I’ve never been a fan of Performance Improvement Plans. PIPs are designed to give an employee a chance to improve his performance standards, with a set timeframe for accomplishing goals and specific consequences for failure to do so. Even when used how intended, PIPs are problematic when the employee fails to improve his performance standards, is terminated as a result, and thereafter files for unemployment.

In the Texas Workforce Commission’s world, there’s a distinction between an inability to perform and a failure to perform. An inability to perform to the employer’s standards is not considered misconduct, so if an employee is terminated because of poor performance, he’ll probably be granted unemployment benefits, which means your TWC account will be charged. (Word to the wise: Never cite “poor performance” as the reason for termination, unless you want your TWC tax rate to go up. With this in mind, the name alone – Performance Improvement Plan – militates against its use.)

Another problem with PIPs is that they could be construed as infringing on the employment-at-will relationship, by stating that the employee will be re-evaluated in 30 or 60 or 90 days. This not only gives the impression that the employee is guaranteed his job for the duration of that period, but also infers that no adverse action will be taken in the meantime.

What really makes me cringe is when an employer uses a PIP, not for performance issues, but for disciplinary issues. An effective disciplinary policy of addressing and documenting infractions as they occur, is much more effective than a PIP could ever be. So if you’re using a PIP for disciplinary infractions . . . don’t. If you’re using a PIP to address performance issues, know that you risk ending up with a charge to your TWC account by doing so.

Bottom line: there is nothing that can be accomplished with a PIP that cannot be accomplished without one.