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Tips for PIPs

In the March 2017 edition of HRlink, the benefits and challenges of using Performance Improvement Plans (PIPs) to manage underperformance in the workplace were discussed. This article will look at the content of PIPs and the introduction of an organisational PIP policy.

Contents of a PIP
PIP documents are generally designed by each employer to suit their needs and will typically contain the following information;
  1. Name of employee and line manager involved
  2. Employee’s job title
  3. Date of initiation of the PIP and its duration
  4. Scheduled dates for meetings between employee and line manager to discuss progress on the PIP
  5. List of the specific areas of underperformance
  6. Goals to be achieved in each of these areas, how performance against these goals will be measured and when the performance against each goal will be measured
  7. Detail on any supports (e.g. training) to be provided to the employee
  8. Statement on the implications of failure to meet the standards set out in the PIP
  9. Statement that employee agrees to the requirements of the PIP
  10. Signature of manager and signature of employee

Companies typically use template PIP documents which contain some standard clauses and can be populated in relation to the points above. The content which goes in to the PIP document will be driven by the job description, the individual employee’s objectives, performance records and any previous discussions with the employee on performance. The content of a PIP must be discussed with the employee face to face to ensure understanding and agreement. Care should be taken to ensure that there is clear evidence of any area of underperformance, that the performance expectations prior to and arising from the PIP discussion are reasonable and that the performance goals in the PIP are reasonable.

On this latter point, it is recommended that any performance goals in a PIP are SMART goals. This commonly used acronym is a helpful approach to ensure that stated goals set for employees clearly communicate the performance expectation. SMART goals are Specific. The goals are clear and unambiguous. SMART goals are Measurable and they contain a number, ratio or description that will make it clear when the goal has been achieved. SMART goals are Attainable. While standards do change, performance goals should be appropriate to the organisation and job holder's role and capabilities. SMART goals are Results orientated and should focus on what is to be achieved and where it fits with the organisation’s objectives. Finally, SMART goals are Time bound and clearly set the timeline for achievement.

When discussing underperformance with an employee, the issue of training or related assistance should be addressed. The reasonableness or otherwise of the employer’s approach to managing underperformance is a key factor in the assessment of unfair dismissal cases. The decision to offer or not offer training and the extent and type of support provided should be carefully considered within the PIP process.

PIP policy
While the PIP template document is the tool that will be used to facilitate and document the PIP discussion with the employee, it is important that PIPs are utilised across the business in a consistent and appropriate manner. This requires that the line manager population understand when and how to use PIPs. It also requires that employees are familiar with PIPs and understand where PIPs sit relative to formal disciplinary action and the implications of failure to meet the goals in a PIP. As with many aspects of the employment relationship a written policy can provide a useful information source on PIPs for both of these audiences and a reference document for induction or training where PIP is covered.

As with any employment policy, great care needs to be taken in drafting such a document. The close connection between PIPs and disciplinary action means that even more care needs to be given as PIPs can lead to initiation of the disciplinary process and can be utilised for an employee who is on a formal warning for underperformance.

It is important to remember that all written company policies set an expectation of how the employer will manage an issue. Very detailed policies can create complications and inefficiencies. It is advised that careful advance consideration is given to the purpose of any PIP policy document. There will be a number of different readers for such a policy. These include employees, line manager, HR team and third parties/representatives.

Key points/sections to include in a PIP policy are
  • Purpose of the document. This sets the tone for the document and this is where it should be made immediately clear that this policy is not part of the disciplinary procedure
  • Scope of policy – to whom does this policy apply
  • Purpose of PIPs – when PIPs will used and when not used
  • Requirements on PIP documentation – who is responsible for filling in the document, maintaining record of discussion and sharing a copy with the employee
  • Duration of PIPs – It is advisable that while a standard timeline for PIPs is adhered to that the employer retain discretion to alter the length of a PIP as circumstances dictate
  • Guidance on PIP meetings between employee and manager – what should be discussed, who attends
  • Implications if performance fails to reach the standards outlined in the PIP
  • A clause that allows the employer to review and amend the policy as necessary and to communicate this to staff when change comes in to effect
  • A clause that states that the PIP policy is not a contractual term

When introducing any new company policy, employers should consider who they may need to consult with including internal staff forums.

Tips
The above is intended as general guidance only and companies are advised to contact Ibec if they have any queries or concerns regarding using PIPs. The intention of a PIP is to provide a structure in which constructive feedback, clear goals and specific support can be given to an employee to assist him/her to improve their performance. PIPs can therefore be a very valuable tool to prevent an issue of underperformance escalating in to a formal disciplinary action. The process of using PIPs may highlight flaws in the system or peripheral issues that need investigation and employers need to be open to addressing any of these matter where they arise. Finally, every case of underperformance should be assessed on its own merits and careful consideration given to the employee’s circumstances (e.g. tenure with company) and to the goals that are set.

In the next edition of HRlink (May 2017) we will feature a review of case law on performance management.


Claire Hellen
HR Strategy Specialist, Ibec

Wednesday, 12 April 2017