What is a Performance Improvement Plan & What Does it Entail?

A performance improvement plan (PIP) can be a legitimate management tool used to help employees shore up deficiencies in their speed or quality of work, or to address any behaviour-related concerns. It can also be used as an excuse to fire an employee for cause when an employer has no right to do so.

If you’ve been given a PIP, speak with an employment lawyer in Toronto with a free consultation. We’ll give you an honest assessment based on the information you provide, advise you of your rights and obligations and how best to protect yourself in your specific circumstances.

Disclaimer: The information in this guide and everywhere else on this website is for general information only and is not intended to provide legal advice of any kind. No lawyer-client relationship is created by accessing or otherwise using Ertl Lawyers’ website or by communicating with a lawyer or staff member. Please contact the employment and disability law firm of Ertl Lawyers if you need legal advice. We’re more than happy to speak with you.

What is a Performance Improvement Plan?

A performance improvement plan is usually given to an employee in a meeting with an employee’s immediate supervisor/employer, an HR rep or both. It will usually contain:

• A description of the employee’s actions and/or work performance.
• The employer’s expectations and productivity & quality standards.
• How the employee hasn’t met the criteria for an employee in their position.
• A set of goals/objectives and a timeline for achieving them.
• Steps for the employee to follow to meet those expectations.
• A formal, written warning that discipline up to and including termination will result from failure to meet the objectives stated in the PIP.
• If the PIP is based on behavioural issues, misconduct or constant tardiness, a warning that further similar actions will result in immediate termination.
• A signed acknowledgement by the employee.

How Long is a Performance Improvement Plan?

A PIP can contain a schedule for the employee to meet progressively increasing benchmarks at specific intervals such as 30, 60, 90 or more days until the desired results are achieved. That timeline can be extended if the supervisor or HR rep sees that the employee is making an effort, putting in extra time or work and there is a noticeable improvement even if the goals aren’t met on time.

Example of a Genuine Employee Performance Improvement Plan

Not every performance improvement plan is used as a way to get rid of an employee for cause. There are situations when an employee’s performance does fall short of expectations and the manager or employer sincerely wants to help the employee get better at their job.

In these situations, it’s easy to tell if a performance improvement plan is warranted. If you were told early on what your performance targets are, you’re falling short of them and you’ve earned low scores on evaluations or had discussions with your supervisor about not meeting targets then a PIP should not be a surprise.

Here are some of the characteristics of a PIP a manager will implement if they genuinely want to help an employee succeed at their work and remain on the job:

• The goals/expectations are realistically achievable.
• The employee’s shortcomings, behaviour, effort, etc., are clearly and fairly expressed and include both positive and negative feedback.
• The employee is provided a strategy for achieving performance standards with easy-to-follow steps or micro-goals.
• The PIP gives the employee a reasonable amount of time to reach employment standards.
• The PIP allows for input from the employee.
• There is ongoing support to help the employee such as mentoring, training or counselling.

However, even if you feel that a performance improvement plan is fair, it’s important to respond in writing if there are any inaccuracies about your work performance, misunderstandings about your job duties or targets or there are reasons for your lack of success that were not included in the PIP. Keep reading to understand the importance of written responses to a PIP.

The Difference Between For-Cause Termination and Termination Without Cause and the Importance of that Distinction

By contrast, there are employers or managers who will place an employee on a PIP after they’ve already made the decision to dismiss them and are using the PIP as a way to terminate them for cause or to provide them with a discounted severance package.

An employer can terminate an employee at any time without any warning if they choose to. So why bother with a PIP at all? It’s because if they do, they know they’re required to provide the employee with a reasonable notice period of the termination beforehand or pay them in lieu of the notice.

They must also complete a Record of Employment in Ontario that officially acknowledges that the employee was terminated without cause, meaning the employee is entitled to their full severance as defined by the employment contract or as set out in the Employment Standards Act and the common law.

Depending on several factors that include the terms of the employment contract, the position of the employee, the amount of time they’ve worked for the employer, age and many other factors, they may have accumulated a significant severance package the employer is trying to get out of paying. A just-cause termination means that an employee is no longer entitled to severance or notice – unless otherwise stated in the employment contract.

