I think that even without a study we can confidently gauge the
perception among the majority corporate employees that PIPs are a corporate CYA exercise, and we can support that with some factual pieces of information as well.
As an analogy, we don't need a study to figure out that Apple has more of a profit motivation to remove charging bricks from its iPhone packaging rather than their stated motivation to help the environment. We know intuitively as intelligent humans that obviously the cost savings is the most compelling motivation. There is no financial reason for Apple to care about the impact of excess charging bricks on the environment unless it was so catastrophic that it would impact their future business. And I think we all know that it isn't - a charging brick is a tiny collection of common materials that pales in comparison to the amount of gasoline the average person burns in a single day.
In the same way, we can figure out quite easily with our own brains and observation skills that a corporation doesn't have any real motivation for an enployee to successfully exit a PIP. Here's why:
- Firing the employee will directly save on cost and cut risk. Because they are already under-performing there is very little upside to keeping them around, the implication is that they are already costing more than they are bringing in, i.e., they aren't helping very much to ease the capacity burden on other employees or "keep the lights on." e.g., if you have an employee on an on-call rotation who misses their pages or can't resolve any issues without asking for help, you might as well not have them on the rotation at all.
- The employee is already proven to be a below-median performer if not a bottom 25% performer, so intuitively we know that a random hire is more likely to perform better than the current one. If you already have a bad apple you're going to be willing to reach into the bag of apples to find a better one even if you're blindfolded.
- There is no direct cost to firing an employee in the USA. Hiring and firing is at-will and job mobility is high. There is no requirement to pay severance of provide extended notice.
- It will take a minimal amount of time to hire someone thanks to the at-will nature of US labor laws, and because the existing employee is a low performer, a new employee will be very likely to be onboarded to a higher level of performance of the current employee relatively quickly. We already know from data [1] that it only takes a month to hire on average. That's only two paychecks of paying a poorly performing employee. The company could even start the interview process in parallel with the PIP.
- The probability of management being able to turn around the situation permanently should be assumed to be low because fundamentally the role and responsibilities will not change. We intuitively and through real studies know that it’s difficult to change habits and abilities in the sort of time range that a PIP demands. E.g., Is it better to hope that Bronny James one day becomes as good his father at basketball or would it be better to draft someone who is already better than Bronny James? It’s not impossible that Bronny develops to that level but it’s also extremely unlikely and his ceiling is probably only a somewhat small percentage higher than his current level of performance. If you’re giving someone a PIP because they can need help figuring out how to set an environment variable how can you expect them to perform the role adequately even if they put an honest effort into improving?
- There is a clear and direct benefit to the company for having a PIP as documentation of both poor performance and formal notification to avoid wrongful termination lawsuits and to avoid the negative impacts of having more unemployment insurance claims. Paying a few months of salary to document poor performance is clearly worth the cost compared to just a small handful of hours worth of legal fees or a settlement.
I think that all these factors means that effective PIPs are really only going to occur in situations where there is a temporary or sudden decline in performance and that remedies in the PIP will actually help the employee get out of that rut. But intuitively we know that is going to be rather uncommon, because most PIPs are accompanied with additional burden on the employee, so only the people who respond positively to additional responsibilities, pressure, and scrutiny will survive it. And that already is proven to be unlikely because of how the employee ended up getting a PIP in the first place.
[1] https://resources.workable.com/stories-and-insights/time-to-...