You've had the performance conversation twice. The issues aren't improving. You know you need to put them on a Performance Improvement Plan (PIP), but you're not sure how to structure it, what to include, or whether it's even worth doing.

Most founders think: "PIPs are just paperwork to cover yourself legally before you fire someone." What they don't realize: a well-designed PIP is a genuine opportunity to salvage a hire while protecting yourself legally. A poorly designed PIP is performative documentation that wastes everyone's time and creates resentment.

PIPs done wrong create three problems: (1) The employee feels set up to fail and becomes defensive, (2) You waste 30-60 days on a process that was never designed to succeed, and (3) You still face legal risk because your PIP was vague, unrealistic, or discriminatory. In California and New York, poorly documented PIPs can actually hurt your wrongful termination defense more than help it.

Here's how to create a PIP that gives someone a genuine chance to improve while protecting your company if they don't.

✓ Performance issues are fixable with clear expectations and support

✓ You've already had at least two documented conversations about the issues

✓ You're genuinely willing to invest time and resources to help them succeed

✗ The issue is immediate cause for termination

→ These require immediate termination, not a PIP.

✗ The issue is fundamental fit or capability

→ These aren't improvable through a PIP. Either restructure the role or part ways.

✗ You've already decided to terminate and are just creating paperwork

→ Be honest. If you've lost confidence, have the termination conversation.

The gut check: Ask yourself: "If this person fully meets the PIP requirements, will I genuinely want them to stay?"

If the answer is no, skip the PIP. If the answer is yes, commit to making the PIP a real opportunity.

A well-designed PIP has six essential components:

Bad PIP language:

Why it's bad: Too vague. The employee doesn't know what to change, and you can't objectively measure improvement.

Good PIP language:

The formula: [Current behavior/metric] → [Required behavior/metric] with specific numbers and observable actions.

For each performance issue, define:

What success looks like:

Example - Software Engineer:

Issue: Code quality requires extensive rework, delaying team progress.

Success metric:

Example - Customer Success Manager:

Issue: Customer complaints escalating due to slow response times and incomplete resolutions.

Success metric:

Standard PIP timeline: 30-60 days, depending on complexity of improvements needed.

30-day PIP: For issues that should improve quickly with focus (responsiveness, meeting deadlines, communication)

60-day PIP: For issues requiring skill development or behavior change (technical skills, management capabilities)

Check-in schedule:

Document at each check-in:

Why weekly check-ins matter: California and New York courts scrutinize whether you gave ongoing feedback and support during the PIP. Weekly check-ins demonstrate good faith effort to help the employee succeed.

A PIP without support is a setup for failure. Specify what help you're providing:

Training resources:

Tools/access:

Manager support:

Adjusted workload (if relevant):

Example:

Issue: Marketing content quality is below standard.

Support provided:

Be explicit about what happens if improvement doesn't occur.

Standard language: "If you do not meet the performance expectations outlined in this plan by [end date], your employment with [Company] may be terminated."

Why "may be" not "will be": Gives you flexibility. If someone makes significant progress but doesn't fully meet every metric, you might extend the PIP rather than terminate.

State-specific considerations:

California/New York: PIPs are strongly recommended before termination for performance. Courts ask: "Did you give the employee a fair chance with clear expectations and support?"

Colorado: At-will state, but PIPs demonstrate good faith and help defend against unemployment claims.

Texas/Florida: More employer-friendly, but PIPs still reduce legal risk and demonstrate fairness.

Both parties sign and date the PIP.

Include this language: "I acknowledge that I have received, read, and understand this Performance Improvement Plan. I understand the expectations outlined and the consequences if improvement is not achieved. I have had the opportunity to ask questions."

Employee signature: _____________________ Date: _______

Manager signature: _____________________ Date: _______

If employee refuses to sign: Note on the document: "Employee declined to sign. PIP was provided and explained on [date]." Have witness present and document the conversation.

Why signatures matter: Demonstrates the employee received clear notice of performance issues and expectations—critical for wrongful termination defense.

PERFORMANCE IMPROVEMENT PLAN

Employee Name: _____________________

Position: _____________________

Manager: _____________________

PIP Start Date: _____________________

PIP End Date: _____________________ (30 or 60 days from start)

PERFORMANCE ISSUES:

Issue #1: [Specific current behavior/metric]

Required Improvement: [Specific expected behavior/metric]

Success Metric: [How success will be measured]

Issue #2: [Specific current behavior/metric]

Required Improvement: [Specific expected behavior/metric]

Success Metric: [How success will be measured]

Issue #3: [Specific current behavior/metric]

Required Improvement: [Specific expected behavior/metric]

Success Metric: [How success will be measured]

SUPPORT AND RESOURCES PROVIDED:

- [Training/course/workshop]

- [Mentorship/coaching]

- [Tools/access]

- [Adjusted workload/responsibilities]

- [Weekly check-in schedule]

CHECK-IN SCHEDULE:

- Weekly 30-minute meetings every [day] at [time]

- Progress documentation every [frequency]

- Final evaluation on [PIP end date]

CONSEQUENCES:

Failure to meet the performance expectations outlined in this plan by [end date] may result in further disciplinary action, up to and including termination of employment.

