Conditional first year?

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I just saw this quote on a psych residency program website:

Is this common, or do only some programs do this?

All programs do this. The threshold for not being reappointed is fairly high, however, because not reappointing a resident forces the PD to find a replacement (or have other residents in the program pick up the services needs and call duties). As long as you don't sleep with a patient or show up to work intoxicated, reappointment is fairly likely.

-AT.
 
As long as you don't sleep with a patient or show up to work intoxicated, reappointment is fairly likely.
In addition, from what I have heard, failing Step 3 (and therefore failing to get licensed) is a fairly common reason for not having your contract renewed.