The HR Legal Hub
Performance Improvement Plans
No Pakistani statute prescribes a PIP — but for workmen, poor performance is only actionable as a documented pattern, and a well-run PIP is precisely that document. Here is how to build one that supports a lawful exit instead of undermining it.
The performance improvement plan arrived in Pakistani workplaces through multinational HR manuals, and it shows: most templates in circulation assume at-will employment that Pakistani law does not provide. Used with an understanding of the local framework, a PIP is genuinely valuable — not because any statute asks for it, but because of what the statutes do ask for when the underperformer is a workman. The position described here is current as of July 2026 and varies by province in the details flagged below.
What Pakistani law actually says about poor performance
Nothing, by that name. No federal or provincial statute mentions performance improvement plans, and none prescribes how capability is to be managed. The legal significance of performance appears indirectly, in two places.
For workmen — the operational, clerical, and manual workforce protected by the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 and its provincial successors in Sindh (2015), Khyber Pakhtunkhwa (2013), and Balochistan [STATUTE — TO BE VERIFIED BY REVIEWING LAWYER] — the misconduct list includes habitual negligence or neglect of work. That is the ground on which sustained underperformance can support dismissal, and the load-bearing word is habitual. One bad quarter is not habitual. Habituality is a pattern, a pattern must be proved, and proof means contemporaneous records: standards that were set, communicated, measured, and repeatedly missed despite warning. A properly run PIP is exactly that record. Even with it, dismissal on this ground still travels through the full disciplinary process — charge sheet, opportunity to explain, fair inquiry — covered in the disciplinary-process article in this hub.
For non-workmen, performance is a contract matter. The employer can terminate on notice without proving anything, and claims sound in damages. But an employer who documents nothing is betting that the departing manager will not allege the dismissal was really retaliation, discrimination, or a device to defeat an incentive payment. A PIP file is what makes the stated reason the believable one.
Probation is not a PIP — use it first
The standing-orders lineage recognises the probationer as a distinct employment status: a workman provisionally employed to fill a permanent vacancy who has not completed the probation period — customarily three months, with provincial variation [PROBATION PERIODS AND EXTENSION RULES BY PROVINCE — TO BE VERIFIED BY REVIEWING LAWYER]. During probation, suitability is the very question, and parting ways is procedurally at its simplest.
The operational rule: decide before confirmation. Diarise probation end-dates, run a real assessment in the final fortnight, and either confirm in writing, extend in writing where the applicable law permits, or end the engagement. The common failure is drift — probation lapses, the employee is treated as confirmed, and six months later the company reaches for a PIP to solve a problem it could have addressed with a probation decision. A PIP is a tool for confirmed employees; probation is its own, better tool for new ones.
Capability or conduct — pick the right track
Before drafting anything, separate two things that get blurred in practice. Capability is the employee trying and falling short: missed targets, slow output, quality below standard. Conduct is the employee choosing behaviour: absenteeism, insubordination, dishonesty, misuse of systems. Conduct belongs in the disciplinary process from the outset. Routing genuine misconduct through a PIP has a perverse effect — it recharacterises the behaviour as a performance gap, delays the process the law actually requires, and can be read later as the employer condoning the conduct. Mixed cases exist; where they do, run the disciplinary track for the conduct and let capability be dealt with on its own timeline.
Building a plan that stands up
Every element of a defensible PIP answers a question a sceptical later reader will ask.
Was the standard clear? Define each expectation so an outsider could verify compliance: units, error rates, deadlines, named deliverables. "Improve communication" is not a standard; "respond to client escalations within one working day, measured over the plan period" is.
Was it fair? The baseline evidence — appraisals, data, escalations — should predate the plan, and the standards should match the role's grade and the resources available. A PIP demanding what the rest of the team does not achieve is a pretext wearing a template.
Was it real? State the support the company will give — training, supervision time, tool access — and give it. Fix review meetings at set intervals, hold them, and write each one up within a day. Set a duration in which cure is genuinely possible; thirty to ninety days is the working range in practice.
Did the employee know the stakes? The plan should state, plainly, what follows if it is not met. Have the employee sign an acknowledgment of receipt — and if they refuse, record delivery and move on. The signature proves notice, nothing more.
Did the outcome follow the evidence? Close every plan in writing: passed, extended with reasons, or failed with the shortfalls summarised against the standards. Record improvement when it happens. A file in which nothing the employee did was ever good enough persuades no one.
The exits when the plan fails
For a workman, two lawful routes exist. Termination simpliciter — ending employment with the statutory notice or wages in lieu, all accrued dues including gratuity, and a stated reason where the provincial law requires one — is the ordinary route for a capability exit, and the PIP file is what defends it if the labour court examines whether the termination was in truth punitive. The alternative, dismissal for habitual neglect as misconduct, requires the full charge-sheet-and-inquiry process on top of the PIP record; it is the harder road and worth taking only where the record is strong and the distinction matters, since dismissal for misconduct affects dues and how the exit reads. What is never lawful is the hybrid: a misconduct-style dismissal without the process, dressed in performance language. Labour courts look through it, and the remedy for a workman is reinstatement with back benefits.
