A Performance Improvement Plan (PIP) is a formal tool used to address employee performance or behavioral issues. For small and large organizations alike, a PIP outlines deficiencies, clarifies expectations, and provides a structured timeline for improvement. While PIPs can be effective, employers must ensure the process is fair, well-documented, and—most importantly—lawful.
What Is a Performance Improvement Plan?
A Performance Improvement Plan is typically a written document that identifies specific concerns, establishes measurable goals, and sets expectations for future performance. The purpose is to give employees a fair opportunity to improve while helping employers manage risk and maintain consistency in disciplinary actions.
When implemented correctly, a PIP promotes accountability and provides clarity for both employees and leadership.
Lawful Reasons for Implementing a PIP
Before placing an employee on a Performance Improvement Plan, employers must have a valid, nondiscriminatory justification. Common lawful reasons include:
- Ongoing poor performance
- Attendance issues
- Behavioral concerns that violate policy
- Failure to meet productivity or quality standards
However, a PIP is not appropriate for severe misconduct—such as violence, theft, harassment, or other zero-tolerance violations.
Unlawful Reasons for a PIP
An employer may not place an employee on a PIP because of:
Protected Characteristics
It is unlawful to discipline an employee based on characteristics protected under federal laws, including:
- Race, color, sex, national origin, religion (Title VII)
- Disability (ADA)
- Age 40+ (ADEA)
- Genetic information (GINA)
- Military status (USERRA)
Protected Leave
A PIP cannot be issued because an employee:
- Takes FMLA leave
- Requests USERRA military leave
- Files a workers’ compensation claim
- Requests pregnancy or disability accommodation
- Uses short-term disability leave
Protected Activities
Employers also cannot issue a PIP in retaliation for:
- Whistleblowing
- Filing a discrimination complaint
- Reporting wage violations
- Participating in union organizing activity
Reducing Legal Risks When Using a PIP
Even when a PIP is justified, employers must be careful. Employees may still interpret a PIP as retaliatory if:
- They recently requested an accommodation
- They recently filed a complaint
- They engaged in protected activity (e.g., union organizing)
To reduce risk:
✔ Document everything
Clear, consistent, and timely documentation provides critical evidence if an employee later claims unfair treatment.
✔ Apply policies consistently
Uneven application of PIPs across employees can create claims of discrimination.
✔ Communicate clearly
A PIP should never be a surprise. Managers should have prior conversations and provide supportive guidance before formally issuing a plan.
✔ Set realistic expectations
Goals should be attainable and measurable, ensuring employees have a fair chance to succeed.
Placing an employee on a Performance Improvement Plan can be an effective strategy for addressing performance issues—when handled correctly. Employers should always ensure the PIP is grounded in legitimate business reasons, aligned with workplace policies, and free from any suggestion of retaliation or discrimination.
Feel free to reach out to us for guidance on creating, reviewing, or implementing a lawful and effective PIP process. We are here to support your organizational success.