of managerial support can doom a PIP from the outset.
Supporting Research:
In a survey of HR professionals less than 20% believed PIPs improved employee performance, while 77% said they were primarily used to document performance issues for termination.
A Leadership study found that 87% of employees on a PIP ultimately left the organization, either through resignation or termination. The same study also showed that PIPs often lowered engagement and increased mistrust among remaining team members
Gartner reported that traditional performance management systems—especially punitive ones—decrease employee engagement by up to 20%, particularly when they are perceived as top-down or one-sided.
3. Psychological and Cultural Dynamics
Locus of Control and Trust:
Employees’ reactions to PIPs often depend on how much control they feel over the situation. If the plan is collaborative and includes check-ins, feedback loops, and resource support, trust can be maintained or even strengthened. According to Dr. Teresa Amabile (Harvard), “progress is the most powerful motivator.” Small wins and daily feedback fuel engagement far more effectively than threat-based systems
4. Summary Table: Developmental vs Punitive PIPs
Table
| Feature | Developmental PIP | Punitive PIP |
|---|---|---|
| Intent | Retain & develop employee | Exit employee with legal cover |
| Tone | Collaborative, supportive | Legalistic, disciplinary |
| Engagement | Transparent & trust-building | Fear-inducing, disengaging |
| Outcome | Improvement & growth | Resignation or dismissal |
| HR View | Performance enhancement | Risk management & documentation |
5. Final Considerations
When PIPs should be used:
When expectations were previously unclear or shifting.
When the performance issue is skills-based or circumstantial, not behavioral or cultural.
When the organization is willing to invest in support, feedback, and coaching.
When PIPs shouldn’t be used:
As a fast-track to dismissal or “going through the motions” for HR/legal reasons.
When trust is already broken, and the employee is unlikely to feel safe engaging with the process.
Without a clear pathway to success (i.e., “what good looks like” and how to get there).
Recommendations for Improving PIPs
Rename them: “Performance Development Plans” (PDPs) or “Growth Plans” can reduce fear and stigma.
Focus on mutual expectations, not one-sided critique.
Combine with coaching, peer support, or mentoring.
Include SMART goals, regular reviews, and a success roadmap.
Address not just “what isn’t working,” but “how to get back on track.”