19 June 2023

Performance Improvement Plan: 5 key points to consider

By Seliz Demirci

Termination of the employment agreement due to unsatisfactory performance is possible under Dutch employment law.

You can only be dismissed for unsatisfactory performance if your employer has given you sufficient opportunity to improve your performance. This is also known as a Performance Improvement Plan (“PIP”).

Below are 5 key points you need to know before starting a PIP.

1. Are you obliged to cooperate with a PIP?

In general, yes. An employer has the right to assess the performance of employees and provide instructions on how to do develop and improve. That being said, the employer must be able to demonstrate that improvement is required. Usually, one or more negative performance evaluations precede the start of a process of improvement.

2. What exactly does a PIP look like?

The law does not describe what a good improvement plan should look like, but from the many rulings of judges on this point, you can say that a proper PIP meets the following requirements:

  • The PIP must be in writing and so must the interim evaluations;
  • It must contain concrete and measurable improvement areas;
  • The improvement areas must also be realistic and achievable;
  • The employer should actively support the employee during the PIP. What this support entails varies from case to case and may consist of ‘training on the job’ but also of offering training or a course. Involving a coach or mentor is also not unusual;
  • The PIP should be evaluated periodically in between. It is then discussed what went well or not (yet) well in the past period.

3. What is the duration of a PIP?

The law does not specify what the duration of a PIP should be. In case law, improvement processes of 3 months to 1 year are considered acceptable. The important thing is that the PIP is at least long enough to allow the employee to actually improve.

The following factors play a role in the length of a PIP:

  • The content and level of the position;
  • The employee’s level of education;
  • The nature and degree of the underperformance;
  • The duration of the employment;
  • Previous efforts made to improve performance;
  • The extent to which the employee is open to criticism and willing to engage during the PIP.

4. What can you do if you disagree with the progress of the PIP?

Record this, for example with an email message. Let your employer know in the interim that you do not agree with the way the PIP is going and why.

5. Can you be dismissed if the PIP is not successfully completed?

This is indeed possible. However, it must then be clear that your employer has given you a realistic and serious chance to improve. You can also expect that your employer has offered the necessary support to make the improvement process a success. Moreover, your employer is obliged to investigate whether you can be redeployed to another suitable position within the company.

More information

Would you like to discuss a Performance Improvement Plan or do you have another legal question? Please do not hesitate to contact me directly.

Seliz Demirci

Seliz Demirci

Lawyer

Within the Employment & Pension law section, Seliz advises national and international employers and employees on various employment law issues.

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