Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / Why Performance Improvement Plans Fail Companies
Transcript
- Lucas: There is a specific kind of dread that sets in when a manager tells you they are putting you on a Performance Improvement Plan. It is not just about the work; it is about the implication that your time here is numbered. For decades, the standard playbook has been straightforward: identify underperformance, set a ninety-day deadline, document every failure, and if the employee does not magically transform, part ways. Luna: But that playbook assumes that performance issues are always clear-cut failures of effort or skill, rather than symptoms of misalignment or external blockers. Lucas: Exactly. And the problem is that by framing improvement as a binary pass-fail test with an arbitrary expiration date, we often destroy the very psychological safety required for someone to actually improve. When you are fighting for your job, you stop taking risks. You stop innovating. You just try to survive until the clock runs out. Luna: So we end up retaining the safest, most mediocre performers while pushing out anyone capable of growth who just needed a different support structure. Lucas: Right. Let us look at the mechanics of the traditional PIP. Usually, it starts with a meeting where the manager presents a list of deficiencies. The employee signs a document acknowledging they need to hit specific metrics within three months. If they miss one metric by five percent, the plan is failed. It is incredibly brittle. It treats complex human output like a manufacturing defect. Luna: And yet, HR departments love it because it provides legal cover. It creates a paper trail that proves the company tried everything before termination. Lucas: That is the cynical view, and it is partly true. But I think the deeper issue is managerial incompetence. Most leaders have never been trained in how to coach. They see a dip in output, they get anxious, and they reach for the only tool they know: the formal warning. They are using a sledgehammer to fix a watch. Luna: It is also worth noting that the timeline itself is often unrealistic. Learning a new software stack or adjusting to a changed market dynamic rarely happens in ninety days of linear progress. Lucas: Yes. Skill acquisition is not linear. There are plateaus, there are breakthroughs, and there are setbacks. A rigid ninety-day window ignores the biological and cognitive reality of how adults learn. It forces a false sense of urgency that leads to burnout or gaming the system. Employees will find ways to make their numbers look good on paper without actually improving their contribution to the business. Luna: Which means the manager walks away thinking the problem is solved, when in reality, the underlying capability gap is still there, just masked by short-term metrics manipulation. Lucas: Precisely. So what is the alternative? Some forward-thinking organizations are moving away from the term 'PIP' entirely. They call it a Performance Support Plan or a Development Agreement. The language shift matters because it signals collaboration rather than punishment. But more importantly, the structure changes. Instead of a fixed deadline, it becomes a series of monthly check-ins with adjustable goals. Luna: So it becomes iterative. You assess progress, adjust the scope based on what you learn, and remove obstacles rather than just documenting failures. Lucas: Exactly. It shifts the focus from compliance to enablement. The manager’s job is no longer to police the employee, but to ask, what do you need from me to succeed? Is it clearer priorities? Is it access to better data? Is it protection from other team members’ noise? Luna: That requires a lot more emotional intelligence and time investment from the manager. Not everyone is equipped to do that level of nuanced coaching. Lucas: True. And that is why this is such a hard sell for companies focused solely on quarterly efficiency. Coaching is slow. It is messy. It does not fit neatly into a spreadsheet. But the cost of getting it wrong is massive. We are talking about losing institutional knowledge, demoralizing the rest of the team, and potentially facing expensive wrongful termination lawsuits if the process was flawed. Luna: Or simply replacing a decent employee with a stranger who costs twice as much to hire and takes six months to ramp up. Lucas: The replacement cost alone usually dwarfs the cost of a few extra hours of coaching. Yet, managers are incentivized to fire quickly. It looks decisive. It removes a problem from their desk immediately. Firing is easy. Fixing things is hard. We have built a corporate culture that rewards the path of least resistance over the path of best outcome. Luna: It is interesting how the rise of remote work has complicated this further. Without physical proximity, it is harder for managers to gauge effort or provide informal feedback, so they rely even more heavily on these formal, rigid structures. Lucas: That is a critical point. In an office, you might notice an employee struggling with a task and jump over to help them. Remotely, that intervention doesn’t happen. The struggle continues until it becomes a documented failure. The distance creates a vacuum that gets filled with assumptions, and those assumptions are almost always negative. Luna: So the solution isn't just changing the paperwork. It is changing the frequency and nature of communication. Moving from annual reviews to weekly touchpoints. Lucas: Weekly touchpoints are the gold standard. But even weekly can be too sparse if the issues are acute. The key is creating a feedback loop that is continuous. It should not feel like a separate event. It should be woven into the actual work. When a mistake happens, address it then. Do not wait for the quarterly review to bring it up. Luna: That requires managers to be comfortable having difficult conversations in real-time. Which brings us back to training. If leadership doesn't train middle management in conflict resolution and coaching, none of these structural changes will work. Lucas: Absolutely. You cannot expect a sales director who was promoted for hitting quotas to suddenly become a master psychologist. They need tools. They need frameworks. They need permission to spend time on people development without feeling like they are neglecting their own targets. Luna: It feels like we are circling back to the idea that performance management is actually relationship management. If the relationship is strong, you can handle the performance issues. If the relationship is weak, any performance issue becomes existential. Lucas: I would argue that is exactly right. Trust acts as a buffer. When trust is high, a missed target is seen as a temporary anomaly. When trust is low, a missed target is seen as proof of incompetence. The data point is the same; the interpretation is completely different based on the quality of the bond between leader and follower. Luna: So the real work happens long before the PIP. It happens in the daily interactions, the recognition, the support. You cannot build that capital in the last ninety days of an employment relationship. Lucas: Correct. And that is why we need to stop treating performance management as a crisis response mechanism. It should be a maintenance activity. Like servicing a car. You change the oil regularly. You check the tires. You do not wait until the engine explodes to decide to take it to the shop. Luna: A great analogy. Because once the engine explodes, it is usually too late to save the vehicle. You just replace it. Lucas: Right. And replacing the employee is expensive. Replacing the car is cheap. The goal is to keep the engine running smoothly through regular, small adjustments. That is the philosophy that needs to drive modern workforce decisions. Luna: If today was actually useful to you, the way these stay ad-free is listener support — buy me a coffee dot com slash fexingo. Lucas: We appreciate every bit of it. It helps us keep digging into these operational details. Luna: Thanks for listening. Now let's get back to the work. Lucas: So, assuming a manager decides to implement this softer, more iterative approach, how do they measure success? How do they know if the employee is actually improving versus just being nice? Luna: You measure behavior, not just outcomes. Did they communicate earlier when they were stuck? Did they seek feedback proactively? Those are leading indicators of performance that matter more than the final number. Lucas: Leading indicators. That is the key. Lagging indicators tell you what went wrong. Leading indicators tell you what is likely to go right. Tracking the former helps you predict the latter. Luna: It shifts the conversation from blame to prediction. Which is much more constructive for both parties involved. Lucas: Exactly. And it gives the employee agency. They can see the trajectory. They can adjust their course. It turns a scary ultimatum into a roadmap. Luna: Which makes the employee feel valued, even when they are struggling. That sense of value is the strongest retention tool we have. Lucas: Agreed. So, the next time you hear about a company rolling out stricter performance metrics, maybe ask yourself if they are trying to fix the person or just protect themselves from liability. Luna: Probably the latter. But hopefully, more leaders will start choosing the former. Lucas: Here is to hoping. Until next time, keep your feedback loops tight and your intentions clear.