Performance Improvement Plans in the Banking Industry

At face value, performance improvement plans (PIPs) are meant to be a tool that helps struggling employees meet specific performance-related goals. In the banking and finance industry, this commonly means meeting targets and sales quotas of various financial products.

While it may seem like basing work performance on numbers is a fair way to assess an employee, a performance improvement plan can be used by an employer to set unrealistic expectations. PIPs are not unique to the banking industry, and they are also commonly used as a means to terminate an employee for cause in situations where it isn’t warranted to do so. A termination for cause allows an employer to avoid paying their employee a severance.

Whether you’re in the banking industry or not, if your employer has placed you on a performance improvement plan, or has discussed their intention of using one to help improve your work or to meet workplace standards, speak with one of the leading employment lawyers in Toronto. We can differentiate between a legitimate PIP and one that is being used by an employer to skirt your employment rights. We’ll also advise you on the way to move forward that puts you in the best position to negotiate a fair severance package or for a successful resolution of your case in court if needed.

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 one of Ontario’s leading employment lawyers at Ertl Lawyers if you need legal advice. We’re more than happy to speak with you.

What is a Performance Improvement Plan (PIP)?

A legitimate PIP used by a manager or an employer that is designed to elevate your work performance, especially if you’re being assessed on specific targets, will often resemble a schedule that progressively lists goals at intervals (e.g., 30, 60, 90 days) so that you can gradually improve from your current level until you meet those targets.

If you aren’t reaching the targets on schedule, an employer will sometimes extend the timeline if they notice improvements, and that you are making an effort. Other characteristics of a legitimate performance improvement plan can include the following:

• A detailed and true report on the employee’s performance.
• Clear and precise expectations of the company regarding workplace behaviour and productivity and quality standards.
• Realistic actions the employee can take within an achievable timeframe to meet those expectations.
• A warning that not meeting the objectives in the PIP can result in discipline and possibly termination.
• An acknowledgement signed by both the employee and their supervisor or employer.

Performance Improvement Plans and the Banking Industry

Despite not being the only industry that uses PIPs, the banking industry does have a history of creating toxic workplaces that include:

• Uncertainty regarding job security.
• Low wages for non-managerial staff.
• Layoffs and outsourcing of IT and call centres.
• Pressure on employees to upsell clients on products they don’t need or want to meet high sales quotas.

Unfortunately, a recent survey of employees in the banking and finance sector in the UK found that 46% of those polled said that they had witnessed toxic behaviour in the workplace, including bullying, harassment and discrimination. What’s worse, 35% of the workers polled claimed to have been the target of those behaviours.

On a side note, if you are subjected to bullying, discrimination or harassment in the workplace, and you’ve spoken to your employer or HR rep about it, yet you are still experiencing the harassment – or your employer is the one harassing you – contact an employment lawyer immediately as this could be grounds for a lawsuit. At the very least, it may be argued that you have grounds to claim that you are being constructively dismissed due to what is known as constructive dismissal.

The same can also be said if, unlike the performance improvement plans described above, you are placed on a PIP that is designed as a means to create grounds for terminating you with cause. Sometimes, PIPs are used as a tool to bully an employee into quitting. Sometimes the differences can be subtle, but there are indicators of sham performance improvement plans.

Characteristics of a Fake Performance Improvement Plan

If your employer places you on a performance improvement plan, you can’t refuse to participate or follow it, even if there has been nothing wrong with your work performance, your employer is constantly “moving the goal posts” regarding performance expectations, or they are trying to reduce your pay without following the proper pay cut laws. Unfortunately, not abiding by or refusing to acknowledge a PIP may be viewed as reasonable grounds for termination with cause.

Here are a few of the indications that a performance improvement plan is being used to justify terminating you for cause and is not about your work performance:

• Criticism of the performance of your work is false, misleading, vague or based on opinions that aren’t measurable.
• The desired improvements in the PIP are generic or abstract, like “improve your work quality” or “increase sales.”
• All of the reports and documentation regarding your work performance, only mention what you’re doing wrong.
• The work duties listed in the PIP are not in your job description, nor are the performance targets in the PIP, and you didn’t receive any training to accomplish them.
• The targets in the PIP or the timeframe to achieve them are unrealistic.
• You are not provided with training or support to meet your targets.
• Your manager or employer uses the PIP to constantly criticize or harass you for not meeting your goals.

How to Respond if You are Placed on an Unfair PIP

Although you are required to do your best to comply with an unfair performance improvement plan, there are steps you can take to protect yourself moving forward. Make sure to gather all documents regarding your employment, job description, evaluations, emails, employment contract etc.

You also want to start a paper trail of your own. Send an email regarding the performance improvement plan that:

• Denies any false or misleading statements made about your work in the PIP or performance review.
• Ask for clear and specific explanations of any criticisms or targets that are unclear.
• Explain how and why the expected performance standards are unrealistic.
• Detail all of the reasons for not meeting your employer’s expectations, e.g., the lack of training or resources.
• Make it clear that the discussion regarding your performance was the first time you were told of the expected targets or job duties.
• Remind your employer of what you have accomplished, your successes and the challenges you overcame to do so.
• Mention any personal, medical, family or religious obligations that are impacting your ability to meet the goals in the PIP and ask if there are any accommodations that can be made to assist you in meeting their goals.
• Ask for training or other resources you need to accomplish your targets.

You must, however, be very careful about the tone of your correspondence. Remaining reasonable and professional is vital to potential future negotiations or litigation. This is why it’s crucial to speak to an employment lawyer as soon as you are placed on a PIP.

What Happens if You See an Employment Lawyer After Being Place on a PIP?

An employment lawyer will usually lay out your options and potential outcomes and then ask you what your desired outcomes are. Employment lawyers often contact an employer on the employee’s behalf and word the communication according to their client’s instructions.

For example, if you want to continue working at your current job until you can find a new one, your employment lawyer can draft a response email or letter that disputes the misleading or untrue statements in the PIP and asks for clarification on vague criticism or performance targets and, most importantly, does so knowing how to make these statements in a way that protects your interests. This is often enough to make the employer back off, which can give the employee time to find a new job.

Employees who are placed on an unfair PIP sometimes prefer to leave the workplace altogether and have their employment lawyer negotiate a severance package. There are other situations where an employee placed on a performance improvement plan does not have enough paperwork to counter their employer’s accusations, and the employment lawyer will advise them to gather more evidence.

That being said, there are many instances of an employer crossing the line and harassing or discriminating against an employee in an attempt to get them to quit, and lawsuits are filed in these cases.

The bottom line is, speak to an employment lawyer if you are put on a PIP or if you have questions regarding a specific workplace incident or your workplace rights in general.