Amazon PIP (What Does It Mean + Other FAQs)

Amazon has implemented a new performance improvement program (PIP) that has received mixed reviews from its staff. Under the Amazon PIP plan, employees’ are given a short time to correct performance issues before termination.

Read on to find out how Amazon’s Performance Improvement Plan (PIP) works and what it means for its employees!

What Is Amazon PIP In 2022?

PIP is a performance improvement plan at Amazon. Workers can avoid PIP’s by reviewing items on their development list and making corrections. Performance is split into three categories, and employees who need improvement are given 1-2 months to improve before termination.  Following termination, employees that have worked for Amazon for over one month can receive severance pay in 2022.

To find out more information about the Amazon Performance Improvement Plan (PIP), including how to avoid being placed on one, keep reading for more useful facts!

Why Does Amazon Use Performance Improvement Plans for Its Employees?

Amazon management uses performance improvement plans (PIP) on its employees for multiple reasons, including:

  • To address areas of performance that employees are inefficient in
  • Correct harmful workplace behavior issues of employees
  • Identify ways to increase employee productivity
  • Identify new and rising talent within the company

Overall, the goal of the PIP plan is to improve Amazon’s workforce and enable business operations to move with more efficiency.

How Does the Amazon Performance Improvement (PIP) Plan Work?

Amazon’s performance improvement plan (Plan) is intended to work as an initiative for employees to correct performance issues, rather than be terminated from the company.

Under Amazon’s Performance Improvement Plan (PIP), performance reviews are split into three categories:

  • “Meets Expectations” (employees who consistently meet expectations)
  • “Occasionally Misses Expectations” (employees who are not meeting expectations, but Amazon feels they can be coached to improve)
  • “Needs Improvement” (employees whom Amazon feels will not meet expectations and should be terminated).

Some items that Amazon uses to rate its employees include on-the-job performance, knowledge of company policies, helpfulness to co-workers, and attendance.

If an employee falls into one of the first two categories, they are given a certain amount of time to improve their performance.

However, if they don’t manage to do so within this time period, they will be placed in the third category. This signals the end of their employment with Amazon.

How Long Does an Amazon Employee Have to Correct Performance with a PIP?

How Long Does an Amazon Employee Have to Correct Performance with a PIP?

Generally, Amazon allows workers in a PIP for up to two months to correct the areas their performance is lacking in.

If the employee cannot make corrections to their performance within the designated period, they are terminated by the company.

Why Is the Amazon Performance Improvement (PIP) Plan Controversial?

Amazon’s Performance Improvement Plan is controversial because it can result in firing or coaching.

This plan has received mixed reviews from Amazon’s staff. Many employees are worried about their job security, while others are more optimistic.

Many people working at Amazon expressed they feel the new policy is unfair because not all employees are receiving coaching or training.

Some employees were told they needed to improve their performance after only six months on the job, while others who have been there for over five years were also told to get better or leave.

How Common Are Performance Improvement Plans (PIP’s) for Amazon Employees?

For every 100 employees at Amazon, 10 receive a PIP. Compared to similar companies, this rate is considered high. 

Other employers in the retail industry with comparable workers have PIP rates of 0.5 to 3 percent.

If an Employee Is Terminated Due to PIP, Can They Receive Severance Pay?

When Amazon has employed an employee for at least one month, they are eligible to receive severance pay.

Final employee payment is based on the duration of working with the company in yearly increments.

How Are Amazon Employees Notified of a Performance Improvement Plan (PIP)?

Before an Amazon employee is placed on a PIP, they will receive written notification from their supervisor, indicating the areas they need to improve and a date for completion.

How Can an Amazon Employee Avoid the Amazon Performance Improvement Plan?

For Amazon employees, the key to avoiding the Performance Improvement Plan is to be aware of areas they struggle in and ask for feedback or coaching.

Before an employee receives a PIP, managers will give them a Dev/ development list.

Items addressed on the Dev list require immediate improvement from the employee.

Therefore, it might be time for you to ask questions about what you’re doing wrong and how you can do better moving forward.

When employees can correct items on their Dev list, they can avoid a PIP.

To know more, you can also read our posts on the Amazon employee assistance program, Amazon rehire policy, and Amazon training program.

Conclusion

Amazon’s performance improvement plan (PIP) has received mixed reviews from employees. Some consider the plan fair insofar as it provides coaching to employees who need improvement. 

However, others feel termination for those who cannot improve after a brief period is harsh. As with any kind of performance management process, it’s essential to take the time to understand the ins and outs of the plan.

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Marques Thomas

Marques Thomas graduated with a MBA in 2011. Since then, Marques has worked in the retail and consumer service industry as a manager, advisor, and marketer. Marques is also the head writer and founder of QuerySprout.com.

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