Calgary Employment Lawyers Advising Employers on Performance Improvement Plans

Managing an employee’s performance can be challenging. Employers need to address legitimate performance concerns while treating employees fairly and reducing the risk of a wrongful dismissal or human rights claim.

A Performance Improvement Plan (PIP) is one tool Alberta employers can use to address ongoing performance concerns. A well-drafted PIP identifies what needs to improve, sets clear expectations and gives the employee a reasonable opportunity to meet those expectations.

Depending on the circumstances and the employer’s policies, a PIP may form part of a performance management or progressive discipline process. It can also become important evidence if the employment relationship later ends.

What Is a Performance Improvement Plan?

A Performance Improvement Plan is a written plan designed to address specific concerns about an employee’s work performance.

A PIP will typically identify:

• The employer’s expectations for the employee’s role;
• The areas in which performance is falling short;
• The standard the employee is expected to meet;
• The steps the employee should take to improve;
• The support or resources the employer will provide;
• How and when progress will be measured; and
• The potential consequences if sufficient improvement does not occur.

A PIP should not simply document everything an employer believes an employee has done wrong. Its primary purpose should be to communicate concerns clearly and give the employee a meaningful opportunity to improve.

When Should an Alberta Employer Use a Performance Improvement Plan?

A PIP can be useful when an employee has ongoing or recurring performance problems that have not been resolved through ordinary coaching, feedback or supervision.

Examples may include:

• Repeatedly missing reasonable deadlines;
• Consistently failing to meet measurable performance standards;
• Recurring errors or quality-control concerns;
• Failing to complete essential duties of the position;
• Ongoing productivity concerns; or
• Performance that remains below expectations after coaching or feedback.

A PIP will not be appropriate in every situation.

Performance Problems vs. Misconduct

Employers should distinguish between poor performance and misconduct.

Poor performance may occur when an employee is trying to perform the job but is not consistently meeting the required standard.

Misconduct involves behaviour rather than an inability to meet a performance standard. Depending on the circumstances, examples could include:

• Deliberately refusing reasonable instructions;
• Dishonesty;
• Harassment;
• Workplace violence;
• Serious breaches of workplace policies; or
• Other intentional misconduct.

Different legal considerations may apply to misconduct. Serious misconduct may justify more significant discipline and, in exceptional circumstances, termination for just cause without progressive discipline.

However, not every incident of misconduct amounts to just cause. The seriousness of the conduct, the employee’s position and history, the surrounding circumstances and whether the employment relationship has been fundamentally damaged must all be considered. See our page on Discipline for more information.

Before Implementing a PIP: Identify the Real Performance Problem

Before placing an employee on a PIP, an employer should understand why the employee is struggling. See our page on Employee Performance for more information. 

Consider Whether There Is a Duty to Accommodate

Performance concerns can sometimes be connected to a physical or mental disability or another characteristic protected by the Alberta Human Rights Act.

Employers should be particularly careful where:

• The employee has disclosed a medical condition;
• The employee has requested workplace accommodation;
• There has been a significant and unexplained change in performance;
• Attendance and performance concerns appear connected to illness or disability; or
• The employer has other information suggesting that a protected characteristic may be affecting the employee’s ability to work.

Depending on the circumstances, an employer may have a duty to inquire rather than simply treating the issue as poor performance.

Where accommodation is required, an employer must take reasonable steps to accommodate the employee to the point of undue hardship. See our pages on Workplace Human Rights and Accommodation for more information.

A PIP should not require an employee to meet standards that conflict with an accommodation the employer is legally required to provide.

What Should an Effective Performance Improvement Plan Include?

An effective PIP should be specific, objective and realistic.

1. Clearly Identify the Performance Concern

Avoid vague statements such as:

• “Your attitude needs to improve.”
• “You need to work harder.”
• “Management is unhappy with your performance.”

Instead, identify the particular concern and, where appropriate, provide examples.

For example:

“Three client reports submitted during the past six weeks contained material calculation errors requiring correction before delivery to the client.”

Specific examples help the employee understand the problem and reduce disagreements about what the PIP is intended to address.

2. Explain the Required Standard

The employee should understand what acceptable performance looks like.

Where possible, expectations should be:

• Specific;
• Measurable;
• Connected to the employee’s actual duties;
• Reasonable; and
• Within the employee’s ability to control.

The standard should also be consistent with expectations imposed on employees performing comparable work, subject to any required workplace accommodation.

3. Explain How the Employee Can Improve

A good PIP should provide a roadmap.

Depending on the problem, this may include:

• Additional training;
• Mentoring or coaching;
• More frequent supervision;
• Revised workflow procedures;
• Checklists or quality-control measures;
• Regular meetings with a supervisor; or
• Specific targets or milestones.

The goal should be to give the employee a genuine opportunity to succeed.

4. Set a Reasonable Review Period

There is no fixed legal period that every PIP must last.

The appropriate timeframe depends on factors such as:

• The employee’s position;
• The nature of the performance concern;
• How quickly improvement can reasonably be demonstrated;
• The employee’s length of service and performance history;
• The training or support required; and
• The seriousness of the deficiencies.

