In September 2013 National Bank of Kenya put a branch operations manager on a performance improvement plan, and he signed it. The bank's own witness said a follow-up evaluation was meant to happen in 2014 to see whether he had improved. His employment was terminated with effect from 30 April 2014. In court, the bank couldn't show that the follow-up evaluation ever took place, or that he was given a hearing before the decision.
The Court of Appeal upheld the finding that the termination was unfair and confirmed the order reinstating him with his salary arrears ([National Bank of Kenya v Mutonya 2019] KECA 404). The bank had a performance policy and a signed plan. What it couldn't show was that it had done what the plan said.
Once you've handed a plan over, a court will expect to see that you kept to it.
What the Employment Act says, and what it doesn't
The Employment Act doesn't mention improvement plans. It does set the standard your plan will be measured against if the employment ends.
Under section 43, if the employee challenges a termination, you have to prove the reason. Under section 45, a termination is unfair if you can't prove the reason was valid and fair and that you followed a fair procedure. Section 45(5) tells the court to consider, among other things, the employee's capability up to the date of termination and any previous warning letters. Section 41 requires you to explain the reason to the employee in a language they understand, with a colleague or shop floor union representative present if they want one, and to hear what they say before you decide.
The courts have filled in the rest. In [Jane Samba Mukala v Ol Tukai Lodge Ltd 2013] KEIC 634, a restaurant manager at a lodge in Amboseli was let go for poor performance after several years in the job. The court found the employer had no appraisal system and no criteria for judging her work. "It will not suffice to just say that one has been terminated for poor performance," the judge said. The court described a fair sequence: an appraisal, targets with a time plan for the weak areas, a follow-up review, and only then a warning and possibly termination. The Court of Appeal adopted that reasoning in the National Bank case.
A PIP is how you show the middle of that sequence happened.
Before you start one
Ask two questions first. Did the person know what was expected before anyone judged them? And did the business give them what they needed to deliver it? Our guide to terminating for poor performance covers both.
A plan can't repair a standard that was never set. In [Cheruiyot v The Co-operative Bank of Kenya Ltd 2024] KEELRC 451, the bank said it had put a personal banker on a six-month improvement plan. The court found the appraisal had been handled poorly from the start: targets weren't issued on time, some reached him close to the end of the period they covered, and he wasn't warned what the exercise could lead to. The termination was found unfair and he was awarded ten months' pay as compensation, plus notice pay.
If the targets only ever existed in conversation, write them down and give the person a fair run at them before you start a formal plan. Our guide to role scorecards shows a simple way to do that.
What the plan should contain
One or two pages is enough. It should cover:
- The standard the role is expected to meet, in numbers or things you can observe.
- Where performance has fallen short, with dates and examples.
- The targets for the plan period, and how each one will be measured.
- The support you'll give: training, coaching, tools, a change in workload, access to information.
- The dates of the check-ins and who will attend.
- The end date, and what happens if the targets are met or missed.
- Space for the employee's comments, and both signatures.
The line about consequences matters. The employee should know in writing that if things don't improve, the business may consider ending the employment, after a hearing. A plan that reads like a friendly coaching note leaves room for the employee to say later that nobody told them their job was at risk.
Here's how that can look. (This is an illustrative example, not a client.)
Wanjiku is a credit controller at a hardware distributor in Eldoret. Her standard is to keep debts over 60 days below KSh 1.5 million and to send the aged debtors report by the 5th of each month. For the last three months, debts over 60 days have sat between KSh 2.6 million and KSh 3.1 million, and two reports arrived after the 10th. Over the next three months she needs to bring overdue debts under KSh 2 million by the end of month two and under KSh 1.5 million by the end of month three, and send every report by the 5th. The business will give her read-only access to the sales system, so she no longer waits on the sales team for customer statements, and the finance manager will join her on calls to the ten largest overdue accounts in the first month. They'll meet every second Friday, and the finance manager will note each meeting. If the targets aren't met, the business may start the process for termination on grounds of poor performance, which includes a hearing where she can respond.
Notice that part of the support fixes something the business was causing. That's often where a plan earns its keep.
How long it should run
There's no fixed period in the Act. The question a court asks is whether the person had a reasonable chance to improve, and that depends on how often the work produces a result you can measure. If the main output is a monthly report or monthly collections, a plan of two or three weeks tells you very little. Where output is counted daily, a shorter plan may be fair.
Whatever length you choose, keep to it. National Bank ended the employment before the planned review. If you need more time to judge fairly, extend it in writing with the employee's agreement. Safaricom did this in [Mwaura v Safaricom Limited 2025] KEELRC 2431, where a three-month plan was extended to December and the employee agreed by email.
Support and check-ins
In our work with founder-led businesses, this is where plans most often come apart. The plan is signed, the manager gets busy, check-ins slip, and at the end there's a verdict but no record of how anyone reached it.
Each check-in should leave a short dated note: what the numbers show, what support was given since the last meeting, what the employee said, and what happens before the next one. A few lines will do. If you promised training, record when it happened. If the employee raised an obstacle, such as a supplier delay, a broken laptop or a colleague who doesn't pass on information, write it down along with what you did about it. Courts look at whether the support was real, and these notes are how you show it.
What happens at the end
Meet on the end date and put the outcome in writing.
If the targets were met, close the plan in a short letter and say so. Then go back to normal check-ins.
If there's real progress but not enough, you can extend the plan with fresh targets and the employee's agreement.
If performance hasn't improved, the plan doesn't end the employment by itself. You still have to follow section 41: write to the employee with the reason you're considering termination, tell them they can bring a colleague or union representative, hear them out, and then decide. In the National Bank case the Employment and Labour Relations Court said that even after a PIP review, the employee must be told of the intended termination and given a hearing, and the Court of Appeal didn't disturb that finding. Our guide to the section 41 hearing sets out how to run one. If your policy says you'll consider another role before termination, do that too.
The plan depends on what came before it
A PIP needs a standard the employee knew about, a record of the gap and managers who hold check-ins when they said they would. None of that can be created in the week you decide someone needs a plan.
Most founders already know what a decent plan looks like. The hard part is having every manager set expectations, hold check-ins and keep short notes every month, without the founder chasing them. Where that happens, a PIP is a short step from normal management. Where it doesn't, the plan is where the gaps show. Our guide to what managers should own each week covers those habits.
If you're facing a live dispute or termination decision, take advice from an employment lawyer on that case. Our work is with what comes before: building a way of managing performance where expectations, check-ins and records are part of your managers' normal work. The Performance Picture is a ten-working-day assessment of how performance is actually managed across your business. We hear from leadership and staff, look at the records, and show you where things break down and what to fix first. It doesn't assess one employee, and it isn't legal advice. You can also start with the free three-minute Quick Picture.
This article gives general information on Kenyan employment law and performance management. It isn't legal advice for a specific case.