ACKNOWLEDGMENT:

I acknowledge that I have received, read, and understand this Performance Improvement Plan. I understand the expectations outlined and the consequences if improvement is not achieved. I have had the opportunity to ask questions.

Employee Signature: _____________________ Date: _______

Manager Signature: _____________________ Date: _______

Timing: Schedule a meeting. Don't spring this on someone casually.

Setting: Private space, 30 minutes minimum

Who attends: You, the employee, and ideally a witness (HR, co-founder)

The script:

Opening (1 minute): "Thank you for meeting. As you know, we've discussed [performance issues] in our conversations on [dates]. Unfortunately, we haven't seen the improvement we need. Today I'm putting you on a formal Performance Improvement Plan."

Present the PIP (2-3 minutes): "This document outlines the specific areas where improvement is needed, what success looks like, the timeline, and the support we're providing. Let's review it together."

[Walk through each section. Read it aloud if needed.]

Clarify and answer questions (5-10 minutes): "Do you understand what's expected? Do you have questions about any of the metrics or support resources?"

Address emotions (2-3 minutes): If they're upset, defensive, or scared: "I know this is difficult. This PIP is a genuine opportunity to improve. I'm committing to weekly check-ins and providing [resources]. I want you to succeed."

Get commitment (1 minute): "Are you willing to commit to this plan?"

If yes: "Great. Let's sign it and schedule our weekly check-ins."

If no or uncertain: "I understand this is a lot to process. What concerns do you have?"

[Address concerns. If they're unwilling to commit, that's valuable information.]

Set next steps (1 minute): "Our first check-in is [day/time]. Between now and then, your focus is [specific first priority from PIP]. I'll send you the enrollment link for [training] today."

Weekly check-ins are non-negotiable. Missing a check-in undermines the entire process.

At each check-in:

Why documentation matters: California and New York scrutinize whether you provided ongoing support and feedback during the PIP. These emails are your evidence.

The problem: PIP says "improve communication" without specifics, or you add new requirements mid-PIP.

Why it's risky: Employee can claim they didn't know what was expected or that you moved the goalposts.

The fix: Be specific upfront. If new issues emerge during PIP, document them separately—don't add to existing PIP.

The problem: You provide training or help but don't document it.

Why it's risky: Employee claims you didn't support them during PIP.

The fix: Document every resource provided, every training completed, every check-in held.

The problem: PIP requires improvement in 2 weeks on issues that took months to develop, or sets metrics that even high performers can't meet.

Why it's risky: Looks like you set them up to fail. Courts call this "pretextual termination."

The fix: Metrics should be challenging but achievable. If unsure, ask: "Could our top performer meet these requirements?"

The problem: You PIP one person for behavior you tolerate in others.

Why it's risky: Looks like discrimination if the PIP'd employee is in a protected class.

The fix: Apply performance standards consistently. If you wouldn't PIP someone from a different demographic for the same behavior, don't do it.

The problem: You schedule weekly check-ins but cancel them or do them sporadically.

Why it's risky: Undermines your claim that you gave the employee a fair chance and support.

The fix: Protect PIP check-ins like board meetings. Don't cancel unless absolutely necessary, and reschedule immediately if you do.

Celebrate it: "You met the PIP requirements. Here's what you improved: [specific metrics]. Well done."

Document it: "As of [end date], [Employee] successfully completed their Performance Improvement Plan. They achieved [specific improvements]. PIP is now closed."

Set expectations going forward: "Performance expectations remain at this level. If performance drops below standards again, we'll address it immediately."

Monitor closely: For the next 90 days, watch carefully. Some people improve during PIP then regress.

Assess honestly: Did they make significant progress but fall short on one metric? Or did they barely try?

Your options:

Option A - Extend PIP: "You've made progress on [X] and [Y], but [Z] still needs work. I'm extending your PIP by 30 days to focus specifically on [Z]."

Option B - Terminate: "While you made some progress, you didn't meet the requirements we outlined. As stated in the PIP, we're ending your employment effective [date]."

The decision: If they showed genuine effort and significant improvement, extension may be warranted. If minimal effort or no real progress, terminate.

The conversation: "We've reached the end of your PIP period. Unfortunately, you haven't met the requirements we outlined. [Specific gaps]. As stated in the PIP, we're ending your employment with [Company] effective today."

Follow standard termination process:

State-specific final paycheck deadlines:

Legal protection: Your documented PIP is your defense against wrongful termination claims. You provided:

A PIP is a tool, not a formality. Use it when you genuinely want to salvage a hire and you're willing to invest the time to help them succeed.

Don't use a PIP when:

A good PIP has:

Three actions before creating your next PIP:

PIPs work when you commit to making them work. They protect you legally while giving someone a genuine chance to improve.

Do it with integrity. Do it with specificity. Do it with real support.

This content is provided for informational purposes only and does not constitute legal advice; for guidance on your specific situation, please consult with an employment attorney licensed in your state.