The Performance Improvement Plan is Cruel and Unusual.

Marc Randolph
4 min readFeb 14, 2024

So why are so many companies still using it?

Many decades ago, back in the ’80s and ’90s when I was but a lad and still wet behind the ears, there once lived a Human Resources practice called the “Performance Improvement Plan”.

I’m guessing you’ve heard of it, but if not, here’s how Forbes summarizes it, “A performance improvement plan, or PIP, is a written document that identifies how an employee is falling short of expectations and what needs to be done to improve (and stay employed).”

Back then, it was simply what Human Resources and Legal required that we all did before we fired someone. But that was 40 years ago. I assumed the practice had long since been retired and was now something we looked back on with amazement and revulsion, the same way one feels when one see pictures of medieval torture devices.

But when I briefly mentioned PIPs in one of my recent LinkedIn posts, I heard back from hundreds of commenters that reports of PIPs deaths were greatly exaggerated, and that in fact, the practice was still alive and well.

How could anyone still believe that this is appropriate?

Or, put a different way, how could anyone other than Human Resources and Legal believe that this is still appropriate?

You will always be advised by HR/Legal that you need to put someone on a plan before you fire someone since it is HR and Legal’s job to protect the company. They will happily subject ninety-nine people to a degrading experience simply to keep one person from suing the company.

But the Performance Improvement Plan is cruel and unusual punishment.

-You know that at the end of the plan, you’re going to fire them.

-They know that at the end of the plan, you’re going to fire them.

-Everyone else knows that at the end of the plan, you’re going to fire them.

Since everyone knows what is eventually going to happen, it’s simply cruel to the employee (and a waste of everyone’s time) to continue the charade that the outcome is going to be different this time.

Instead, we should be treating people the way that we would want to be treated. And I have yet to meet the person who says they would love to spend three months jumping through hoops that are solely designed to create an evidence track of how badly they suck at their job.

In other words, PIPs are not “Performance Improvement Plans”. They are plans designed to “Prove I’m Pathetic.” And that’s simply cruel.

It’s hard to acknowledge when someone isn’t working out. It’s always difficult delivering that news. But there is no excuse not to treat someone with dignity.

-Be respectful and acknowledge that this is as much your fault as theirs. Being asked to leave doesn’t mean that they are a bad person . . . it’s usually because they are a bad match for what you need, and that’s on you as much as it is on them.

-Be generous with your severance. The basic rule of thumb is, “How long will it take this person to restore their income” and that’s rarely going to be accomplished in two weeks.

-Be genuine in your efforts to ensure they land on their feet. Think about how you can help them find someplace that might be a better match for their specific strengths and weaknesses. Don’t let HR and Legal restrict you to generic “last title and years of employment” style references. Be honest and genuinely helpful.

If treating people well isn’t enough of a reason to retire the PIP for good, consider that it’s also a good business practice. Because the people who leave your company influence how the world perceives your company just as strongly as the ones who stay.

But here’s the most important part:

When someone is asked to leave, bring your team together and tell them honestly what happened. None of this “she left to spend more time with her family” or “it was mutual” bullshit.

By not telling everyone exactly why somebody else was fired you miss out on the perfect opportunity to reinforce your culture and demonstrate you take it seriously. But worse, you risk leaving everyone else to wonder if they are next, since they may not understand why someone who looked like they were doing so well, isn’t there anymore. As I mentioned in a recent blog post, Netflix is well-known for its culture of personal responsibility. But a big part of that comes from being honest. To everyone. About everything. You can’t treat people like adults if you don’t communicate like adults, and that means speaking the truth and acting on it.

To find other things I’ve written and much more, check out MarcRandolph.com

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Marc Randolph

Netflix Co-founder. Entrepreneur, Investor and Advisor