Case Study: Should a CHRO Abandon Performance Improvement Plans?
At Barton Creek Technologies, Anna Chen, the chief human resources officer, faces a dilemma over the company’s performance improvement plan (PIP). The PIP was introduced as a supportive tool to rehabilitate struggling employees, but it has become perceived as a punitive mechanism.
An internal audit revealed that only 15% of employees placed on PIPs complete them, while 60% are terminated and 25% go on stress-related medical leave, often not returning. Managers lack the training to implement PIPs effectively, and employees describe the plans as stigmatizing and demoralizing.
Chen is torn between reforming the program into a mentorship-based system—requiring significant investment and cultural change—or leaving it untouched to avoid straining resources and leadership goodwill, especially amid looming acquisitions and tight budgets.
Anna Chen is considering the future of the PIP, weighing the pros and cons of reforming or abandoning it.
- Only 15% of employees complete PIPs
- 60% are terminated after being placed on PIPs
- 25% go on stress-related medical leave
Author's summary: CHRO Anna Chen must decide whether to reform or abandon the company's performance improvement plan.