For a non-workman, the exit is contractual notice or payment in lieu, with any contractual procedure honoured to the letter — an employer bound by its own handbook procedure must follow it even where statute is silent.
The sham-PIP problem
Courts and ombudspersons see PIPs used as devices, and the tells are consistent: a plan opened days after the employee filed a grievance or harassment complaint, sought maternity leave, or became active in a union; standards no colleague is held to; reviews scheduled and skipped; a "failed" outcome written before the final review. The industrial relations laws' unfair-labour-practice provisions and the anti-retaliation architecture of the harassment legislation both reach this conduct, and timing alone can carry the inference. The same caution applies to the resignation shortcut — telling an employee mid-PIP to resign or be dismissed produces resignations that are later challenged as dismissals, with the PIP itself exhibited as the instrument of coercion. If the file cannot justify a dismissal, it cannot justify extracting a resignation either.
Terms during the plan
Hold the employment terms steady while the plan runs. Agreed wages cannot be docked for underperformance — the Payment of Wages Act, 1936 lineage confines permissible deductions narrowly for workmen — and withholding an increment or promotion is a listed punishment under the standing-orders framework, available only through the disciplinary process. Demotion mid-PIP is likewise a punishment, not a management adjustment. The PIP changes what is measured, not what was promised; the moment it starts changing pay or grade, it has become discipline without the process discipline requires.
The Checklist
PIP design and documentation checklist
The elements a performance improvement plan needs before, during, and at the end, to hold up if the exit is later challenged.
- Classify the employee first — workman or non-workman — because the classification decides which exit routes exist if the plan fails.
- Separate capability from conduct before drafting: send genuine misconduct down the disciplinary route, not into a PIP.
- Assemble the baseline evidence — appraisals, output data, missed targets, client escalations — before the PIP conversation, not after.
- Check the file for recent grievances, harassment complaints, leave disputes, or union activity by the employee, and take advice before proceeding if any exist.
- Define each performance standard so a stranger could verify it: numbers, dates, and deliverables, not adjectives.
- Set a duration the deficiencies can realistically be cured in — thirty to ninety days is the usual working range.
- Name the support the company will provide — training, tools, supervision time — and then actually provide it.
- Schedule review meetings at fixed intervals and put each one in writing within a day of holding it.
- State the consequences of not meeting the plan in plain words the employee reads before signing.
- Ask the employee to sign as acknowledgment of receipt; if they refuse, record delivery before a witness and proceed.
- Keep pay, grade, and reporting lines unchanged during the plan unless the contract clearly permits otherwise.
- Hold the goalposts still: amend the plan only in writing, with reasons, and never mid-review.
- Record the mid-point review honestly — including improvement, because a file that only records failure reads as staged.
- Close the plan with a written outcome: passed, extended with reasons, or failed with the evidence summarised.
- If the outcome is exit, choose the lawful route for the classification — termination with notice and dues for a workman, contractual notice for a non-workman — and pay everything owed at once.
- Never present resignation as the only alternative to the PIP; a forced resignation is challenged as a dismissal.
Questions, Answered
What clients ask most.
No statute requires one by name. But for a workman, dismissal on performance grounds must rest on the standing-orders framework, where the relevant ground — habitual negligence or neglect of work — demands a proven pattern, and a documented PIP is the cleanest way to establish it. For non-workmen it is not required either, but it converts a contestable dismissal into a documented one.
Long enough that the deficiency could genuinely be cured within it. Thirty days suits discrete, measurable gaps; sixty to ninety days suits broader role-level underperformance. A seven-day PIP is read by every later reader — judge, ombudsperson, or opposing counsel — as a termination memo with a delay.
A PIP is a management instruction and record, not a contract needing consent. If the employee declines to sign, record that the document was delivered and explained, ideally before a witness, and proceed. Do not discipline the refusal to sign itself; the acknowledgment matters, the signature does not.
Do not cut agreed pay unilaterally — for workmen the payment-of-wages legislation strictly limits deductions, and withholding an increment is itself a listed punishment under the standing-orders framework, which means it needs the disciplinary process, not a PIP. Discretionary bonus decisions follow the contract's own terms.
Usually not. Probation exists precisely to assess suitability, and non-confirmation is handled on its own, lighter footing — provided you act before probation ends or is deemed to have ended. Letting probation lapse into confirmation and then opening a PIP forfeits the easiest decision point the law gives you.
Not from zero. The first PIP is part of the pattern; a relapse can justify a shorter, sharper second plan or, for a workman with a sufficiently documented history, a move to the formal process on habitual-neglect grounds. What you cannot do is treat the earlier pass as if it never happened — it is in the file you built.
Prepared by The First Counsel · As of 2026-07-12 · Pending professional review — statements flagged in the text are being verified
This publication is provided for general information only. It is not legal advice, and neither reading it nor corresponding with the firm about it creates a lawyer–client relationship. The position stated must be verified against current law before it is relied upon.