What percentage of large organizations create "performance improvement plans" before terminating employees?
Hello and thank you for asking Wonder! I understand that you are looking for the percentage of large companies that implement performance improvement plans (PIPs). You are particularly interested in U.S. corporations with more than 500 employees. The short answer is that 70% of the top 20 companies in the Fortune 500 list create a performance improvement plan before terminating employees. Below you will find a deep dive of my findings.
A search of Industry Reports show that there is currently no existing statistical data regarding PIPS in large corporations in the United States. In order to answer the question, we started by checking the top 20 companies listed in the Fortune 500 list. This ensures that our search will be limited to corporations with more than 500 employees. Information regarding the PIPs of those companies was then gathered by looking into corporate websites, trusted media sites and job openings related to PIPs. Since most companies do not publicly make available this information, we also provided some data based on employee reports in glassdoor.com. We then performed a simple calculation of percentage by dividing the total number of companies with PIPs over 20, which is the number of companies that we looked into, and then multiplied it to 100.
14 out of the 20 or 70% of the large corporations that we looked into implement a form of PIP before terminating their employees. I have organized the companies in a list below to make it easier to read.
This 2014 article discusses about The case of Langenbach v. Wal-Mart Stores, Inc. Erika Lagenbach worked for Walmart for 10 years. She was placed in PIP in 2009 when she aimed for a position as an Assistant Manager.
A former employee account of being placed in PIP for a month.
This article discusses a wrongful dismissal claim of a former ExxonMobil employee. It states in the 3rd paragraph that the employee was placed in PIP in 2010. More information regarding the Weidman v. ExxonMobil Corp., case of January 2015 may be read here.
Employee reviews on the AT&T practice show negative feedback regarding their PIP.
This job opening for PharMEDium Services, LLC, an AmerisourceBergen Company includes the implementation of a PIP as part of its job description.
An article that discusses on the poor implementation of PIPs which is allegedly being used as a way to push employees out of the door.
7. GE or General Electric
An employee post about the practice of PIP in GE.
A 2016 article that discusses the case of telephone technician who was under a PIP and was denied access to a union rep.
9. Cardinal Health
A job opening for a Clinical Team Manager which states that developing and reviewing PIPs is part of the job description.
A 2015 article that talks about a former Costco manager that was placed under PIP for several violations.
11. Walgreens Boots Alliance
A 2016 forum of former and current employees discussing the pros and cons of the PIP. This job opening for a group supervisor also lists managing PIPs as part of the responsibilities.
A job opening for a co-managerial position that lists PIP implementation as part of the job responsibilities.
The implementation of PIPs is not explicitly stated in the company website but it details performance evaluations between managers and employees and how "eligible employees" are given annual goals after said discussions.
14. Fannie Mae
According to their Service Evaluation Guide, "unacceptable performance" will cause the employee to be placed in a PIP.
On the other hand, no information regarding the implementation of PIPs were found for the companies listed below which suggests that they immediately terminate employees. We have provided a link to their coporate website and the page for employee benefits/perks when available:
2. Ford Motors
6. CVS Health
Out of the top 20 companies listed in the Fortune 500, 70% place their employees in a performance improvement plan before termination. These companies include Walmart, Verizon, AT&T and Fannie Mae. On the other hand, companies such as Ford Motors and CVS health shows no records of the creation of PIPs.
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