In recent years, India’s service sector, particularly the Big 4 and other major IT and professional services companies, has come under scrutiny for its use of Performance Improvement Plans (PIPs) as a tool to quietly reduce headcount while maintaining a façade of employee welfare. Far from being a constructive mechanism to help employees improve, PIPs have increasingly been weaponized to push employees out without the optics of a formal layoff. This practice not only undermines employee morale but also raises serious ethical questions about corporate transparency and accountability.
The PIP Facade: A Tool for Covert Layoffs
A Performance Improvement Plan is ostensibly designed to help underperforming employees address deficiencies, improve skills, and align with organizational expectations. In theory, it’s a structured process with clear objectives, timelines, and support from management. However, in practice, many Indian service sector companies have turned PIPs into a coercive mechanism to force resignations.
Employees report being placed on PIPs without prior indication of poor performance. Often, these individuals have received satisfactory or even stellar performance reviews before being unexpectedly flagged for “underperformance.” The tasks assigned under a PIP are frequently vague, overly ambitious, or outright impossible to achieve within the stipulated timeline. For instance, an employee might be asked to complete a complex project single-handedly under unrealistic deadlines or meet arbitrary metrics that even high-performing peers would struggle to achieve.
The Pressure Cooker: Coercion and Intimidation
Once an employee is placed on a PIP, the process becomes a psychological gauntlet. Managers, directors, and even HR representatives often exert relentless pressure to make the employee feel isolated and incompetent. Regular check-ins turn into sessions of criticism rather than support, with little to no constructive feedback. Employees describe being micromanaged, scrutinized excessively, or given conflicting instructions, all designed to ensure failure.
HR, which should ideally serve as a neutral mediator, frequently aligns with management, dismissing employee grievances or gaslighting them into believing they are at fault. Complaints about unfair treatment or impossible PIP objectives are met with boilerplate responses like, “This is for your growth,” or “You need to take accountability.” In some cases, employees are explicitly encouraged to resign, with subtle or overt threats about the consequences of failing the PIP—namely, termination.
The psychological toll is immense. Employees report anxiety, sleeplessness, and a loss of confidence as they navigate a process rigged against them. The message is clear: quit voluntarily, or face the stigma of being fired for “poor performance.”
The Hypocrisy: “We Never Lay Off”
Perhaps the most galling aspect of this practice is the public stance of these companies. Many, including the Big 4, proudly claim that they “never lay off employees” or have a “people-first culture.” By forcing resignations through PIPs, they maintain this narrative while sidestepping the legal, financial, and reputational repercussions of mass layoffs. Employees who resign under duress are not counted as layoffs, allowing firms to project stability and employee-centric values to clients, investors, and the public.
This hypocrisy is particularly stark in India, where the service sector employs millions and is seen as a cornerstone of economic growth. Companies leverage the country’s vast talent pool to maintain high headcounts during boom periods, only to quietly shed employees during downturns or when cost-cutting is prioritized. The use of PIPs as a layoff tool ensures that these workforce reductions fly under the radar, avoiding media scrutiny or backlash from labor unions.
The Employee’s Dilemma: No Recourse, No Justice
For employees, the PIP process leaves little room for recourse. Those who attempt to challenge the process internally find HR and leadership closing ranks. External options, such as legal action, are daunting due to the time, cost, and difficulty of proving coercion in a resignation. Moreover, the stigma of being labeled a “poor performer” or having a termination on record can severely hamper future job prospects in India’s competitive job market.
Employees are thus trapped in a lose-lose situation: endure a demoralizing PIP process with slim chances of success, or resign and preserve some semblance of professional dignity. Either way, the outcome aligns with the company’s goal of reducing headcount without admitting to layoffs.
A Call for Accountability
The weaponization of PIPs in India’s service sector is a systemic issue that demands greater scrutiny. Employees, labor advocates, and policymakers must push for reforms to ensure that PIPs are used transparently and ethically. Potential measures include:
- Mandatory Documentation: Companies should be required to provide clear, evidence-based justification for placing an employee on a PIP, including prior performance reviews and specific incidents of underperformance.
- Independent Oversight: HR departments or third-party mediators should oversee PIP processes to prevent bias and ensure fairness.
- Legal Protections: Labor laws should be strengthened to recognize coerced resignations as constructive dismissals, giving employees grounds to seek redress.
- Public Reporting: Companies should be mandated to disclose workforce reduction practices, including the number of employees placed on PIPs and their outcomes.
Conclusion
The misuse of Performance Improvement Plans by Indian service sector companies, including the Big 4, reveals a troubling trend of prioritizing corporate optics over employee well-being. By cloaking layoffs in the guise of performance management, these firms erode trust, exploit workers, and perpetuate a culture of fear. It’s time for employees to share their stories, for regulators to demand transparency, and for the industry to confront its hypocrisy. Only then can the service sector live up to its proclaimed values of integrity and people-first leadership.
