How Indian IT Turned Performance Reviews into an Exit Tool

Indian and global IT workers are sounding alarms about the widespread misuse of Performance Improvement Plans (PIPs) to pressure employees to resign, often without a clear link to actual performance.

Workers’ accounts and HR leaders’ admissions reveal PIPs, meant for correction and development, are also used as opaque exit tools driven by metrics, staffing issues, and manager choices.

The anxiety has deepened after recent layoffs at TCS. It has encouraged employees across the industry to speak more openly about concerns they’ve had for years. 

In a statement to AIM, TCS had said it is on a journey to become a future-ready organisation by implementing various strategic initiatives, including realigning its workforce model, and did not state that it was related to PIP. 

Can of Worms?

A Pune-based developer, with over 10 years of experience and currently working at IBM, said the system is biased against workers from the moment they are placed on the bench or take permitted leave. 

If you bench even without projects or take company-allocated leave, your utilisation will fall below 96.6% and result in a PIP. “There is no relation to your work or expertise,” he alleged. 

The developer further said that the absence of a dedicated HR representative leaves workers at the mercy of managers whose decisions are effectively final.

On similar lines, a senior developer from Chennai, who previously worked at HCLTech, shared a similar experience, mentioning that he was placed on a PIP immediately after returning from a medical emergency. 

Both developers preferred to remain anonymous, fearing repercussions for speaking out. 

Meanwhile, IBM declined to comment, and HCLTech did not respond to queries from AIM about PIP policies. 

Other IT companies remained unresponsive to our queries.

These individual accounts echo patterns that HR leaders say they have long observed. 

Kaushik Kumar, founder of Kommunique Learning and a senior talent professional, said that PIP misuse is rarely an isolated HR failure but part of deeper structural and cultural problems within IT organisations. 

He said misplaced incentives often push managers to adopt a survival mindset and prioritise control over development. 

“In many IT companies, PIPs are now seen as an exit strategy rather than an improvement strategy,” Kumar said. “HR plays a procedural role and often lacks authority to challenge a manager’s decision, especially in offshore projects.” 

An Aristo Legal commentary stresses that fairness requires clear expectations, documented performance gaps and a genuine chance to improve. 

The Bengaluru-based legal firm said that Indian labour law lacks specific rules for performance-based termination, but Supreme Court precedents require that employees be informed of deficiencies, treated consistently and given a fair, well-documented opportunity to improve.

Kumar said a PIP cannot be initiated without an established record of feedback, adding that “surprise PIPs” are both procedurally invalid and can be challenged. 

Meanwhile, Harpreet Singh Saluja, advocate at the Bombay High Court and president of the Nascent Information Technology Employees Senate, a body advocating for IT/ITES workers facing unfair practices like forced resignations, said the organisation has been receiving complaints about forced resignations disguised as “performance issues” in Indian IT. 

He noted that under the Industrial Disputes Act, 1947, employees with at least one year of service are legally protected, and resignations given under pressure or coercion are invalid. 

Saluja advised workers to refuse forced resignations, demand a written justification, preserve evidence, and seek intervention from the labour department if pressure persists. 

He said HR teams often avoid formal documentation because coerced exits cannot withstand legal scrutiny.

While several HR leaders and legal experts warn against misuse, others argue that most IT companies follow robust processes. 

TeamLease Digital CEO Neeti Sharma said most firms in India maintain transparent frameworks for KPIs, reviews and PIPs. “These processes include multiple rounds of feedback, and only then are employees put on PIPs,” she said. 

With bench times shortening and niche skills in demand, Sharma said companies have strong incentives to ensure fairness rather than to pursue premature exits. 

According to Unearthinsight, bench periods have now been reduced to 35–45 days, down from the 45–60 days seen in FY20 and FY21.

The shift, the firm said, is aimed at improving cost efficiency and resource utilisation.

Sharma said firms monitor patterns such as team-level attrition, bench cycles and exit feedback to identify unusual spikes. 

“Sudden increases in PIPs are red flags for HR, prompting closer scrutiny of managers,” she said. 

When employees raise concerns about unfair PIPs, Sharma said TeamLease’s clients (IT companies) engage managers to understand the rationale and then facilitate discussions involving both sides. 

If the issue stems from skill mismatch, she said, redeployment to another project is considered to ensure the employee succeeds in a more suitable role.

Nandini Kantharaj, an experienced HR professional, said the broader issue is the mindset behind PIPs. “This mindset not only undermines the purpose of a PIP but creates fear and resistance among employees,” she said. 

Kantharaj stressed the need for managers to identify gaps correctly, document expectations and coach employees consistently before escalating to formal plans.

Her concern mirrors many workers’ beliefs that PIPs are often just a procedural defense for pre-decided terminations.

She noted that unless organisations redesign performance systems to prioritise psychological safety, accountability and fairness over utilisation and optics, the misuse will persist.

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