Person in a meeting with a manager inside a bright conference room with floor-to-ceiling windows.
An employee performance plan (PIP) should serve as means for helping an employee succeed rather than punishment for poor performance. — Getty Images/monkeybusinessimages

If an employee is struggling to meet the expectations of their job or organization, a manager may consider creating an employee performance improvement plan (PIP) to help that individual succeed. Here’s what you need to know about creating and implementing a PIP in the workplace.

What is an employee performance improvement plan?

An employee performance improvement plan or performance action plan outlines the steps an employee needs to take to meet agreed-upon standards and goals. A PIP is typically a formal action guide created in collaboration with the employee, their manager, and HR.

Ideally, the plan will ameliorate the performance or behavior deficit. If not, the manager or HR leader may take additional employment actions, such as demotion or termination.

How to establish an employee performance improvement plan

Determine when a plan is appropriate

A PIP is warranted when an employee is underperforming and their manager is committed to helping them improve in a timely fashion. It should not be used as the first step or basis for termination — a “punitive” PIP won’t serve its intended purpose of helping the employee, and can send the negative message that help does not exist for struggling employees.

To determine whether a PIP is appropriate, managers should consider whether a specific performance or behavioral issue can be substantiated, as well as whether that issue can be addressed successfully through a formal plan. They should also determine whether the employee has received adequate training and support to succeed in their role. Finally, if a known personal issue could be impacting the employee’s performance and accommodations have already been given, a PIP could help guide the individual back on track.

[Read: How to Offer an Employee Assistance Program for Small Businesses]

Draft a plan

If a manager determines a formal plan is warranted, the next step is to draft a PIP that includes the following:

  • A specific time frame during which the PIP will be implemented.
  • Area(s) of concern, or where the employee’s performance is not meeting standards.
  • Goal(s) or expected outcome(s), or what the employee will achieve as part of the PIP.
  • Actions, or the specific steps the employee must take to meet the above goal(s).
  • Key metrics, or how the manager and HR will measure whether each goal was met.
  • Scheduled checkpoints, or a concrete timeline for all outlined actions.

The more clear and specific the PIP is in setting measurable goals and employee expectations, the more likely it is to succeed.

[Read: How to Create an Employee Training Program]

The manager and employee should meet regularly to determine how the PIP is progressing, including any progress made (or not made) toward goals in a given period.

Review the plan with HR

Once the manager has created a draft plan, an HR professional will typically review it and ensure it is free of any bias against the employee — in other words, that the PIP is not just a means or excuse to terminate the individual without giving them the chance to succeed. If the plan involves any provisions from HR, such as additional training or onboarding processes, the HR professional can help start the process as soon as possible.

Implement the plan

After the PIP has been approved, the manager should meet with the employee to discuss and implement it. During this time, the employee should have the opportunity to ask questions and provide feedback, allowing them to take ownership of the plan and fully understand any expectations set. The manager may make changes to the PIP after receiving employee feedback; HR should review and finalize any changes. Once the PIP is finalized, the manager and employee can sign the plan and forward it to HR for approval and implementation.

Evaluate the plan’s progression

The manager and employee should meet regularly to determine how the PIP is progressing, including any progress made (or not made) toward goals in a given period. Employees can lead these meetings by self-reporting how they are doing, any realizations they have made, or any additional tools or resources they need to succeed.

Close the plan

If the employee’s performance does not improve by the determined end date, an employer should close the PIP to determine the next steps, which may include reassignment, demotion, or termination.

Ideally, the employee will successfully meet all objectives of the PIP. In this case, the employer can formally close the plan, acknowledge the employee’s success, and allow for continued employment — with the understanding that ongoing good performance is expected.

[Read: How to Know When It’s Time to Promote an Employee]

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