[Aside: I strongly considered titling this post “Big PIP’in” or “PIP’in Ain’t Easy” but just couldn’t bring myself to do it. With time, I may even delete this insert. But if you’re reading this, you know.]
In our second episode of Forces at Work – I’m on a Motherf’ing PIP!? - we ponder how frequently Performance Improvement Plans (PIPs) were actually successful. A friend came to our rescue and wrote in with this fascinating anecdote:
“I did analysis on the outcomes of PIPs at Company XYZ [50K+ employees] when I was in people analytics:
1/3 people took the ‘PIP opt out’— was basically automatic severance without the pain of going through the PIP,
1/3 people failed [and were fired],
1/3 people recovered, but were much more likely to exit the company within the year.
Bottom line, PIPs are, at almost every organization I’ve been at, a legal/HR step taken before managing someone out for performance. Even when someone passes a PIP, the likelihood of successful long term performance at the company is very low.”
This "rule of thirds" isn't just a statistical curiosity. It's a damning indictment of how organizations approach performance improvement, and it raises uncomfortable questions about what PIPs really accomplish. When even successful completion of a PIP correlates strongly with eventual departure, we're forced to confront a difficult truth: PIPs aren't functioning as improvement tools at all. They're serving as legal and procedural stepping stones toward exit.
Our friend of the show followed up with a pair of questions:
What makes it so hard for managers to give performance coaching before it gets to the point of a PIP?
Why aren’t they having the hard conversations that need to be had along the way?
I imagine three broad reasons:
First, there's "improvement optimism"—managers hope small performance issues will self-correct to avoid the emotional labor of addressing them. This belief is reinforced by occasional, self-resolving issues, creating selective memory that justifies avoidance.
Second, most systems discourage early intervention. Formal performance conversations require burdensome documentation, HR involvement, and time, which feels excessive for "minor" issues. Managers raising early concerns often face pushback about whether the issue is serious enough, incentivizing delay until problems worsen.
Finally, initiating performance conversations often exposes gaps in the manager’s leadership, like unclear expectations or inadequate support. To avoid this self-revealing dynamic, many managers steer clear of these discussions.
While these managerial barriers are real and significant, they're symptoms of a deeper organizational pathology. The fundamental problem lies not in individual management failures, but in how organizations conceptualize performance improvement itself. If you're doing well, you operate under broad goals, KPIs, and OKRs. Paradoxically, it's only underperformance that warrants timely, granular metrics and support — exactly when trust and autonomy are most strained. The initiation of a PIP doesn’t mark improvement—it signals the beginning of the end.
Consider the implicit message of current systems: specific, targeted metrics and timelines for improvement are only necessary when something's wrong. This creates a binary where you're either performing adequately or you're in trouble. It's a framework that ignores the continuous nature of professional growth and the reality that everyone, from entry-level employees to senior executives, has areas for development.
This brings us to a provocative proposition: What if everyone was always on a PIP?
Evergreen performance improvement plans would transform targeted development from a rare ultimatum into daily practice. They would reframe conversations about improvement from punitive measures into natural rhythms of professional life. This isn't just theoretical – organizations that embed continuous improvement into their culture, rather than treating it as a response to failure, consistently report higher engagement and retention (Irani & Sharp, 1997; Randolph et al., 2012; Glover et al., 2015; Galli, 2018; Featherall et al., 2018; Bhattacharya, 2023).
Critics might argue this would dilute the significance of serious performance issues or create unnecessary bureaucracy. But these objections reveal how deeply we've internalized the punitive model of performance management. When improvement is truly normalized, addressing serious performance gaps becomes easier, not harder, because the foundational mechanisms for support and development are already in place.
The real challenge lies not in the mechanics of implementation, but in shifting organizational mindsets. It requires rejecting the binary of "performing/underperforming" in favor of seeing performance as a continuous spectrum where everyone has room to grow. It means training managers to have regular, meaningful development conversations that aren't triggered by failure but by possibility.
The data from Company XYZ isn't just telling us that PIPs are failing – it's showing us that our entire approach to performance management needs fundamental reimagining. When two-thirds of PIP situations end in immediate or eventual departure, and the remaining third correlates strongly with exit, we're not looking at a tool that needs fine-tuning. We're looking at a system that needs wholesale transformation.
The question isn't whether your organization will need to rethink its approach to performance improvement, but when. As we continue to evolve our understanding of professional development and organizational effectiveness, the companies that thrive will be those that move beyond punitive, crisis-driven improvement models toward cultures of continuous growth.
The future of performance management isn't in better PIPs – it's in elevating them from last resort ultimatums into common practice.
That's it for this edition - please reach out if I can be at all helpful.
Be compassionate and intentional.
References:
Irani, Z., & Sharp, J. M. (1997). Integrating continuous improvement and innovation into a corporate culture: a case study. Technovation, 17(4), 199-223.
Randolph, G. D., Stanley, C., Rowe, B., Massie, S. E., Cornett, A., Harrison, L. M., & Lea, C. S. (2012). Lessons learned from building a culture and infrastructure for continuous quality improvement at Cabarrus Health Alliance. Journal of Public Health Management and Practice, 18(1), 55-62.
Glover, W. J., Farris, J. A., & Van Aken, E. M. (2015). The relationship between continuous improvement and rapid improvement sustainability. International Journal of Production Research, 53(13), 4068-4086.
Galli, B. J. (2018). Importance and impact of culture and people in continuous improvement. International Journal of Sociotechnology and Knowledge Development (IJSKD), 10(4), 13-44.
Featherall, J., Chaitoff, A., et al. Creating a Culture of Continuous Improvement in Outpatient Laboratories: Effects on Wait Times, Employee Engagement, and Efficiency. American Journal of Medical Quality, 34(4), 389-397
Bhattacharya, S. (2023). Building a culture of feedback: The key to unlocking employee engagement. International Journal of Science and Research (IJSR, 12(4), 472.
I think that things like MBOs are management by numbers and PIPs are probably similar. If managers could cultivate honest, trusting relationships with staff, they could learn about strengths and weaknesses of individuals and help them long before a PIP becomes necessary.