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Performance Improvement Plans (PIPs): 5 Legal Tips for Employers

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By Brett Snider, Esq. on October 03, 2014 8:41 AM

Performance improvement plans (PIPs) can be a great tool for employers to track and document the progress of employees who may not be cut out for the job.

PIPs can also be a great way to keep records of your company's efforts to rehabilitate a struggling employee, especially in the face of a potential discrimination or wrongful termination suit. But these plans are not impregnable shields to litigation, and there are still legal nuances when it comes to implementing one.

Here are five things employers should know to make the best use of PIPs:

1. Be Specific in Your Criticism.

PIPs serve many purposes, but ostensibly employers use them to give a suboptimal worker a chance to improve his or her performance. Avoid using vague words like "unprofessional" or "unresponsive" and instead point to specific instances tied to that employee's duties. Not only will specificity make it much easier for your employee to actually zero in and remedy gaps in performance via the PIP, but it may dispel any suggestion that the PIP is only a proxy for discrimination.

2. Modify the PIP With Employee Feedback.

Part of the PIP process will be a one-on-one meeting with the underperforming employee, which may provide more insight into the problem. The Society for Human Resources Management recommends making slight changes that incorporate the employee's feedback before the supervisor and employee sign the form.

3. Remember Accommodations and/or Leave.

Unless you want a disability discrimination or retaliation suit on your hands, you need to tailor your PIP around any existing accommodations or FMLA leave. If a complaint deals directly with a side effect of an accommodation or leave ("employee isn't in the office enough"), make sure a PIP-proposed solution takes these protected activities into account.

4. Document Everything.

Since PIPs often end with the termination of an underperforming employee, you need to memorialize all meetings or communications with and about that employee. It won't be helpful to note during a deposition that you and fellow managers just gossiped about an employee's poor performance before canning him or her.

5. Have an Attorney Waiting in the Wings.

Don't wait until you receive a nasty demand letter to pick up the phone to your attorney. Have your business attorney review your PIP plans before you set them in motion.

Doing a PIP right can be a boon for your business, instead of sowing the seeds of its undoing.

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