Performance Improvement Plans Surge in US as Companies Seek Stealth Job Cuts

Performance improvement plans, a controversial corporate tool for managing underperforming employees, are becoming increasingly prevalent in U.S. workplaces. HR Acuity data shows workers subject to performance actions rose from 33.4 per 1,000 in 2020 to 43.6 per 1,000 in 2023.

While companies maintain PIPs offer a path to improvement, WSJ — citing HR executives and former employees — describes them as primarily providing legal protection against wrongful termination lawsuits and an alternative to formal layoffs. Only 10-25% of employees survive the 30-90 day improvement plans, with most either being terminated or leaving voluntarily.