Everyone Should Always Be on A PIP
Whenever a “Performance Improvement Plan” (PIP) is mentioned at work, people get nervous.
For most companies, the PIP is a final bit of paperwork a manager writes when they’ve already decided to fire an employee – but HR or the lawyers say they need a documented paper trail before they can pull the trigger. “We need to show that we communicated information about performance to justify the termination,” they say, and a set of really difficult objectives are laid out for the employee to achieve. They’re warned that if they’re not able to accomplish them in the next 90 days, they may be fired – and are often offered the chance to just skip the process by signing a confidential separation agreement today that pays them out some sum of money if they waive their rights to sue for wrongful terminatoin.
But I believe we need to radically change that perception. The document is called a performance improvement plan, and our workplaces would be better if we were having regular conversation about continuous growth – outside the threat of firing or scary legalese.
In my companies, I try to implement by making sure managers and employees engage in structured development conversations every 90 days, and memorializing their goals in a re-named “Development Plan” document that they co-create. These aren’t one-sided evaluations but collaborative discussions about what’s working, what isn’t, and what the employee should focus on in the coming quarter.
And they review progress, refine the plan, and repeat the cycle every 90 days as a normal course of business.
For these Development Plans to be truly effective, we have to have started by clearly defining the key skills and competencies required for success in each role. These competencies are the qualitative factors that drive quantitative performance. For sellers, these are the tools and processes that allow them to achieve their quota, like:
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Consultative selling
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Disruptive thinking
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Competitive drive
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Lead generation
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Communication and presentation skills
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Time management and organization
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Curiosity and problem-solving
The best leaders have run an interview process that screens for the key competencies before making an offer, and these same skills should be the ones we continue to evaluate and develop throughout the employee’s tenure in the role.
How to Implement Development Plans
In my book I’ve provided a 90-Day Review Template that can structure these conversations – and it’s available to download for free here. Here’s how I recommend using it:
- Identify Strengths and Opportunities: Encourage the employee’s self-reflection on strengths and areas for improvement, and then respond with your own assessment of these areas before memorializing in the document.
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Define Objectives: Aligning on the employees key objectives for the next 90 days, having a clear conversation about how the employees goals ultimately connect with the company’s overall performance objectives.
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Determine Skills Needed: Pinpoint the specific skills required to achieve those objectives and support career growth, and write SMART goals to strengthen them in the next three months.
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Outline Action Steps: Define concrete actions for skill development, such as training, mentoring, or new assignments.
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Regular Review: Schedule regular check-ins to monitor progress (I love a weekly one-on-one) and provide ongoing feedback.
Development for Today and Tomorrow
Ultimately, making this work requires a fundamental shift in how we view performance management. It’s about moving away from a punitive mindset and embracing a culture of continuous learning and development. By adopting this proactive, development-oriented approach, we can unlock the full potential of our people, drive higher performance, and build stronger, more engaged organizations.
For more Information
Downloadable a Performance Development Template: here.
The CRO’s Guide to Winning in Private Equity: here.
