Managing Underperforming Employees Part 3: Structuring a PIP That Works

When an employee continues to fall short after informal feedback, implementing a Performance Improvement Plan (PIP) is often the next step.

At OTP Law, we often hear business owners view a PIP in one of two extremes: either as a magic shield against tribunal claims, or as a mere formality before handing out a termination letter. In reality, a PIP is neither. At its core, a good PIP is a structured, compassionate effort to help an employee succeed—while building an objective paper trail should you eventually need to part ways.

If an underperforming employee later files a wrongful dismissal claim at the Tripartite Alliance for Dispute Management (TADM), mediators will look closely at whether the PIP was conducted in good faith.

1. What Makes a PIP “Legally Sound”?

Under the Tripartite Guidelines on Wrongful Dismissal, firing an employee for poor performance requires clear evidence that they were given a fair opportunity to meet reasonable expectations. To ensure your PIP holds up under legal scrutiny, focus on three pillars:

• Clear, Objective Benchmarks: Replace vague feedback (“needs better attitude”) with specific, measurable targets (“increase weekly sales calls from 10 to 20” or “submit monthly reports with zero error rates”).
• A Realistic Timeline: In Singapore, a standard PIP runs between 30 to 90 days. Expecting someone to fix complex performance issues in 5 working days is usually viewed by TADM as unreasonable and predatory.
• Genuine Support & Guidance: A PIP cannot be a “sink or swim” test. Employers must provide necessary tools, adequate training, or mentor access to help the employee bridge the gap.

2. The Step-by-Step PIP Framework

 ┌──────────────────────┐      ┌──────────────────────┐      ┌──────────────────────┐
 │   1. Alignment       │ ───► │   2. Active Coaching │ ───► │   3. Fair Assessment │
 │ • Set objective KPIs │      │ • Weekly check-ins   │      │ • Review outcomes    │
 │ • Agree on timeline  │      │ • Document progress  │      │ • Decide path forward│
 └──────────────────────┘      └──────────────────────┘      └──────────────────────┘

Step 1: The Initial Discussion & Agreement

Issue the PIP document in a face-to-face meeting. Clearly explain where the performance gaps are, why they matter to the business, and how the targets were set. Invite the employee to share if there are underlying roadblocks (e.g., lack of software access, personal difficulties, or team bottlenecks) and adjust the plan if reasonable.

Step 2: Regular Check-Ins & Contemporaneous Records

Schedule mandatory weekly review meetings throughout the PIP duration.

• Do not rely solely on verbal feedback.
• Send a brief follow-up email after each session summarizing what was discussed, what improved, and where gaps remain.
• These email trails serve as crucial contemporaneous evidence if TADM needs to verify your process later.

Step 3: The Final Evaluation

At the end of the PIP, review the cumulative results objectively against the initial benchmarks.

• If targets are met: Formally confirm in writing that the employee has successfully completed the PIP and reset expectations moving forward.
• If targets are missed: You now have clear, objective grounds to consider termination with contractual notice (or salary in lieu) under Sections 9 and 11 of the Employment Act, or to explore a Mutual Separation Agreement (MSA).

3. Common PIP Mistakes to Avoid

Clarity Brings Peace of Mind

A PIP handled with empathy and transparency removes ambiguity for everyone involved. Either your employee turns their performance around and becomes a thriving contributor, or both parties gain clarity that it is time to part ways respectfully.

If you are preparing to place an employee on a PIP and want to ensure your documentation and process are fully compliant, contact OTP Law Corporation. We are always happy to help you navigate employment matters with commercial wisdom and a human touch.