There could be other reasons an employer uses a PIP as an excuse to terminate an employee for cause, but this is generally the most common.

How to Recognize When an Improvement Plan is an Excuse to Justify a Termination for Cause

There are a few telltale signs that a performance improvement plan is being used to justify a for-cause termination:

• The criticism of the employee’s performance is false or misleading, vague or is based on subjective opinions that aren’t measurable.
• The goals or improvements to be reached are vague or unmeasurable, i.e., “improve quality of work”, or “increase sales.”
• All documentation of an employee’s work performance, including evaluations leading up to and including the PIP, only focus on the negative and don’t describe anything the employee is doing well.
• The job duties mentioned in the PIP are not part of the employee’s job description and/or no training was provided to accomplish them.
• Performance standards referenced in the PIP were never discussed with the employee before.
• Either the goals set out in the PIP or the timeframe to accomplish them is unrealistic.
• There are no supports offered to help the employee reach their performance targets.
• The PIP is used as a way for a manager to constantly criticize or harass an employee for not meeting the terms in the PIP.

These are just a few indications that your boss is trying to get rid of you with a just-cause dismissal. There are a lot more signs of a sham performance improvement plan you need to recognize and prepare yourself accordingly.

How to Respond to a Performance Improvement Plan

First things first, even if you’ve been given a PIP you don’t agree with, refusing to follow it can be grounds for termination with cause. You will have to make an effort to carry out the steps outlined in the PIP – but first, you need to document your side of the story.

It’s good practice to document all work-related meetings that discuss or impact your performance. The best way to do so is by following up on the meeting or PIP with an email that summarizes what was discussed from your perspective. This is your opportunity to:

• Address any false or misleading statements made about your work in the PIP, evaluation or meeting.
• Ask for specific clarifications of vague criticisms or goals.
• Detail how or why the expected performance targets are unrealistic.
• Give reasons for not meeting performance standards such as a lack of training or resources, being given other tasks to complete, a down market, flawed instructions or training from management or substandard or late work from coworkers.
• Put it on the record that the meeting was the first time you were told of targets or job duties that you were not previously advised of.
• Remind your employer of your accomplishments and challenges you’ve overcome to meet them.
• Speak to any personal, medical, family or religious reasons that are contributing to your lack of success and ask for accommodations.
• Request the training or resources you need to accomplish your goals.

Pay attention to tone in your correspondence to ensure that you are seen as credible, reasonable and sincerely making an effort to do what is asked of you. That’s why it’s crucial to consult an employment lawyer to help you respond to a PIP that’s being used to railroad you. An employment lawyer can help you draft a response to a PIP that preserves your rights to severance and helps your case if it ends up in court.

Performance Improvement Plans and Employee Rights

The reason you must respond to unfair evaluations and PIPs in writing and create a history that shows your side of the story is the same reason your employer is going through the motions of a PIP in the first place – to leave a “paper” trail if the case ends up in court one day and to give you immediate leverage in negotiating a severance package.

If a case for wrongful dismissal goes to court, it is usually years after the fact, long after important details have been forgotten. Business records taken at the time in question can refresh a person’s memory and can carry significant evidential weight. If you have no evidence to contradict the PIP, you are at a major disadvantage and it’s unlikely the judgement would be in your favour.

Some of the issues that a judge will look at to determine if there was cause to terminate an employee due to incompetence include:

• That the employer told the employee of the required performance standards.
• The employer provided the employee with support to help them reach those requirements.
• The amount of time the employee was given to meet their goals.
• The reasons for the substandard performance.

Your emails can level the playing field in this regard.

There’s a more practical reason for documenting your responses to a dishonest PIP or work assessment as well. A thorough and well-thought-out response scripted by an employment lawyer is often enough to make an employer to back off, giving you more time to find a new job if that’s what you want to do.

As employment lawyers, we have ghost-written many of these responses effectively, drafted official correspondence on our clients’ behalf that produced the desired outcome and successfully represented clients in legal proceedings for wrongful dismissal using the best course of action specific to each case.

It is important to note, however, that a Judge, lawyer or court cannot force an employer to completely remove a PIP.  The best a lawyer can do is help you effectively manage the PIP to achieve a better outcome.