Two people sit at a round white table in an otherwise empty open office space. Facing the camera is a young woman in a polka-dotted button-up shirt and blazer. She holds a stack of paper in front of her and speaks to the person sitting across from her. This other person has short dark hair and is facing away from the camera.
PIPs are tailored to each employee to provide an outline of where and how they can improve their work performance. — Getty Images/JohnnyGreig

Performance improvement plans can help course-correct an underperforming or deficient employee to help them become a thriving asset of an employer’s team. As a manager or business owner, learn the benefits of using a performance improvement plan and discover valuable examples of what to include to get struggling employees back on track.

What is a performance improvement plan (PIP)?

A performance improvement plan (PIP) is a formal document that details changes an employee must make to keep their job. PIPs usually outline a list of performance goals employees must meet in a specified timeframe — generally within 30, 60, or 90 days. For example, an employee who has a problem meeting deadlines, therefore causing delays in other departments, may receive a PIP that outlines a helpful, step-by-step process to meet those set deadlines.

From an employee’s perspective, following a PIP may be the last step before termination; however, managers also use PIPs as a tool with human resources (HR) and the employee as a clear path to rectifying performance.

Benefits of using PIPs

There are many benefits to using PIPs, including preventing high turnover rates by giving employees another chance to succeed; promoting positive communication between the employer, employee, and HR; and setting clear expectations for the employee. By using a PIP, employers record the employee’s performance in writing, along with the steps to improve said performance. This helps the employer avoid liability issues if they choose to terminate an employee.

PIPs can also be beneficial when surveying employees. With a written job performance record, employers can quickly look back to determine if they should consider an employee for promotion or advancement opportunities.

[Read more: How to Survey Your Employees]

If the employee cannot meet the expectations set forth, or at least some type of measurable improvement, it may be time for termination.

What to include in a PIP

Company expectations

It’s essential to understand what goes into a PIP before drafting one. First and foremost, the key to a good PIP is clarity. A PIP should begin by clearly stating the company’s expectations overall and within the employee’s specific job role. Remember: The point of a PIP is to create a clear path to success.

Areas for improvement

Next, the employer should identify areas where improvement is needed (based on facts, not opinion) by using examples of what the employee is not doing to meet expectations. The employer can constructively frame this and express their belief in the employee to do a better job.

Action plan

A good PIP should also include an action plan with a set timeframe. This action plan can be detailed with specific goals, progress milestones, and additional training. Following the action plan, the PIP should include scheduled follow-ups between the employer, HR, and employee, as well as progress points and the consequences of not meeting those points.

Next steps if not followed

Finally, the PIP should include a section to explain what will happen if the PIP is deemed ineffective. If the employee cannot meet the expectations set forth, or at least some type of measurable improvement, it may be time for termination. At this point, it is best to consult with HR for company-specific next steps.

[Read more: 5 Smart Ways to Manage Employee Promotions]

Templates and examples of PIPs

  • The Management Center: The Management Center offers a complete toolkit if you are an employer or manager unsure how to begin creating a PIP. The toolkit includes a preparation worksheet for managers to complete before starting the formal PIP and a template for managers to create the actual PIP.
  • If specificity and customization are vital to your company when creating a PIP, offers examples of poor employee performance PIPs and issuing a PIP after a customer complaint. In addition, the platform allows employers to customize the template to create an efficient workflow and gives everyone involved (employer, HR, and employee) direct access to the PIP as it lives on the cloud.
  • Betterworks: Betterworks offers additional elements in their example of creating a PIP, like the use of metrics. Key results you can measure — for example, customer satisfaction — can help employees gauge the improvement they need to succeed. Betterworks also offers a PIP check-in form for those in management positions to evaluate the employee’s progress since issuing the PIP.

[Read more: How to Create Growth Opportunities for Employees]

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