Performance Consulting

The Exit Route

Share on FacebookShare on LinkedInTweet about this on TwitterEmail this to someone

Is a Performance Improvement Plan (PIP) an exit route to terminate underperforming employees? What is the leader’s role in this process? Read on.

Making profits for stake holders is one of the prime objectives of running a business. When employees don’t perform well they are put under PIP and very few of them successfully complete it. Organisations can expect to benefit from both recruitment and termination of employees. Does this hold good for employees also? Do they get benefitted by getting terminated? I would say yes.

Employment is a long term contract, like marriage, where both the parties are accountable for choosing and have duties to deliver. Like all other contracts, employment also can come to an end. Organisations can’t afford to retain underperforming employees for longer durations. Both recruitment and termination comes at a cost to organisations.  Termination is a severe blow to an employee’s career and financial status.

You know the impact of employee underperformance on the organisation. Do you hold the leaders accountable for:

  • Recruitment?
  • Providing support to build capability?
  • Predicting underperformance?

If you are not certain about your answers, check if the following situations exist in your organization:

a) Your leaders blame the HR team for wrong recruitment

b) They crib that the training programs are ineffective

c) They react to underperformance only at the end of a quarter

d) PIPs only talk about how much extra time they are giving to the team members and what targets are to be achieved in that period

If one or more of the above situations exist in your organisation, you have a serious challenge at hand. Let’s deep dive in to each of the listed situations.

Situation (a) is an indication of leaders not taking ownership of recruitment. Your organisations recruitment process may not demand the leaders to document why they recommend a candidate for a given position.

Situation (b) – They are not accepting accountability of making an employee productive. It is the duty of the reporting manager to share knowledge and provide on-the-job support to build capability. If the managers are not capable, it is close to impossible to make employees job ready.

Situation (c) – They don’t have the capability to predict underperformance. Their reviews are focusing only on numbers and don’t cover the other factors that impact performance.

Situation (d) – The above stated shortcomings could converge in to preparing such a PIP. Having spent 3+ months in your system, the employee already knows what target has to be achieved. The challenge is that she doesn’t know HOW to achieve it. If the PIP is not focusing on the ‘How’ part, then it doesn’t hold any water.

The Role of Leaders in PIPs

PIP is not an exit route to terminate underperforming employees. PIP is the last hope to make the employees productive. Let’s look at leaders’ role in PIP:

  • The leaders must be made accountable for number of employees being put under PIP
  • They must be made accountable for number of employees who successfully clear PIP
  • They must be made accountable for showing how to accomplish the PIP
  • The leaders must be monitored and reviewed for their team’s PIPs

The most powerful influencing quality of a leader

The most powerful influencing quality of a leader is the genuine love she has for the wellbeing of her team members. If the leader learns to use the PIP with the intent to improve the team members’ performance, the team members, even if they hate the decision, will identify the intent and give their best shot.

Can employees benefit from PIPs?

Sometimes employees don’t align their values with the organisation’s values. You know that value systems don’t change just like that. A shock can help employees realign their values and PIP is one such tool to provide the shock.

An employee’s underperformance in your organisation doesn’t mean that the person is a failure. Nobody is cut to fail. The reason for underperformance could be as simple as your organisation’s culture. Sometimes plants grow well when they are planted in a different soil. If the leader is accountable for recruiting potentials, she is also accountable for sending the employee out at the right time. This decision at the right time can be harsh on the employee, but at the same time it will help the employee to find a suitable job and make the best out of it.

Subscribe to Prashna

Subscribe to Prashna

Manoharan Rathinam


A Thought Leader at Prashna and a nature enthusiast at heart, Mano has invested nine years in to Sales & Marketing Management and over nine years in the Human Resource function. His raison d'être can be summed up in one statement – to make people see their hidden potential. While he isn't nurturing and working towards accomplishing this dream, you'd probably find him scuba-diving or paragliding some place.


brings together great experience,

expertise & belief

View our Services
Call + 91 93201 75229
Ask Prashna

Connect with us