Case Study: Should a CHRO Abandon Performance Improvement Plans?
Anna Chen, the chief human resources officer at Barton Creek Technologies, is faced with a dilemma regarding the company's performance improvement plan (PIP).
Initially introduced as a supportive tool to help struggling employees, the PIP has become perceived as a punitive mechanism. An internal audit revealed alarming statistics: only 15% of employees placed on PIPs complete them, while 60% are terminated and 25% go on stress-related medical leave, often not returning.
Managers have admitted to lacking the necessary training to implement PIPs effectively, and employees have described the plans as stigmatizing and demoralizing.
Chen is torn between reforming the program into a mentorship-based system, which would require significant investment and cultural change, or leaving it untouched to avoid straining resources and leadership goodwill.
This dilemma is further complicated by the company's current situation, with looming acquisitions and tight budgets.
Author's summary: CHRO Anna Chen faces a dilemma over reforming or abandoning the company's performance improvement plan.
- Only 15% of employees complete PIPs
- 60% are terminated
- 25% go on stress-related medical leave
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