A performance improvement plan (PIP) is a written, time-limited plan that tells an employee exactly where their work falls short, what standard is expected, what help the company will give and when progress will be reviewed. In Singapore it is not required by statute, but it is the most practical way to prove poor performance if you later dismiss with notice. Under the Tripartite Guidelines on Wrongful Dismissal, the employer must substantiate poor performance when it is the stated reason for dismissal.
Why does a PIP matter if the employee may later claim wrongful dismissal?
The Employment Act allows either side to end a contract of service with notice, and a dismissal with notice is presumed not to be wrongful. That presumption changes when you give poor performance as the reason. The Tripartite Guidelines on Wrongful Dismissal say that where poor performance is cited, the employer must prove it, and a dismissal is wrongful if the employer cannot.
The Guidelines also say that poor performance is not a ground for dismissal without notice. Only misconduct is. Their illustration of a lawful dismissal involves an employee whose shortcomings were documented in performance reviews and did not improve. A PIP creates that kind of record in a structured way. For general principles, see our guide to performance management and documentation. This article focuses on running the plan itself.
When is a PIP the right tool?
A PIP suits a capability problem: the employee does not meet agreed standards of output, quality or skill and may be able to improve with clarity and support. It does not suit misconduct such as theft, fraud or serious insubordination, which needs a due inquiry and an opportunity to be heard. See our guide to handling employee misconduct. It is also not the right tool if the real reason for the dismissal is redundancy, where the retrenchment rules apply. Using a PIP as a pretext is risky: if the reason you give proves false, the dismissal can be wrongful.
Before starting, check three things. Is the standard reasonable and written down in the job description or targets? Has the employee been told about the problem before? Is anything else going on, such as a medical issue, pregnancy, a complaint the employee has made or discrimination, that could be the real reason in the employee’s eyes?
What should a PIP contain?
| Section | What to write |
|---|---|
| Background | Role, manager, start date, and previous feedback with dates |
| Concerns | Specific examples with dates and figures, not general descriptions such as “poor attitude” |
| Standard expected | Measurable targets: error rates, deadlines, sales or output figures, quality checks |
| Support | Training, coaching, tools, a named mentor, regular check-ins |
| Timeline | Start and end dates, and review dates in between |
| Consequences | A clear statement that failure to meet the targets may lead to further action, which may include termination with notice |
| Employee’s response | Space for the employee’s comments and signature to acknowledge receipt |
Set targets the employee can actually influence. A target that depends on a customer’s decision or on a colleague’s work is open to challenge. Keep the plan realistic for the role, and avoid changing targets mid-way without recording why.
How do you run the PIP step by step?
- Prepare the evidence. Gather performance reviews, emails, error logs, customer feedback and data. Remove anything that cannot be tied to a date.
- Hold the opening meeting. Explain the concerns, show the evidence, listen to the employee’s explanation and discuss what is getting in the way. Note any reason that the employee gives, such as health or workload, and consider it.
- Issue the written plan. Give the employee time to read it and ask for a signed acknowledgement. A refusal to sign should be noted, not forced.
- Provide the support you promised. A plan with no training or feedback looks like a formality and weakens your position.
- Hold regular reviews. Weekly or fortnightly check-ins work for most roles. After each, write a short note of what was discussed, what improved and what did not, and share it with the employee.
- Hold the final review. Compare results against the targets, with the employee present and given a chance to comment.
- Decide the outcome. Close the plan with a written outcome, whichever way it goes.
What are the possible outcomes?
- Targets met: confirm in writing that the plan is closed, and keep monitoring through normal appraisals.
- Some progress: extend the plan once for a stated period, with revised targets and the reason recorded.
- Targets not met: consider redeployment to a better-suited role, a further warning, or termination with notice or pay in lieu under the contract. Give the reason in a letter that matches the records.
- Employee resigns: accept the resignation in writing and complete the exit steps. Be careful if the resignation follows heavy pressure, since a claim that it was forced can become a constructive dismissal claim, which we cover in our article on constructive dismissal after a demotion or transfer.
Check the notice period and the termination clause in the contract, and see our guide to employment contracts for the statutory minimums. Dismissing without notice for poor performance would be wrongful under the Guidelines. Employees on probation have their own terms, which we discuss in handling probation and confirmation.
What is the exposure if the dismissal is challenged?
An employee who believes a dismissal was wrongful can seek advice from the Tripartite Alliance for Dispute Management (TADM) and file a claim for mediation. For most wrongful dismissal claims the filing window is one month from the employee’s last day of work, according to MOM’s guidance on managing employment disputes. If mediation fails, TADM issues a certificate and the claim can go to the Employment Claims Tribunals. Your PIP file will be the main evidence at both stages.
Put your file in order before you send the termination letter, because the file will be examined within weeks. The file should include the contract and job description, the PIP, the meeting notes, the evidence of the shortfalls, the support you gave, the employee’s responses and the final outcome letter.
Is the Workplace Fairness Act in force?
Not yet, as far as published sources show. Parliament has passed the Workplace Fairness legislation, and the government’s stated target is for it to take effect around the end of 2027, but you should check MOM for the current commencement date. Until then, the Tripartite Guidelines on Fair Employment Practices set the standard against discrimination in employment decisions. Even so, decide with care: if a PIP is started soon after an employee discloses a pregnancy, a disability or a complaint, expect the timing to be questioned.
Example: a sales coordinator who keeps missing deadlines
Example (hypothetical): A trading company’s sales coordinator has repeatedly sent customer quotations late and with pricing errors. His manager has mentioned this verbally but nothing is written down.
The company first records the specific incidents from the previous quarter, then meets him to discuss them. He explains that the pricing sheet is out of date. The company updates the sheet and trains him on it, then issues a ten-week PIP with targets for on-time quotations and an error rate, and fortnightly reviews. At the end, the error rate has dropped but on-time delivery has not improved. The company extends the plan by four weeks with clearer targets. When these are missed, it terminates with contractual notice and cites the documented shortfalls, with the PIP file ready if a claim follows.
Frequently asked questions
Does Singapore law require a PIP before dismissal?
No statute requires one. But if you cite poor performance, the Guidelines place the burden on you to prove it, and a PIP is the usual way to do that.
How long should a PIP last?
It depends on the role. Choose a period long enough for the employee to show change and short enough to be meaningful, and write the review dates into the plan.
Can we terminate during the PIP?
Ending the plan early can look like the outcome was predetermined, unless there is a new, serious problem. If misconduct arises, handle it through a separate inquiry.
Can the employee refuse to sign the PIP?
Yes. A signature only acknowledges receipt. Note the refusal, have a witness record that the plan was explained, and keep a copy of the plan sent by email.
Do we still pay the employee’s salary and CPF during a PIP?
Yes. A PIP does not change pay or entitlements unless the contract provides for it, so do not reduce salary or benefits as part of it.
Need help with a performance dismissal?
If your company, or you as a director or shareholder, is dealing with a performance problem or a dismissal that may be challenged, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133 or +65 9018 0072. We will help you understand the documents and deadlines. Where your matter needs a lawyer, we will refer you to a firm on our panel of Singapore law firms that regularly handles employment law. Raffles Corporate Services is a corporate services provider, not a law firm, and this article is general information, not legal advice.
The Raffles Corporate Services Editorial Team, Raffles Corporate Services