4 ms·

Formal PIP is a bad idea. Once things are at that point, fire immediately but with severance. A 3-month severance is much cheaper than a 1-month PIP, while this

Formal PIP is a bad idea. Once things are at that point, fire immediately but with severance. A 3-month severance is much cheaper than a 1-month PIP, while this "walking dead" employee pisses all over morale and has divider effects all around him. From the OP: 50% of people who are put on performance improvement plans become repeat offenders. Even when someone recovers from a PIP, they can't transfer internally in most companies-- they're not blocked, but no one wants them-- and the stink never goes away. Promotion is out of the question, too, even 2-3 years later. Good people (wrongly PIP'd, it happens) leave and bad people stay. Most "repeat offenders" on PIPs are people the manager still wanted to fire. HR said "no, we're not willing to take the legal risk of firing this person." PIPs are rarely passed. Either they fail (leading to termination) or are ruled "inconclusive"-- which makes the manager look bad (HR declined his firing request) and more pissed off. The only time PIPs seem to be "successful" is when there's a change of manager (or, if possible, the team). Why do PIPs persist? Two words: externalized costs. An HR department can claim it saved money on severance payments, while the cost is externalized (and multiplied) to that employee's team and manager. It may be counterintuitive that "rewarding failure" is the best strategy, but it's just another cost of doing business.

buckbova 13y ago
> Once things are at that point, fire immediately but with severance. A 3-month severance is much cheaper than a 1-month PIP, Just fire on the spot with no severance. I've never known anyone to go on a PIP and remain at a company. They are either fired "eventually" or they find another job.
- danielweber 13y ago
  Severance takes all legal threat off the table.
- michaelochurch 13y ago
  Just fire on the spot with no severance. Bad play, risk-wise. Severance requires them to sign a non-litigation agreement and usually non-disparagement as well. PIP provides a paper trail and insures you somewhat against lawsuit (but not disparagement)-- they could argue for a "wrongful PIP", but you have paper. I don't recommend going that way, but it is better (risk-wise) than just cold-firing. If you cold-fire, you're taking a major risk. With no severance and no warning, he will be pissed off-- and it's not hard to damage a company's reputation. It's also not as hard as you think to build a termination case, although I'm not getting into the details here. Let's just say that some people (esp. termination lawyers) are as good at playing that game as we are at programming. Even if you win, he can make it a pyrrhic victory. I've never known anyone to go on a PIP and remain at a company. They are either fired "eventually" or they find another job. Agree. I covered that. You're 100% right.
  - nairteashop 13y ago
    This is great advice. Paying severance also helps assuage the guilt many managers have about firing an employee within a few weeks/months after they were hired. ("But he just relocated here", "It will look bad on his resume", etc). By the way, do you know if it is possible for the employee to refuse severance, and therefore retain the rights to litigate? What happens in that case?
    - michaelochurch 13y ago
      By the way, do you know if it is possible for the employee to refuse severance, and therefore retain the rights to litigate? What happens in that case? Of course, it is possible. It's unlikely that he will. Most people want to move on with their careers, not sue an ex-employer. A properly calibrated severance is 1.5-2x the expected length of the job search. Since people on severance are generally able to represent themselves as employed during that time, the job search won't take terribly long.
rayiner 13y ago
> Why do PIPs persist? Two words: externalized costs. An HR department can claim it saved money on severance payments, while the cost is externalized (and multiplied) to that employee's team and manager. Very insightful. I wonder how much silliness in corporate America can be explained in terms of HR externalizing costs to other departments. I'm specifically thinking of the articles always talking about HR blocking good but unconventional hires.
rdl 13y ago
Absolutely agree -- if you combine "fast to fire" (as soon as you've decided) with generous severance, you're probably at the optimal spot. The "HR (outsourced) exists to handle payroll/benefits compliance; founders and line managers deal with everything else for as long as possible" seems like the only way to make this work, though.
bowlofpetunias 13y ago
Unfortunatey, formal PIP is an absolute necessity in countries with strong labor protection laws (i.e., most of Western Europ). You cannot easily fire someone without a big fat dossier that shows you tried, or else the judge or labor authority will simply tell you to try harder. That also makes them even more horrible and useless. Once you start going down this route, everyone knows what the score is, and it's extremely demoralizing. Nobody takes them seriously, and employers often stack the deck so there is no other possible outcome but failure. Which is why many companies choose to offer a shitload of severance pay in exchange for the employee voluntarily "resigning".
- yuhong 13y ago
  Not that I like the design of these laws of course.
gaius 13y ago
A PIP is a stitch up. It's a legal way to do constructive dismissal. Remember the HR department's job is the same as the tax accountant's job: to enable the company's management to sail as close as they can to the legal wind.
joshyeager 13y ago
Manager Tools has an excellent recommendation for this. As soon as you recognize that someone is on a path towards needing to be fired, begin to give intense feedback with the goal of rebuilding their performance. Record all of the feedback, and intentionally spend 3-6 months on the process. You have a chance to turn them around before it's too late and it's more likely to succeed without the pressure of a formal PIP. If you do have to fire them, your documentation should be enough to meet all of HR's requirements immediately. http://www.manager-tools.com/2006/02/how-to-fire-someone-well-almost http://www.manager-tools.com/2006/02/how-to-fire-someone-wel...

