PIPs are performance improvement plans, not employee termination plans

The point of a performance improvement plan isn't to fire someone, it's to help them improve. It's right there is the name. But too often, PIPs aren't about performance or improvement.

For example, in Murphy v. Caterpillar Inc., the 7th Circuit just reversed summary judgment on the employee's age discrimination claim, and the court's reasoning serves as a stern warning to any employer using PIPs as a shortcut to termination.

Here's what Caterpillar got wrong about the PIP it delivered to Brian Murphy, a 58-year-old engineer:

The PIP included a task with a deadline that had already passed. Translation: he was already in violation before day one, and even if he completed every other task on the PIP, Caterpillar still could have terminated him for failing it.

When Murphy flagged the issue and asked for it to be edited so that he could meet its expectations, management refused to revise the plan.

Three managers pre-signed the section in the plan indicating that he had already failed—before he'd even had a chance to agree to the terms, let alone attempt compliance.

The court called this what it was: a setup. It ruled that a reasonable jury could find Murphy was constructively discharged because Caterpillar didn't offer him a path to succeed. Instead, it gave him a trap to fail.

PIPs aren't supposed to be employee termination devices. They're supposed to be tools for employee support and improvement. If you're using a PIP, ask yourself:

• Is the employee being given a real chance to improve?
• Are expectations clear, objective, and achievable?
• Have we documented a consistent history of performance issues?
• Are we treating this employee the same way we'd treat anyone else in a similar situation?

Because if a PIP looks like a paper trail straight to the exit, a jury might see it that way too. And once pretext enters the picture, summary judgment usually walks out.

The goal of a PIP isn't to set up a termination, it's to ensure fairness by giving the employee a real opportunity to succeed and stay with your organization. Anything less is disingenuous—and a liability risk.

If you need help training your managers to use PIPs the right way—or revisiting your current process—now's the time. Don't wait until your plan gets Exhibit A'd in federal court.