Performance Improvement Procedures (PIPs) at Work
Updated: Oct 10
If you have been told that you will be placed on a Performance Improvement Plan (PIP), you should understand your rights. Think about how to approach the situation. PIPs usually address concerns about performance. They can also be used to encourage resignation or to set the stage for dismissal.
This guide outlines what a PIP involves and your rights during the process. It also explains how to negotiate a fair outcome if you believe the process is unfair. That can include a settlement agreement.
What Is a Performance Improvement Plan (PIP)?
A Performance Improvement Plan (PIP) is a formal document. It sets out specific work objectives or Key Performance Indicators (KPIs) that you must meet within a set timeframe. These objectives target areas where your employer believes you need to improve.
Characteristics of a Fair PIP:
Realistic and Achievable Goals: Objectives should be attainable within the specified timeframe.
Aligned with Your Job Role: The targets must be relevant to your qualifications and job description.
Clear and Measurable: Goals should be quantifiable, so progress can be objectively assessed.
Prioritized: If there are multiple objectives, they should be ranked in order of importance.
Transparent: The PIP should clearly state the specific shortcomings it aims to address.
A typical PIP lasts between 30 to 90 days, during which your performance is monitored and assessed.
How a fair PIP should be run
Good performance management is about support as well as targets. A fair process usually includes:
Clear expectations: you should know the required standard and how it will be measured.
Regular check-ins: line managers should meet you often, for example weekly, to review progress and give feedback.
Additional training: if the problem is a skills gap, your employer should offer training or support.
Time to improve: the plan should give you a fair period to reach the standard.
Written records: targets, meetings and outcomes should be written down.
The Acas Code of Practice on disciplinary and grievance procedures sets out good practice for dealing with performance problems. You can read the Acas code. A tribunal may take the code into account if a dispute arises.
If the plan does not look fair, see our guide on whether employers can change KPIs. You may also read whether KPIs can be used against you.
Your Rights During a PIP
Employees undergoing performance improvement procedures have several rights that employers must respect throughout the process.
1. Before the PIP Starts
Transparency: You have the right to know why you were selected for the PIP.
Fair Evaluation: Ensure that the decision to place you on a PIP is based on factual performance issues and not personal bias or discrimination.
2. During the PIP
Input in Plan Creation: While not mandatory, some employers involve employees in creating PIP objectives. If invited, ensure the goals are fair and achievable.
Support from Your Employer: Your employer should provide necessary training or resources to help you meet the objectives.
3. After the PIP
Right to appeal: if the process ends in disciplinary action or dismissal, you can appeal. This matters most if the PIP was unfair or unrealistic.
What if the PIP leads to dismissal?
An employer may dismiss for capability, which means the employee cannot do the job to the required standard. Capability is one of the potentially fair reasons for dismissal in section 98 of the Employment Rights Act 1996. Even then, the employer must act fairly. That normally means setting out the problem, giving you a real chance to improve and allowing you to put your side.
Whether you can bring an unfair dismissal claim depends on factors such as your length of service. Check the current rules on GOV.UK. Time limits for claims are short, so get advice quickly. Our guide to employment tribunal claim steps explains the process.
What to Do If the PIP Is Unfair
If you believe the PIP is being used unfairly or designed to make you fail, take the following steps:
1. Request Adjustments
If any goals are unrealistic or unattainable due to factors beyond your control, formally request revisions. Document these requests to create a record of your concerns.
2. Document Everything
Keep records of all communications, meetings, and feedback related to the PIP. These documents may serve as evidence if you need to challenge the process.
3. Seek Legal or Professional Advice
If you suspect the PIP is being used as a tactic to push you out, consult:
An employment solicitor for tailored legal advice.
A union representative, if applicable.
Considering a Settlement Agreement
In some cases, a PIP may indicate that your employer prefers you to leave rather than continue in your role. This situation can present an opportunity to negotiate a settlement agreement.
What Is a Settlement Agreement?
A settlement agreement is a legal document. You agree to leave your job in return for money and other benefits, such as a positive reference.
When to Consider a Settlement Agreement
Eroded Trust: If the PIP has damaged the relationship between you and your employer.
Unfair Treatment: If you believe the PIP is designed to force your resignation.
Better Opportunities: If you’re ready to leave and pursue new opportunities.
How to Negotiate a Settlement Agreement
1. Propose a Resolution
If you believe leaving is the best option, you can send a Without Prejudice letter proposing a settlement. This means your offer can’t be used against you in a tribunal.
2. Highlight Mutual Benefits
Emphasize how a settlement benefits both parties:
Avoids Conflict: Reduces the risk of a tribunal claim.
Saves Time and Costs: Eliminates the need for the employer to invest further resources in the PIP.
3. Include Key Terms
When negotiating a settlement, consider requesting:
Compensation: Equivalent to the wages you’d earn during the PIP and your notice period.
A Positive Reference: Essential for your future employment prospects.
Non-Disclosure Agreement: To protect your reputation.
Understanding Employer Intentions
If your employer initiates a PIP, they may also hint at a settlement agreement during a meeting or through a protected conversation.
Protected Conversations: These discussions allow your employer to propose a settlement without the risk of the conversation being used as evidence in legal proceedings.
On-the-Record Conversations: If no PIP or performance concerns have been documented previously, the offer may not be legally protected, giving you stronger negotiating leverage.
Stay or Leave: Weighing Your Options
Being placed on a PIP often creates a dilemma:
Staying
Pros:
You retain your job and have the opportunity to prove yourself.
Successfully completing a PIP can rebuild your confidence and standing within the company.
Cons:
The process may strain your relationship with your employer.
Your future at the company might remain uncertain.
Leaving
Pros:
You can negotiate a fair settlement and move on to new opportunities.
Avoids the stress and potential conflict of the PIP process.
Cons:
Requires careful negotiation to secure a strong financial exit.
Performance Improvement Plans (PIPs) can be a tool for growth, but they can also be misused to pressure employees into resigning. By understanding your rights, documenting your experience, and considering a strategic approach, you can protect yourself and potentially turn the situation to your advantage.
If you’re facing a PIP or considering a settlement agreement, consult a specialist employment solicitor to ensure you’re making informed decisions.
In the end, effective performance management should help both sides. If it feels like a path to the exit, a lawyer can help you decide whether to stay and improve or negotiate your departure.
