Performance Improvement Plans (or PIPs) often spark intense debate. Are they legitimate tools to help struggling employees succeed—or thinly veiled strategies to protect employers in court?
The answer, say employment attorneys Mari Bonthuis and Richard Reice, depends on intent, execution, and context.
To unpack the issue, Synergy HR invited Bonthuis and Reice—both partners at Sterlington and longtime friends of Synergy—to share their insights.
Their candid conversation reveals the dual nature of PIPs: part opportunity, part liability.
The Origin of PIPs
“PIPs were designed with the best of intentions,” explains Richard Reice. “Their genesis can be traced to progressive discipline provisions in union labor agreements that required just cause for dismissal and mandated verbal warnings, written warnings, suspensions, and—if no improvement—discharge.”
For non-union environments, PIPs were meant to provide clear notice and a chance to improve performance before termination. But, as Reice notes, depending on the employer and manager, “a PIP can equate to a pink slip or one last opportunity for success.”
Why Many PIPs Fall Short
Mari Bonthuis points out that while PIPs work well in settings with clear metrics—like manufacturing or hospitality—they are harder to apply to modern, often ambiguous job roles.
“Historically, union jobs have concrete metrics,” she says. “Are car parts coming off the line on time? Are hotel rooms cleaned before check-in? Compare that to roles like ‘SVP, Health Innovation’ or ‘Change Management & Strategy Lead.’ Defining clear, measurable goals is much trickier.”
Frequent reorganizations compound the problem. Employees often have titles that don’t match their day-to-day responsibilities, and their supervisors may have inherited teams without sufficient training in performance management.
This lack of alignment makes it difficult to create meaningful improvement plans.
PIPs as Legal Shields
The rise of discrimination laws has also shaped modern PIP culture. According to Reice, PIPs serve an evidentiary role for employers:
“Employers like PIPs because they force managers to document issues and communicate them. A well-crafted PIP provides notice, shows progressive discipline, and creates a narrative of poor performance. That record becomes the employer’s first line of defense against discrimination claims.”
But this legal focus can backfire. If the PIP contains vague, biased, or disingenuous claims, it may not hold up in court—and can actually make litigation more costly. As Bonthuis cautions:
“Employers think a PIP gives them a defense, but a badly done PIP can simply make litigation more expensive. Ambiguities invite legal scrutiny and prolonged battles over whether the PIP was genuine or a pretext for termination.”
Coming Up in Part Two
How intention shapes PIP outcomes, real-world examples of good and bad PIPs, and practical tips for making them work.
👉 Stay tuned for Part Two: “PIPs in Practice—Getting Them Right.”
Contact Synergy HR For Clarity and Protection Around Developing Effective PIPs for Your Employees
Crafting a thoughtful and effective PIP takes more than a template — it requires clarity, strategy, and a genuine commitment to employee success. If your organization needs guidance developing PIPs that are fair, actionable, and legally sound, our team at Synergy HR can help.
Contact us directly to ensure your performance improvement plans work as effective tools for growth — not liabilities.