buckbova 13y ago

> Once things are at that point, fire immediately but with severance. A 3-month severance is much cheaper than a 1-month PIP, Just fire on the spot with no severance. I've never known anyone to go on a PIP and remain at a company. They are either fired "eventually" or they find another job.

danielweber 13y ago
Severance takes all legal threat off the table.
michaelochurch 13y ago
Just fire on the spot with no severance. Bad play, risk-wise. Severance requires them to sign a non-litigation agreement and usually non-disparagement as well. PIP provides a paper trail and insures you somewhat against lawsuit (but not disparagement)-- they could argue for a "wrongful PIP", but you have paper. I don't recommend going that way, but it is better (risk-wise) than just cold-firing. If you cold-fire, you're taking a major risk. With no severance and no warning, he will be pissed off-- and it's not hard to damage a company's reputation. It's also not as hard as you think to build a termination case, although I'm not getting into the details here. Let's just say that some people (esp. termination lawyers) are as good at playing that game as we are at programming. Even if you win, he can make it a pyrrhic victory. I've never known anyone to go on a PIP and remain at a company. They are either fired "eventually" or they find another job. Agree. I covered that. You're 100% right.
- nairteashop 13y ago
  This is great advice. Paying severance also helps assuage the guilt many managers have about firing an employee within a few weeks/months after they were hired. ("But he just relocated here", "It will look bad on his resume", etc). By the way, do you know if it is possible for the employee to refuse severance, and therefore retain the rights to litigate? What happens in that case?
  - michaelochurch 13y ago
    By the way, do you know if it is possible for the employee to refuse severance, and therefore retain the rights to litigate? What happens in that case? Of course, it is possible. It's unlikely that he will. Most people want to move on with their careers, not sue an ex-employer. A properly calibrated severance is 1.5-2x the expected length of the job search. Since people on severance are generally able to represent themselves as employed during that time, the job search won't take terribly long.

rayiner 13y ago

> Why do PIPs persist? Two words: externalized costs. An HR department can claim it saved money on severance payments, while the cost is externalized (and multiplied) to that employee's team and manager. Very insightful. I wonder how much silliness in corporate America can be explained in terms of HR externalizing costs to other departments. I'm specifically thinking of the articles always talking about HR blocking good but unconventional hires.

rdl 13y ago

Absolutely agree -- if you combine "fast to fire" (as soon as you've decided) with generous severance, you're probably at the optimal spot. The "HR (outsourced) exists to handle payroll/benefits compliance; founders and line managers deal with everything else for as long as possible" seems like the only way to make this work, though.

bowlofpetunias 13y ago

Unfortunatey, formal PIP is an absolute necessity in countries with strong labor protection laws (i.e., most of Western Europ). You cannot easily fire someone without a big fat dossier that shows you tried, or else the judge or labor authority will simply tell you to try harder. That also makes them even more horrible and useless. Once you start going down this route, everyone knows what the score is, and it's extremely demoralizing. Nobody takes them seriously, and employers often stack the deck so there is no other possible outcome but failure. Which is why many companies choose to offer a shitload of severance pay in exchange for the employee voluntarily "resigning".

yuhong 13y ago
Not that I like the design of these laws of course.

gaius 13y ago

A PIP is a stitch up. It's a legal way to do constructive dismissal. Remember the HR department's job is the same as the tax accountant's job: to enable the company's management to sail as close as they can to the legal wind.

joshyeager 13y ago

Manager Tools has an excellent recommendation for this. As soon as you recognize that someone is on a path towards needing to be fired, begin to give intense feedback with the goal of rebuilding their performance. Record all of the feedback, and intentionally spend 3-6 months on the process. You have a chance to turn them around before it's too late and it's more likely to succeed without the pressure of a formal PIP. If you do have to fire them, your documentation should be enough to meet all of HR's requirements immediately. http://www.manager-tools.com/2006/02/how-to-fire-someone-well-almost http://www.manager-tools.com/2006/02/how-to-fire-someone-wel...