Dinesh Divekar
Business Mentor, Consultant And Trainer

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Hi All,
I have decided to start Quarterly Performance Review in which we will shortlist at least two lowest performing employees from each team and issue one month PIP to them. The one who is not successfull in that one month observation according to his PIP will be directly terminated.
My idea to develop this is to reduce the inefficiency in teams.
Thus, kindly suggest me if this method is appropriate or not. Also guide me with what method I can use for PIP.

Dear Swati,

You appear to have basic confusion on the concept of Performance Management System (PMS). There appears to be zeal of removal of people on account of under-performance rather than measuring the business performance as a whole. Essence of PMS lies in measuring what deserves to be measured. For this, you need to identify the direct and indirect costs associated with each department.

While managing of costs you need to make sure that while reducing one cost, some another cost does not go up. In your case at hand, you would like to reduce to the cost of under-performance however, you could increase cost of recruitment. Have you thought of that? Hire and fire policy looks fine but it makes the employees just zombies. Possibly scare of removal from the job constantly haunt them and it may degrade their morale. Will you be able to measure cost of low morale?

I recommend you taking holistic view before embarking on speedy removal of employees. By the way, earlier I had given threadbare reply on how to establish PMS in a company. The link is as below:


Though the above link pertains to IT company, the reply is applicable to all the industries. In the above link, there are several hyperlinks. Go through all the links patiently and I request you to improve your understanding of PMS. For doubt if any, you may call me on my mobile.


Dinesh Divekar

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