Performance Improvement Plan (PIP) This term may not be familiar to many people. But if one day our boss tells us that our performance is not good, below the target, and wants us to enter the PIP program, how would we feel? Is the company trying to squeeze us or pressure us to resign?
What is a Performance Improvement Plan (PIP)?
Performance Improvement Plan (PIP) is a tool that companies use to improve employee performance so that employees’ performance can improve from the previous low to the level that the company expects. Sometimes, PIP is used to improve employee performance in certain areas or areas that need urgent improvement and correction, especially in areas related to bad behavior, such as problems resulting from inappropriate behavior when working with others or problems with discipline, etc.
“PIP is a tool to save the situation of employees who have poor performance.”
If looking at the positive side, for the employees who have to enter the PIP program, that is, the employees who have had or are currently performing poorly, will be given the opportunity to fix and improve themselves. By the process of a good PIP, the supervisor or HR department must understand this program together with the employees. There must be a specification of goals, issues that need to be fixed and improved, including the time frame, measurement methods, and follow-up, etc.
“The goal of PIP is to help employees who are performing poorly improve.”
Therefore, both the head and HR department must provide assistance, whether it is additional training, coaching, or mentoring, in matters related to improving the performance of employees with performance problems.
The Problem of PIP from an Employee’s Perspective
Instead of the PIP program making employees with performance problems feel like this is an opportunity, they feel worse. It turns out that the PIP is a tool to get rid of them. Or from another perspective, when employees have low performance, instead of the manager or HR department coming to help, they should show that they really want to help the employees.
“From the perspective of the PIP employee, entering the PIP program is seen as a pressure or a compulsion to resign.”
But instead, they announce the story that they have to enter the PIP program to other people in the workplace. This is another problem that makes employees who have to enter the PIP see it as an additional burden on their poor performance and indirectly forcing them to leave because they feel ashamed when people in the workplace know that they have performance problems.
For this reason, PIP is often viewed as a layoff program rather than a program that helps employees.
If employees are underperforming, why doesn’t the company just fire them? Why put them on a PIP program?
The issue of employee performance is a challenge for every organization, and it can take many forms, whether it’s employees who used to perform well in the past, but then this year they’re worse, or some employees who have consistently performed poorly, or other cases. From the company’s perspective, if we were to use the criteria to decide that employees are currently performing poorly and then fire them all, it wouldn’t be possible, because there wouldn’t be anyone left to work for them.
And importantly, if a large number of employees have to be fired for just poor performance, the company may have to pay a huge amount of money in compensation for termination. As a result, most companies believe that if they really have to fire employees, they should give them a chance to improve themselves first, for the sake of fairness for both the employees and the company. Because the company itself cannot keep or sustain employees who are not performing for long, it would be unfair to other employees who are also dedicated to their work and performing.
If we need to enter the PIP program, what should we do?
This depends on each employee’s situation, what kind of company they are facing?
In the first case, if the company has a positive objective, that is, to help employees who have real performance problems, it should be a positive thing and a good opportunity for employees to have a chance to improve themselves.
“If the company really wants to help its employees, why put them on a PIP program?”
It must be understood that when the company makes a PIP, it is considered to be making it clear in writing, which is considered to be setting objectives, goals, methods, and concrete measurements jointly between the employee, the manager, and the HR department. It is a transparent and clear action of what the employee must do, in what way, and how to measure the results so that the employee can return to having good performance as before or as good as the target.
If the company just makes vague statements or tells employees with performance problems to improve themselves without any details or mutual agreements, employees should prepare themselves. There is no way to survive.
In the second case, the company aims to eliminate employees who have poor performance, bad behavior, problems, or often cause problems for the organization. They will use PIP as a tool to force employees to resign. In fact, the company wants to terminate this group of people so badly, or if they can let them go immediately and as soon as possible, they would like to do so.
But in reality, it is not possible because if the company has to pay severance pay to employees who have poor performance, such as employees who perform poorly, employees who are lazy and shirking their duties, or employees who do not work well with others and only cause problems, it is like setting a bad example for employees in the organization to follow.
“So the company chose to use the PIP channel to force employees to leave so that they don’t have to pay compensation instead, right?”
If we are in this situation, whether it is the first company or the second company, we must understand all the details that are specified in the PIP program, what are the goals, what are the methods, how do they measure and track our performance before signing or accepting to the program.
Many times, employees do not understand and agree to sign into the PIP program without realizing that what they have signed puts the employees at a great disadvantage because many of the goals that the supervisor gives them to improve themselves are almost impossible to achieve and many cannot be completed within the specified time frame. Therefore, the problem that follows is that entering the PIP program is entering the program to resign by default.
As employees, we all have the opportunity to experience performance problems. If we really have to face a PIP, don’t give up. Look at this as an opportunity for us to improve and fix things first. If we can do everything as specified in the PIP, no matter how good or bad the company’s intentions are, they cannot be used as a reason to fire us. Unless they really fire us, then that would be a different case, which would be a termination.
If we do not pass the PIP requirements, does the company have the right to terminate our employment?
The company has the right to terminate our employment at any time, but if the company terminates any employee, it must do so in accordance with the law.
Referring to the Labor Protection Act, Section 119, in Section 4, it is stated in one section that if an employee violates work regulations and the employer has given a written warning, except in serious cases, the employer is not required to give a warning. The employee will not receive compensation due to termination.
This is the point where employers or companies use PIP. But before entering the program, they issue a warning letter about the employee’s poor performance. There may be an additional stipulation at the end that if the employee cannot achieve the goals set by the company, the company will terminate the employment without paying any compensation. And after the employee enters the PIP program, the company will immediately take action. If the employee’s performance does not improve, it is considered a violation of the order specified in the warning letter and the employee can be terminated without paying any compensation.
In this case, the company is considered to have committed a mistake and is considered to have unfairly terminated the employment because the employee’s failure to perform the work as agreed upon is not a serious disciplinary offense.
The company’s claim that the employee violated the company’s lawful and just orders (i.e. the warning letter) is a misleading claim because in Section 4 of Article 119, it must be related to disciplinary offenses, such as the employee being frequently late, for which the company has already issued a warning letter. The last warning letter states that if the employee is late again the next time, the company will terminate the employee without paying any compensation or advance notice. If the employee still misbehaves by being late again, it will fall under Section 4 of Article 119 and the company will be able to terminate the employee without paying compensation.
If the company terminates us due to poor performance and does not pay compensation, what should we do?
We also have the right to sue and claim compensation for unfair dismissal.
If the company does not have clear and sufficient evidence of how poorly the employee performed, or how, it may be considered an unfair dismissal and may be ordered by the court to rehire the employee or pay damages with interest to the employee.
If the employee has caused damage to the company and there is real evidence that he/she is guilty under Section 119, even if the company gives him/her an opportunity to enter the PIP program and it turns out that he/she does not pass, the company has the right not to pay compensation. As for the employee, if he/she goes to court, the court may decide based on the facts that the employer does not have to pay compensation to the employee when the employee commits an offense under Section 119 as well.
Conclusion
From all that has been said, we now understand what a Performance Improvement Plan (PIP) is. How should we view it?
If our performance is really bad, we have to accept it in order to move forward and improve. Don’t just look at the negative side and think that the company is taking advantage of us or pressuring us to resign.
As for labor laws, we must study the conditions and requirements thoroughly. Otherwise, we may become the ones who lose benefits and are taken advantage of by the employer. And we ourselves should not take advantage or use loopholes in the law to take advantage of the employer.
Thanks for the information from
https://www.prachachat.net/csr-hr/news-496035
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