Performance Improvement plans – why employers may offer you a more dignified exit.

If your performance at work is not up to scratch, before you know it, you may find yourself on a  Performance Improvement Plan (or ‘PIP’ as it is commonly known). This is a first step frequently used by an employer before they can properly dismiss you for capability reasons; in other words, as evidence of an employee not carrying out work to a satisfactory standard. It is often coupled with a disciplinary process. The PIP would usually be in writing and given to the employee to acknowledge and hopefully agree.

The PIP should:

  • clearly and objectively set out where you are failing;
  • set out the improvement expected of you using measurable objectives;
  • specify whether any support or training will be provided;
  • provide for the timescales and frequency of reviews; and
  • make clear what sanctions there will be if you fail to improve.

Many employees who follow the PIP route nevertheless do want to retain their jobs. However, this will be against a background that if their performance does not improve in their employers eyes, they could end up having their employment terminated for capability reasons. This will in turn affect their ability to secure new employment, especially as many employers have a policy of stating on job references that the employee has been dismissed for poor performance. In some industries, such as banking, this can spell career disaster.

What steps can you take?

Unfortunately, most PIP’s will ultimately lead to your dismissal. By the time your employer has invoked the formal stage of a PIP, the trust and confidence in your work has already largely dissipated. You will be given strict targets of improvement within a limited timescale (usually over a period of a few months) and it is fair to say most employees will find such targets unreasonable or unattainable. Some will rise to the challenge, but the added pressure of being under a PIP, as well as carrying out your day to day work is often difficult to endure. And so there becomes an unwritten and often unacknowledged acceptance on both sides that the relationship is not going to last for long.

Seek early advice

Many will wisely seek legal advice at an early stage. What you can do depends on whether or not you wish to remain with your employer. If you do want to stay, it would be best to address your concerns in respect of the PIP informally with your line manager or HR representative in the first instance.  You may also wish to put forward any alternatives to the PIP including appropriate training.

Lodge a grievance

If the informal route proves unsuccessful, you can raise your concerns formally through the grievance procedure. Most employers would deal with the grievance before proceeding with the PIP. You have the right to appeal any grievance decision (usually within 5 days) and also appeal the PIP decision if it is made part of a disciplinary process.

Don’t sign

The worst thing you can do is to sign an agreement to a PIP which you consider to be unfair. This will make any subsequent challenge to the process (including a dismissal on capability grounds) difficult to challenge. If you are being pressured to sign an acknowledgement of the PIP which you don’t agree with, you should make it clear that any signature is under protest and that the terms of the PIP are not agreed.

Negotiate an exit

If you do not want to stay, your employer may be receptive to ‘without prejudice’ discussions surrounding a mutually agreed termination via the signing of a Settlement Agreement which will set out the full agreed termination terms. This is especially the case if it can be shown that whatever the outcome of the PIP, the trust and confidence between the parties will have dissipated. Negotiations, if successful would result in a lump sum payment to you, an agreed termination date and a job reference, subject to you agreeing to waive all future claims against your employer. Such an approach often benefits both parties, but you are best advised to obtain legal advice before embarking on this route.

At Landau Law, we have negotiated thousands of successful settlements for those facing performance issues.

Make a claim

Ultimately, if you are dismissed for capability reasons, you do have the right to make a claim for unfair dismissal assuming you have the qualifying period of 2 years service. Such a claim would need to be made no later than 3 months less one day from your last day of paid employment.

There are many circumstances where I have negotiated a dignified exit on behalf of an employee who is faced with a PIP, and which has resulted in a far better outcome than what would have been the case under the alternative process. To walk away with a lump sum and an unblemished record represents a positive salvation, and can be seen to beneficial to the employer too. This is especially where the employer would have to maintain an employee’s salary during the PIP, which is potentially wasted money. They would also have to pay notice should the employee fail the PIP.

Sensible and pragmatic discussions are always the best way forward.

For further advice and a free consultation, please get in contact on 020 7100 5256, or email us.