Most performance improvement plans don’t fail on paper. They fail in the room, in the first ten minutes, when the employee reacts in a way the manager didn’t plan for.

The conversation every manager dreads

We’ve seen this play out many times. One recent case stands out. The team ran in an open environment. Open topics, open feedback, the same rules for everyone. For most people it worked. They heard the feedback, adjusted and got better.

One team member was different. Nothing was ever his fault. Feedback bounced straight off. He needed close supervision to get basic work over the line, then complained he was being micromanaged. He felt left out of meetings he had no reason to be in. When things didn’t go his way, he sulked.

None of that is rare. Every manager who has run a PIP has seen some version of it. The employee’s reaction rarely decides the outcome. What decides it is whether you saw the reaction coming, stayed on process and wrote everything down.

This article covers what a PIP is under Australian workplace law, the six reactions you are most likely to face, how to handle each one, and how to run the process so it holds up if it ends in dismissal.

What a performance improvement plan is, and what it isn’t

A performance improvement plan is a written, time-bound plan that sets out where an employee is falling short, what good looks like, the support on offer and how progress will be measured. Its job is to give the person a genuine chance to improve.

A PIP is not a formality on the way to a dismissal you have already decided on. If you have already drafted the termination letter, you are not running a PIP. You are building evidence, and the Fair Work Commission is good at telling the difference.

There is no law that says you must use a PIP. But if a performance process ends in dismissal, the Commission will look at whether the dismissal was harsh, unjust or unreasonable. Under section 387 of the Fair Work Act 2009, it considers factors including:

• whether there was a valid reason related to the person’s capacity or conduct
• whether they were told the reason
• whether they had a genuine opportunity to respond
• whether you unreasonably refused to let them have a support person in discussions about dismissal
• where the dismissal relates to unsatisfactory performance, whether they were warned about it beforehand
• the size of the business and whether it had dedicated HR expertise

A well-run PIP ticks most of those boxes on its own. That’s why it matters.

Two more points before you start. Small business employers (fewer than 15 employees) should also follow the Small Business Fair Dismissal Code. And general protections claims can be made from day one of employment, with no minimum service period. If the employee has raised a complaint, taken sick leave or exercised any other workplace right, you need to be able to show the PIP was about performance and nothing else.

Get the groundwork right before the PIP meeting

Most PIPs that go wrong were set up to fail before the first meeting. The employee’s reaction just exposes the gaps. Before you put anyone on a plan, check you have these four things.

1. A policy that describes the process. Your performance policy sets out how underperformance is managed in your business: informal feedback first, then a PIP, then warnings, then dismissal if nothing changes. It should be issued to everyone and acknowledged. When an employee says “nobody told me this could happen”, the signed acknowledgement is your answer. HR Command’s lawyer-drafted Performance, Counselling and Discipline Policy covers informal counselling, PIPs with clear measures and review dates, warnings, procedural fairness and record keeping.

2. A position description that says what the job is. You can’t measure someone against a standard that was never written down. If the role has drifted since they were hired, update the position description first and talk it through with them. Don’t spring a new standard on someone in a PIP meeting.

3. A record of informal feedback. The Commission looks for evidence that you raised concerns before going formal. Dated notes from one-on-ones, emails following up a conversation, examples of the work itself. In an open-feedback team you may have given a lot of feedback verbally. That counts, but only if you wrote it down at the time.

4. A clear view of the gap. Write down specific examples, why each one matters and what the standard is. The Fair Work Ombudsman’s initial steps checklist is a useful prompt. Then ask the uncomfortable question: is something else going on? Health, family, workload, a bad manager. Keep an open mind until you have asked.

Once you have that, you are ready. Now for the part nobody trains you for.

The six reactions to a PIP you’ll see

People don’t react to a PIP at random. The same six patterns turn up again and again, and plenty of employees cycle through two or three of them in the same meeting. Knowing them in advance means you hear the reaction for what it is, and you don’t get pulled off course.

1The Deflector

What it sounds like“That project was late because marketing didn’t send the brief.” “Nobody told me that was my job.” “Sarah does the same thing and you’re not putting her on a plan.”

The Deflector takes no responsibility for anything. Every example you raise has an explanation, and the explanation always involves someone else. It was the first red flag in the case above. In an open team, where everyone owns their mistakes out loud, it stands out fast.

What’s underneath: Usually fear. Admitting fault feels like handing you the rope. Sometimes it’s a long-held habit that has worked for them in past jobs.

How to handle it:

• Stick to facts you can show. Dates, deliverables, emails, the actual work. “The report was due on the 3rd and arrived on the 10th” is hard to argue with. “You’re always late” is not.
• Don’t debate every excuse in the room. Note it, say you’ll look into it, and move on. If the excuse is genuine, fix the cause. If it isn’t, the record will show that.
• Take comparisons to other staff off the table. “I’m happy to talk about your role and your work. I won’t discuss other people’s performance with you.”
• Make the PIP about the future. You don’t need them to admit fault. You need them to meet the standard over the next six to eight weeks.

