For too long, PIPs have functioned as little more than an exercise to check-the-box for HR and Legal prior to letting someone go. They have been strictly punitive and reactive rather than positive and proactive. But what if PIPs were reimagined as development tools? What if, instead of being the equivalent of an “Imminent Dismissal Plan,” they became “Proactive Performance Improvement Plans”– a structured way to reset expectations, strengthen coaching, and invest in the growth of producers?
A costly habit: PIPs as termination tools
MarshBerry research shows that PIPs remain the most common accountability strategy in the brokerage industry, far outpacing alternatives like compensation adjustments. Yet in most firms, they’re deployed too late. By the time managers resort to a PIP, the decision to part ways with the employee has often already been made.
Two significant issues emerge from this situation: First, while most leaders say that PIPs are the process they use to manage underperforming producers, in point of fact most firms lack a prescribed, well-defined process for putting a PIP in place. This simply underscores the perfunctory, check the box nature of the exercise. Second, reliance on PIPs as an exit ramp can prove expensive. Recruiting, onboarding, and training replacements – particularly producers – can cost far more than developing the personnel you already have. Harvard Business Review underscores this point: “Replacing employees is costly, while coaching and development nearly always offer a higher return.”1
Shifting the purpose of a PIP to be proactive
A true PIP should not be about punishment. Its real value lies in:
- Clarifying expectations. Whether performance is good or bad only makes sense against clearly defined expectations. The PIP provides an opportunity to put everyone on the same page, a page on which expectations for the individual producer are spelled out in black and white.
- Setting controllable goals. Most PIPs focus on lagging goals, which set expectations based on after-effort metrics such as “bring in $100,000 in incremental revenue.” Instead, PIPs must hold producers accountable for leading goals, which are actions completely under the producer’s control, such as creating prospecting lists, call preparation, follow-up cadence – the very efforts that will lead to the desired results.
- Providing coaching and support. The PIP should include a commitment on the leader’s part to stay involved at clearly defined checkpoints and intervals along the way. For example, the proactive PIP encourages leaders to lean into their responsibility to develop talent, not simply manage metrics. Once again, this requires focusing on lead measures instead of lag measures. For example, managers can require weekly prospecting plans that detail accounts, follow-ups, and networking events.
By redirecting attention to controllable inputs, firms create a roadmap that helps struggling producers correct course. Especially in today’s market, where attracting and retaining talent is a challenge, firms that treat PIPs as a proactive tool can reap at least three benefits:
- Preemption – Challenges are identified early, not after frustration builds to the point where separation feels inevitable.
- Positivity – The PIP is positioned as an investment. The message should be, “We’re invested in your success, and this is a tool to help you get there.”
- Productivity – Concrete, coachable action-steps address root causes (e.g., refining cold-call skills, developing stronger value propositions, or helping producers break out of comfort zones).
The younger workforce today values coaching, mentoring, and development. Reframing PIPs as a growth tool – perhaps even renaming the process – aligns with the new generation’s expectations for constructive feedback and ongoing support.
Leadership’s role: Starting earlier
Not every performance problem can be solved. But at a minimum, underperforming producers must bring an internal drive to perform – they have to care. If that spark exists, then leadership has a responsibility to nurture it and try to turn that drive into success. Many performance issues are rooted not in apathy, but in lack of confidence, reluctance to face rejection, or unclear expectations. Strong leaders can address those barriers by stepping in sooner, before small cracks become unfixable fractures. High-growth firms already know that regular evaluation and early intervention are critical. Proactive PIPs should be part of that broader performance culture in which:
- Expectations are set early and reinforced often – for everyone.
- Coaching is structured, consistent, and tailored to individual needs.
- Underperformance is addressed with curiosity (Why isn’t this working?) rather than judgment (Why aren’t you working?)
The ultimate goal is not about completing a process – rather it’s about maximizing the investment that a firm has already made in it’s people – and to increase the odds that employees who fall behind can get back on track and thrive.
In an industry where talent is scarce (and costly to replace), rethinking PIPs as Proactive Performance Improvement Plans is emerging as both a competitive advantage and a cultural necessity. Done right, PIPs can become an engine of development, retention, and productivity — transforming what has long been a dark cloud into a ray of light leading to success.
