No, PIP is not an acronym coined by an underground rock band or a banned drug. For the uninitiated, PIP stands for Performance Improvement Plan.
Although globally, structured Performance Appraisal exercises have increasingly become a norm, there has still been a glaring lack of 'Performance Management'.
Infact in many small to mid-sized firms (and even some large ones) that I have come across, Performance Appraisal time is treated more like a fault finding mission or worse still, a witch hunt. The reason is very apparent: many organizations have in the recent past used Performance Appraisal time to initiate and justify layoffs. This is fine when there is a strong performance related reason to retrench an employee, but when an employee has every reason to believe and is also possibly able prove that his/her performance has been as per or above the required standards, then the management is rightly perceived as playing the employees 'for a fool'.
Over time, the value of the PAS within the organization declines significantly
Why does this happen you ask?
There are a variety of reasons:
1. The Performance Appraisal exercise, as already mentioned, becomes more of an annual or semi-annual 'fault finding' mission, rather than an objective overview of an individuals' performance.
2. The phenomenon of 'Halo Effect' influences the ratings contained within appraisal quite overtly at times, thus negating the actual of performance and creating discontent/distrust of the system amongst the less fortunate employees.
3. A partial or complete absence of any linkage of the appraisal exercise to a PDP or a PIP, thus defeating the whole concept of 'Performance Management' of which the appraisal exercise is just one part.
4. Lack of initiation of Learning and Development programs to fill the lacunae that are uncovered during the appraisal exercise and the legitimate need for training expressed by various employees.
Now, most of us would know that a Performance Improvement Plan is usually put into place after an employee has secured a low or a border line rating during the appraisal exercise or if his/her performance is clearly seen to be below par even outside of an official performance review, thus giving him/her a mutually agreed, finite amount of time to get his/her performance back on track or to the required levels.
However, my contention is that a Performace Improvement Plan need not merely be a reaction to low performance ratings but should be a regular exercise ingrained very much into the organization's way of working. Afterall, overtime an individual's job satification has less to do with the monetary aspect and increasingly more to do with his/her ability to perform (or outperform) consistently.
More on PIP in a few days......
Index of Terms Used:
PIP = Performance Improvement Plan
PDP = Performance development Plan