Some issues may be measurable within several weeks. Others may require a longer period.

The important question is whether the employee has been given a reasonable and meaningful opportunity to improve.

5. Schedule Regular Follow-Up Meetings

Employers should not issue a PIP and then wait until the end of the review period to assess the employee.

Schedule regular meetings to:

• Review progress;
• Discuss areas that remain deficient;
• Recognize improvement;
• Identify additional support that may be required;
• Address questions from the employee; and
• Confirm the next performance objectives.

Important discussions should be documented.

6. Explain the Possible Consequences

The PIP should clearly explain that failure to achieve and maintain the required level of performance may result in further action.

Depending on the circumstances, that could include:

• Further performance management;
• Additional discipline, where appropriate;
• Reassessment of the employee’s suitability for the role; or
• Termination of employment.

Employers should be cautious about promising that a specific consequence will automatically occur.

They should also obtain legal advice before imposing measures such as an involuntary demotion, significant reduction in responsibilities, reduction in compensation or unpaid suspension. Depending on the employment contract and surrounding circumstances, significant unilateral changes to employment may create constructive dismissal concerns.

How Should an Employer Present a PIP?

A PIP should normally be discussed with the employee in a private meeting.

The employer should:

• Explain the concerns calmly and objectively;
• Review the PIP with the employee;
• Give the employee an opportunity to respond;
• Ask whether there are circumstances affecting their performance;
• Listen to requests for additional training, resources or support;
• Address any potential accommodation issues; and
• Clearly explain the next review date and expectations going forward.

An employer should avoid presenting the decision as predetermined.

If an employee provides new information that could explain their performance problems, the employer should consider that information before deciding what further action is appropriate.

Can a Performance Improvement Plan Lead to Termination for Just Cause?

Potentially—but employers should approach this issue carefully.

A PIP does not automatically establish just cause for dismissal.

An Alberta employer alleging just cause bears the burden of establishing that the circumstances were sufficiently serious to justify ending the employment relationship without notice or termination pay.

Where the allegation is based on ongoing poor performance or incompetence, relevant considerations can include whether:

• The employer established reasonable and objective performance standards;
• The employee knew what was expected;
• The employee was clearly told where their performance was deficient;
• The employee understood that their employment could be in jeopardy if performance did not improve;
• Appropriate training or support was provided;
• The employee received a reasonable opportunity to improve;
• Performance continued to fall materially below the required standard; and
• The deficiencies were sufficiently serious in the context of the employment relationship.

Courts and tribunals assess all of the circumstances. There is no automatic number of warnings or PIPs that creates just cause.

Because the consequences of incorrectly alleging just cause can be significant, employers should obtain legal advice before terminating an employee for cause based primarily on performance concerns.

What If Performance Does Not Improve?

If an employee does not meet the expectations in the PIP, the employer should review the entire situation before deciding what to do next.

Consider:

• Did the employee receive a fair opportunity to improve?
• Were the expectations reasonable and clearly communicated?
• Did the employer provide the promised support?
• Has there been meaningful improvement, even if every target was not achieved?
• Have new performance issues arisen?
• Is accommodation required?
• Is further coaching or discipline appropriate?
• Is continued employment feasible?
• If termination is being considered, will it be with cause or without cause?

Termination without cause and termination for just cause have very different legal consequences.

Before making the final decision, employers should review the employee’s employment agreement, workplace policies, performance history and applicable employment and human rights obligations. In many cases, employers should seek legal advice as well.

Do Employers Need a PIP Before Terminating an Employee?

Not necessarily.

There is no general rule requiring every Alberta employer to use a Performance Improvement Plan before ending employment.

In many non-unionized workplaces, an employer may terminate employment without cause provided it complies with the employee’s contractual, statutory and common-law entitlements and the termination is not otherwise unlawful.

A PIP becomes particularly important where an employer is attempting to correct ongoing performance problems or may later seek to rely on those problems as grounds for just cause.

Different rules may apply in unionized workplaces, federally regulated workplaces and other specialized employment relationships.

Getz Collins and Associates: Performance Management Advice for Alberta Employers

Performance management is rarely just a documentation exercise. How an employer identifies a problem, communicates expectations and gives an employee an opportunity to respond can affect both the workplace relationship and the employer’s legal risk.

The employment lawyers at Getz Collins and Associates advise Alberta employers on performance management, progressive discipline and employee termination.

We can assist employers with:

• Reviewing and drafting Performance Improvement Plans;
• Developing appropriate performance management strategies;
• Addressing performance concerns involving disability or workplace accommodation;
• Preparing written warnings and disciplinary documentation;
• Assessing whether just cause may exist;
• Reviewing employment agreements and workplace policies; and
• Planning and implementing employee terminations.

Obtaining advice early can help employers address performance problems fairly while reducing the risk of wrongful dismissal or human rights [link to Workplace Human Rights & Accommodation page] claims.

From our Calgary office, Getz Collins and Associates advises businesses and employers throughout Alberta, including Calgary, Airdrie, Cochrane, Okotoks, Drumheller, Chestermere and surrounding communities.

Call 587-391-5600 or contact us online to schedule a consultation with an employment lawyer.