What to document: Each example and their explanation for it. If you check an excuse and it doesn’t stand up, note what you found. If it does stand up, say so and remove that example. Fairness cuts both ways.

2The Contradiction

What it sounds like“I don’t need you checking everything I do.” Followed a week later by: “Nobody told me what you wanted. How was I supposed to know?”

This one is maddening. The employee can’t deliver without close direction, then resents the direction when they get it. They want the freedom of a senior role and the safety net of a junior one. Leave them alone and the work slips. Step in and you’re a micromanager.

What’s underneath: A gap between how capable they believe they are and how capable they are right now. Close supervision makes that gap visible, which is why it stings.

How to handle it:

• Name it openly, without judgement. “When I step back, the work misses the standard. When I step in, you feel micromanaged. Neither of us likes that, so let’s agree how it works for the next eight weeks.”
• Make the level of oversight part of the PIP. Agree on check-in frequency, what gets reviewed before it goes out, and when that steps down. Put it in writing.
• Tie autonomy to results. “Two weeks of deliverables on time and to standard, and we move from daily check-ins to twice a week.” It gives them something to aim for and takes the emotion out of it.
• Be consistent. If you agreed to review drafts on Tuesdays, review drafts on Tuesdays. Skipping it hands them an excuse.

3The Outsider

What it sounds like“I wasn’t invited to the planning meeting.” “Everyone else knew about the change before me.” “I feel like I’m being pushed out.”

The Outsider turns the PIP into a story about exclusion. The focus shifts from their work to who is in which meeting, who got copied on which email and who had lunch with whom. In the case above, the employee felt left out of meetings he had no reason to attend. The meetings had nothing to do with his role. That didn’t matter. Not being there was proof, in his mind, that he was being sidelined.

What’s underneath: Status anxiety. A PIP makes people feel exposed, and they read every signal through that lens. Occasionally there is something real in it. If someone has been quietly cut out of work they need to do their job, that’s a problem you have to fix.

How to handle it:

• Separate two questions. Does this person need to be in this meeting to do their job? If yes, invite them. If no, explain who the meeting is for and why.
• Don’t add them to meetings to keep the peace. It wastes everyone’s time and sends the message that complaining works.
• Make sure they get the information they need. If a meeting produces decisions that affect their work, share the outcome promptly.
• Bring it back to the plan. “I hear that you feel left out. The PIP is about these three areas of your work. Let’s focus there.”

4The Sulker

What it sounds likeMostly silence. One-word answers. A camera that stays off. Doors closed a bit harder than they need to be. Effort that drops to the bare minimum the day after feedback.

The Sulker doesn’t argue. They withdraw, and they make sure everyone notices. The mood spreads. Colleagues start tiptoeing around them, and the manager starts softening feedback to avoid another bad week. That is exactly the outcome sulking is designed to get.

What’s underneath: Hurt pride, embarrassment, sometimes a learned pattern that has worked before. But don’t assume. A sharp drop in mood can also be a sign that someone is genuinely struggling.

How to handle it:

• Check in on wellbeing, privately and sincerely. “You’ve seemed flat since our last meeting. How are you going?” Offer your EAP if you have one. Write down that you asked.
• Don’t soften the standard in response. Kindness in how you deliver feedback is good. Changing the feedback because someone sulked is not.
• Name the behaviour if it affects the team. Withdrawal is their business. Ignoring colleagues, refusing to collaborate or visibly downing tools is a conduct issue. Address it calmly and separately from the PIP.
• Keep the review meetings going. Don’t let silence stall the plan. If they won’t engage in a meeting, note that, summarise in writing afterwards and invite a written response.

5The Escalator

What it sounds like“This is bullying.” “I’m putting in a formal complaint about you.” “I’ve spoken to a lawyer.” Or a medical certificate for stress leave, arriving the morning of the next review meeting.

The Escalator moves the fight to new ground. Instead of answering the performance concerns, they raise a complaint, a claim or an absence that puts the process on hold. Some do it tactically. Many do it because they genuinely feel targeted.

What’s underneath: A sense of threat, sometimes real, sometimes not. You can’t tell which from the outside, so you treat every complaint as genuine until you have looked at it properly.

