9 Ways PIPs Hurt More Than Help (And What to Do Instead)

Performance Improvement Plans (PIPs) were designed by big corporations to keep things consistent and documented when dealing with performance issues. They also help HR departments create standardized ways to track and address problems. While borrowing ideas from corporate structures can sometimes help small businesses, PIPs just aren’t the right tool.

PIP stands for Performance Improvement Plan.

Instead of driving real improvement, PIPs tend to delay necessary corrections, create legal risks, and put employees on the defensive. A better approach? Regular One-on-Ones—these help managers address concerns before they escalate. When performance issues require more intervention, Progressive Corrective Coaching (PCC), not PIPs, provides a structured yet flexible way to address behaviors in real-time, keeping employees engaged while reducing legal risks.

At the end of the day, leaders want their employees to succeed. And employees need small wins and guidance to improve. The goal isn’t just to point out problems—it’s to ask for improvement and recognize progress. When employees get better, celebrating their wins reinforces positive change, creating a more motivated and productive team.

Exciting news! Paul Edwards and CeCe Wilson are discussing this topic in an upcoming podcast episode! Stay tuned for the link.

An Opportunity for Managers to Look Inward: When Employees Struggle, It’s Also a Chance to Identify Gaps in Onboarding, Training, and Systems

It’s important to consider that outside factors might be contributing to an employee’s struggles. Addressing a performance issue can reveal problems with your onboarding, training, or operational systems—one of the hidden benefits of taking a hands-on approach to managing employee performance.

For example:

• If multiple employees struggle with the same task, is your training clear and effective?
• If an employee doesn’t understand expectations, was the onboarding process thorough enough?
• If mistakes keep happening despite efforts, is there a system or workflow issue that needs fixing?

By shifting from a “fix the employee” mindset to a “let’s improve the workplace” approach, managers can turn performance discussions into opportunities for growth—for both the employee and the business.

1. PIPs Often Delay Urgent Performance Corrections

PIPs set arbitrary timelines for improvement, but correction needs to happen right away—not over the course of a month or more. Plus, they’re not designed to provide mentorship. Big companies created PIPs to deal with multiple employees at once and to formally warn them that improvement is necessary. It’s a consequence-driven process, not a coaching tool.

Real-World Example: A dental office had a receptionist who consistently arrived late, causing front-desk delays. Instead of immediate coaching, the manager placed her on a 30-day PIP. The result? The employee assumed she had 30 more days of flexibility, and patients continued experiencing delays. A real-time coaching approach would have addressed the issue immediately and set clear expectations.

• One-on-ones and Progressive Corrective Coaching eliminate this delay by addressing behaviors in real-time and ensuring immediate accountability in managing employee performance.

2. PIPs Often Overwhelm Employees by Addressing Too Many Issues at Once

Employees placed on a PIP often have multiple areas they need to improve, such as:

• Being on time
• Following scripts correctly
• Meeting productivity expectations

A PIP expects them to fix everything all at once, which can be overwhelming and demotivating. Instead, focusing on one improvement at a time allows for:

• Measurable progress
• Celebrated wins that reinforce motivation
• A clear path to success rather than a long list of failures

Real-World Example: A medical office had a billing specialist who struggled with both speed and accuracy. Instead of helping her improve one area at a time, she was placed on a PIP with an overwhelming list of required improvements. Overwhelmed and feeling defeated, she quit. A progressive coaching plan that focused on small, achievable milestones could have helped her improve and stay in the role.

With One-on-ones and Progressive Corrective Coaching, managers can prioritize the most urgent issue first, setting employees up for real, lasting improvement.

Don’t miss the podcast episode with Paul Edwards and CeCe Wilson—coming soon!

3. PIPs Create a “Last-Chance” Mentality That Can Backfire

Since PIPs are often seen as a warning before termination, they can trigger stress, fear, and defensiveness in employees. Instead of improving, employees may:

• Shut down or disengage – assuming their job is already lost
• Retaliate or become combative, creating further workplace tension
• Seek legal action, using the PIP as evidence against the company

Real-World Example: An optometry clinic placed an assistant on a PIP after patients complained about her bedside manner. Instead of seeing the PIP as an opportunity to improve, she became defensive, withdrew from her coworkers, and ultimately quit. Had the manager used a coaching approach and built a development plan, the assistant could have had a better chance of improving and staying.

4. PIPs Can Increase Legal Risks

A PIP is a formal document, which means it can become a legal liability. PIPs often include timelines and expectations that stretch over weeks or months. Lawyers often use them to argue that:

• The employer didn’t provide enough support for improvement
• The company failed to follow its own plan, exposing inconsistencies
• The set timeline created an implied contract, weakening at-will employment

Real-World Example: A dental practice placed an assistant on a PIP for inconsistent sterilization procedures. When the assistant was later terminated, she claimed that the PIP was proof she had been unfairly targeted, leading to a wrongful termination claim. Using immediate coaching and documented feedback instead of a rigid PIP would have reduced the legal risk.

Since One-on-ones and Progressive Corrective Coaching don’t rely on unnecessary formal documentation, they reduce legal risks while still maintaining a clear record of managing employee performance.

Our Final Thoughts: Ditch PIPs and Protect Your Business with the Right Strategy

At the end of the day, PIPs create more problems than solutions. They:

• Delay necessary corrections
• Overwhelm employees
• Increase legal risks
• Create fear instead of motivation

Instead, Progressive Corrective Coaching and regular one-on-ones are proven methods for helping employees succeed without the risks of a PIP. By shifting to real-time coaching and immediate accountability, businesses can build a stronger, more engaged workforce—without resorting to ineffective, punitive plans.

Need help managing employee performance while staying legally compliant? Contact CEDR HR Solutions today for expert guidance on protecting your business and helping your team thrive. Our HR experts specialize in compliance, coaching-based management strategies, and providing the support you need to handle employee challenges with confidence. Let us help you create a workplace culture that encourages growth and minimizes risk.