The Hidden Cost Of Managerial Debt
PIPs are often collection notices for the accumulated costs of leadership problems.
A manager is reaching their breaking point. After months of simmering frustration, sighing over preventable mistakes, and re-doing work late at night, they finally Slack their HRBP and say the magic words: “I think we need to put them on a PIP.”
In the manager’s head, this is a moment of decisive action. They feel like they are finally ‘taking control’ of a performance issue. But this particular team member hasn’t a clue that they’re about to be put on a Performance Improvement Plan (PIP). Instead, this particular PIP is the last, inevitable link in a chain built from failures of leadership. It’s a collection notice on Managerial Debt.
Why We Borrow From The Future
Just as technical debt in software is the cost of choosing an easy, ‘good-enough’ solution now instead of a better approach that takes longer, Managerial Debt is the cumulative cost of all the difficult conversations you didn’t have.
We borrow (and occasionally steal) from the future every time we…
Cancel a 1-on-1 because it doesn’t feel like a priority in the midst of chaos.
Soften a piece of critical feedback, meaning that the person leaves the conversation thinking they’re doing fine.
Assume “they should just know how to do this” instead of taking the time to provide clear, written guidance.
The debt we accrue this way is pernicious because it usually rewards us with some combination of short-term harmony and/or speed. But, like most debt, it accrues interest. Eventually, the problems become too deep and persistent to ignore, and your HRBP shows up to collect.
When it comes to performance management, the most important question to ask yourself is:
Have I supported them well enough that they can make any required changes?
If you haven’t, you aren’t ready for a PIP. You’re just trying to declare bankruptcy on a relationship because it’s quicker and easier to do so.
3 Signs Your Debt Is Coming Due
Before you start drafting a PIP, look for these red flags that the performance issue might actually be a leadership debt issue…
The Shadow Workaround: You’ve started doing their work yourself or giving it to your reliable high-performer because it’s faster than explaining it again. You’ve stopped coaching and started compensating.
Vague Frustration: You tell your peers, “They just don’t get it,” but when you look at your written documentation, you can’t find a single time you defined what ‘getting it’ actually looks like in practice.
Feedback Amnesia: You look at your calendar and realize you haven’t given specific, documented feedback on the core issue in over 60 days.
The Tool: The Support Audit
At PeopleStorming, we’re big fans of moving from gut feel to practical frameworks. So, before you reach for that PIP try these tests…
The Clarity Test: Could a total stranger read my written expectations for this role and know exactly what success looks like? (Hint: “Be more proactive” is a wish; “Update the project tracker every week” is an expectation.)
The Resource Test: Does this person have the same tools, access, and bandwidth that my top performer has? Are they failing because they lack skills, or because they are working with a blunt shovel trying to dig 3 holes at once?
The Signal Test: Have I told them (explicitly and in writing) that their current performance puts their role at risk? Or have I only told them to keep an eye on their quality?
The Blocker Test: Have I asked the question: “What is one thing I am doing (or not doing) that makes your job harder?”
Turning Debt Into Equity
A PIP shouldn’t be a ‘firing document’ in disguise; it should be a partnership agreement.
If you realize you’ve been accruing managerial debt, the solution isn’t to skip accountability. It’s to be honest about the debt.
Try saying something like this: “I realize I haven’t been as clear as I could have been about the standards for this role over the last few months. That’s on me. Moving forward, I want to reset our expectations so we both know what success looks like.”
When you clear your managerial debt, one of two things happens: either the team member rises to the challenge because they finally have a good map, or they continue to struggle despite having every resource they need. If it’s the latter, the PIP is no longer a surprise; it’s a logical, fair, and respectful next step.
Don’t let your avoidance of critical conversations become someone else’s career crisis.
If you’re struggling with performance management challenges, a conversation with a coach could help you gain clarity. Get in touch if you’re interested in this kind of support, or grab a coaching introduction from our website.