Unacademy Shuns PIPs, To Give ‘Direct Exit’ To Non-Performers

Edtech unicorn Unacademy has decided to stop putting non-performing employees on performance improvement plans (PIPs) and will instead provide a direct exit to such employees, sources told Inc42.

In a message sent on an internal communication channel, Unacademy CEO and cofounder Gaurav Munjal said, “We are putting a ban on PIP. We will not have PIP in the organisation moving forth.”

“If someone is not doing their job well then give feedback. If it happens repeatedly then it’s better to part ways,” Munjal added. 

Inc42 has seen the message sent by Munjal.

The CEO said that PIPs don’t lead to anything and just delay the decision. “Moving forth, we will have a Direct Exit with notice period for Non-Performers. We will not waste the Non-Performer’s time and the company’s time with the PIP process,” he said.

Meanwhile, a representative of Unacademy, in a statement sent to Inc42, said, “We’ve decided to do away with the PIP process that was part of the notice period in case of (a) negative outcome of the PIP. From now on, if an employee is not performing well, they can serve their notice period and leave the company. This change allows us to address performance concerns more directly and make decisions more efficiently, without unnecessary delays.”

The statement said that rather than PIPs, the non-performing employees will have the opportunity to address their performance issues directly through feedback channels. However, if performance issues persist, it is in the best interest of both the individual and the organisation to facilitate a smooth and respectful transition. 

Typically, a PIP is the last warning issued by an employer to the employees considered inefficient. It generally involves a 30 or a 60 days timeline, during which the employer sets a target for the employees to achieve. Failing to meet the target, the company parts ways with the employee. PIPs are widely used by tech companies across the world. 

The latest development has come almost a month after Unacademy appointed Sandhydeep Purri as its new chief people officer (CPO). While announcing her appointment, Unacademy said that Purri will cultivate talent and drive a culture of innovation and progress at the startup. 

Purri’s appointment also came after Unacademy saw several senior-level exits in 2023. The following were the key exits during the year:

• Arnab Dutta – Senior Vice President Strategy
• Vivek Sinha – Chief Operating Officer
• Abhyudaya Singh Rana – Chief of Staff, Chief of Compliance Officer
• Subramanian Ramachandran – Chief Financial Officer
• Siddharth Manchanda – General Counsel
• Tina Balachandran – Senior Vice President, Talent and Culture
• Sachin Aggarwal – Head Franchisee Business (Offline Centres)
• Karan Shroff – Partner & Chief Operating Officer
• Ashish Arora – Senior Vice President & National Head Academics

Meanwhile, after several rounds of layoffs and cost-cutting exercise, Munjal recently claimed that Unacademy reduced its cash burn by 60% in 2023.

Unacademy’s loss jumped by 85% to INR 1,537 Cr in FY22, while its operating revenue increased to more than 80% to INR 719 Cr.

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