If an employee is underperforming, a manager or business owner might implement a performance improvement plan (PIP). This structured approach can help employees course-correct, with support and oversight from their managers, to become thriving assets of the team once again.
Here’s everything you need to know about performance improvement plans, including key components of the document, best practices for implementation, and templates to get you started.
What is a performance improvement plan?
A performance improvement plan is a formal document that outlines the steps an employee needs to take to meet agreed-upon standards and goals. PIPs are typically created in collaboration with the employee, their manager, and HR.
PIPs usually outline a list of performance goals employees must meet in a specified time frame — 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.
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.
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: A Guide to Employee Record Retention]
What to include in a PIP
A comprehensive PIP should include the following components:
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 time frame. 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.
How to establish an employee PIP
If you have a struggling employee, follow these steps to establish and implement a PIP successfully.
Determine when a plan is appropriate
First, consider whether a specific performance or behavioral issue can be substantiated, as well as whether it can be addressed successfully through a formal plan. Additionally, consider whether there has been adequate employee training and support for the individual to succeed in their role.
A PIP should not be used as a means to terminate the individual without giving them the chance to succeed. A “punitive” PIP won’t serve its intended purpose and can send the message that help does not exist for struggling employees.
“I’d consider a formal PIP for a struggling employee if I see consistent issues … even after informal feedback … [and] I’d check if their work is hurting our small team or reputation,” said Joanneke Schuurman, COO and Marketing Manager at Custom-Lanyards.net. “In this way, I hope to be able to make timely adjustments. It’s about giving them a fair shot to set up before bigger decisions.”
If the employee cannot meet the expectations set forth, or at least some type of measurable improvement, it may be time for termination.
Draft a plan and review it with HR
If you determine a formal plan is warranted, the next step is to draft a PIP that includes company expectations, areas for improvement, and an action plan with measurable goals. Once you’ve created your draft, an HR professional will typically review it and ensure it is free of any bias against the employee. 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, 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. You may make changes to the PIP after receiving employee feedback; HR should review and finalize any changes. Once the PIP is finalized, both parties can sign the plan and forward it to HR for approval and implementation.
Evaluate the plan’s progression
Meet regularly with the employee 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 more: Employee Handbook Templates for Your Small Business]
Common mistakes to avoid when implementing a PIP
Despite good intentions, managers may unwittingly set their employees up for failure when implementing a PIP. Here are some common mistakes to avoid and what to do instead.
Setting vague or unattainable goals
One common mistake Schuurman has seen is rushing into PIP implementation without setting clear goals. Without specific objectives and steps to get there, employees will likely struggle to improve, and employers will lack the data they need to measure that improvement.
To avoid this issue, Schuurman recommends setting specific, time-bound targets (e.g. “create a mockup in three days”) with structured steps, feedback, and assistance to achieve them.
Failing to incorporate employee feedback
If the employee isn’t allowed to provide input on their own PIP, they’re less likely to be invested in a successful outcome. That’s why it’s crucial to seek feedback from the employee, who may have a different perspective on their strengths and challenges. This not only increases engagement and buy-in; it also offers insight into the employee’s experience and goals, allowing you to tailor your approach accordingly.
Not documenting progress
Without detailed documentation of an employee’s progress on their PIP, you both may struggle to determine which aspects of the plan contributed to its success (or lack thereof). Consider using multiple sources of data, both qualitative and quantitative, to measure progress over time. Depending on the nature of the issue and subsequent goals, these may include specific deliverables, reports, self-surveys, and team or customer feedback.
How to support employees through a PIP for better outcomes
Though the onus of improvement falls on the employee, the manager plays a key role in facilitating the process. Here are a few ways to support your employee and increase the likelihood of a positive outcome.
Provide the necessary resources
Consider what resources the employee might need to achieve the objectives outlined in their PIP. Would additional training sessions, professional development courses, or a mentorship program allow them to meet expectations? If an employee is struggling due to personal circumstances, could flexible work arrangements or mental health support allow them to manage their workload more easily?
In some cases, your employee may have an idea of what would be most beneficial; in other cases, you may need to take a proactive approach by researching and providing relevant resources.
Have frequent 1:1 check-ins
According to Schuurman, having regular 1:1 conversations in an informal setting can help managers and employees align on PIP goals and progress.
“We often repeat the goals and see where we need to adjust,” said Schuurman. “This helps to prevent future problems.”
During these 1:1s, make space for both the business and human side of the situation. Employees who are put under a PIP may be experiencing a range of feelings, including stress, anxiety, and vulnerability, which may be compounded by personal circumstances. Create an open environment, actively listen, and offer empathy and support.
Celebrate the small wins
Finally, Schuurman encourages leaders to remember that small wins matter. Even if the employee hasn’t yet achieved the “optimal” end goal, incremental improvements show they’re headed in the right direction.
“Acknowledge improvements, no matter how minor, to maintain motivation,” she said. “Recognize their effort, [thereby] reinforcing positive behavior.”
[Read more: Budget-Friendly Employee Retention Tips]
Templates and examples of PIPs
- The Management Center: The Management Center offers a complete tool kit if you are an employer or manager unsure how to begin creating a PIP. The tool kit includes a preparation worksheet for managers to complete before starting the formal PIP and a template for managers to create the actual PIP.
- Monday.com: If specificity and customization are vital to your company when creating a PIP, monday.com 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.
- Upwork: Upwork has created PIP templates for a range of circumstances, from low work output to unprofessional behavior, with examples of metrics and specific action items. It also offers a template for high-performing employees with leadership potential, providing a structure for further professional development.
Kaytlyn Smith contributed to this article.
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