Arthur R. Lehman, L.L.C.

How should a business approach PIPs for employees?

When employees underperform, it can be difficult for employers to know how to handle the situation. The process of hiring, training and otherwise investing in an employee can make it difficult to let an underperforming employee go. In addition, certain legal ramifications of firing an employee may make employers hesitant to take such action. For example, if an employee is at risk of filing a wrongful termination suit in the wake of being fired, employers may feel that they have few options beyond looking the other way in an effort to avoid employment litigation.

Thankfully, a tool known as a “performance improvement plan” may help employers both avoid contentious litigation and avoid having to continually put up with an underperforming employee’s approach. A PIP can aid employers in tracking and documenting a worker’s progress. This documentation can help to hold workers accountable for their performance, to clearly see where they need to improve and to inspire them. In addition, PIPs can serve as evidence of an employer’s efforts and a worker’s actions in the event that litigation is filed by the worker at some point in the future.

Before implementing a PIP, it is generally a good idea for business owners or managers to speak with an attorney about how to do so legally and effectively. If PIPs are not treated in specific ways, they may not serve their purposes as completely and effectively as they otherwise might. For example, noting specific criticisms will likely be more effective on the job and in the courtroom than documenting broad and vague concerns.

Source: Findlaw Free Enterprise, “Performance Improvement Plans (PIPs): 5 Legal Tips for Employers,” Brett Snider, Oct. 3, 2014

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