How to handle it:

• Take the complaint seriously and run it through your Broad Grievance Procedure. If it’s about the manager running the PIP, someone else should assess it. For serious allegations, follow your Workplace Investigation Procedure and consider an external investigator.
• Decide what happens to the PIP while that runs. Sometimes a short pause is sensible. Sometimes the PIP continues with a different manager overseeing it. Write down what you decided and why.
• Never punish the complaint. Making a complaint about your employment is a workplace right under the Fair Work Act. If any decision you make looks connected to the complaint, you invite a general protections claim. In those claims, the employer has to prove the complaint played no part in the decision.
• Respect sick leave. An employee on personal leave with a certificate is on leave. Pause the review schedule, keep contact light and supportive, and pick it up when they return. If the absence runs long, get advice before you do anything else.
• Don’t try to argue them out of a lawyer’s letter. Get your own advice.

6The Owner

What it sounds like“Fair enough. I knew some of this was coming.” “What does good look like?” “Can I get some help with the reporting side?”

The Owner is rarer than the others, and it’s the reaction a PIP is designed for. They might be upset. They might push back on one or two examples, and sometimes they’ll be right. But they accept the gap is real and they want to close it.

What’s underneath: Self-awareness and a reasonable level of trust in you. Often they already knew things weren’t going well and are relieved someone finally said it clearly.

How to handle it:

• Follow through on every bit of support you promised. Training, a buddy, clearer briefs. If you don’t deliver, you’ve broken the deal.
• Recognise progress out loud, in the review meetings and in writing.
• Close the PIP formally when they meet the standard. Tell them it’s finished and put it on their file. Don’t let it drift, and don’t leave it hanging over them.
• Don’t treat them as a problem forever. A closed PIP should stay closed. If the issue comes back later, you start the conversation again rather than picking up where you left off.

The lesson from the Owner: The open-feedback team described at the start works because most people respond like this. A PIP isn’t a punishment. For the right person it’s the clearest feedback they’ll get all year.

Running a PIP so it holds up

Whatever reaction you get, the plan itself has to be solid. A good performance improvement plan is specific, measurable, supported and short enough that both sides can stay focused. Here is what it needs.

Run the first meeting properly. Tell them in advance what the meeting is about and that they can bring a support person. Have a note-taker. Walk through the gaps, the standard and the support. Then stop talking and let them respond. Their response goes in the record and you have to genuinely consider it. The Fair Work Ombudsman’s formal steps checklist is a good pre-meeting check.

Put it in writing the same day. Send the PIP document and a short summary of the meeting. Ask them to sign to confirm they received it. They don’t have to agree with it.

Hold every review. Each review covers progress against each item, with evidence, and what happens before the next one. Short written notes after each meeting are enough. Missing reviews is the most common way a PIP falls apart, because it tells the employee and the Commission that you weren’t serious.

Keep it separate from conduct. If the employee does something that is misconduct during the PIP, like abusing a colleague, deal with it through your conduct process. Don’t fold it into the performance plan. They follow different paths and mixing them confuses both.

When the PIP ends

Every PIP ends with a decision. It has to be a decision you make at the end, based on what happened during the plan, not one you made before it started.

Standard met. Close the PIP in writing. Thank them. Move on.

Clear progress, not quite there. Extend once, with a new end date and the reasons in writing. Once. A second or third extension tells the Commission the standard was unrealistic or the process wasn’t serious.

Standard not met. Issue a formal warning. There is no rule that says you need three warnings. But before a dismissal for performance, the employee must have been warned about that specific performance and given a real chance to improve. The warning should state the consequence plainly. HR Command’s First and Final Warning Letters are built for this.

Still not met after the warning. Put your reasons in a Show Cause Letter. Set out the examples, say that termination is being considered, give them a reasonable time to respond and offer a support person. Then genuinely read what they say. If they raise something new, like a health issue or a workload problem nobody knew about, deal with it before you decide.

If you decide to dismiss. The reason in the Termination Letter must match the reason you put to them. Poor performance is not serious misconduct, so notice under the National Employment Standards applies, with an extra week for employees over 45 with at least two years of service. They have 21 days to lodge an unfair dismissal application, so expect the paperwork to be read closely.

How HR Command keeps the PIP process on track

You can’t control how someone reacts to a PIP. You can control the process, the paperwork and the record. That’s what HR Command is built for.

The Advice Line is the part people underrate. Most PIPs that end up in the Commission didn’t go wrong at the dismissal. They went wrong three weeks earlier, when the employee lodged a complaint or went on leave and the manager guessed at what to do next. A quick call at that point costs far less than any claim.

Performance improvement plan FAQs

Sources

• Fair Work Act 2009 (Cth), including section 387 (unfair dismissal factors)
• Fair Work Ombudsman, Managing underperformance: initial steps checklist
• Fair Work Ombudsman, Managing underperformance: formal steps checklist

This article is general information only and is not legal advice. HR Command works in partnership with Cowell Clarke Commercial Lawyers. For advice on your situation, HR Command clients can use the Workplace Advice Line.