After a negative performance review, management might provide an employee with one more chance to improve his performance through a performance improvement plan (PIP, also known as a performance action plan).
If an employee has repeated performance concerns, you may wish to collaborate on a performance improvement plan (PIP). Employers frequently utilize this method, to help underperforming employees understand the steps they must take to succeed in their roles and maintain good standing with the organization.
A performance improvement plan gives the employee specific goals to fulfill in order to avoid dismissal, demotion, or transfer.
A performance improvement plan (PIP) template provides you with a tool for creating an individualized, action-oriented, step-by-step plan to improve the performance of employees who are either failing to fulfill their manager's or supervisor's expectations or could benefit from a more structured approach.
In this article we will delve into how to create performance improvement plan will also see some examples & templates.
What is a performance improvement plan(PIP)?
A PIP full form is Performance Improvement Plan. A performance improvement plan is a document that outlines where an employee falls short and how he might improve.
For example, the performance action plan may outline skills or training that the individual requires. Alternatively, it could specify how the employee's conduct should change. In any situation, the PIP will clearly outline the steps the employee must take to make the necessary adjustments.
The employee's manager creates an employee performance improvement plan, which is then submitted to HR. It also specifies the consequences if the employee's performance continues to be unsatisfactory.It has a deadline for completing the specified objectives, which is commonly 30, 60, or 90 days.
These plans help employees address failures and achieve results such as overall improved performance, skill gaps, or behavioral issues, but they may result in termination or other consequences if the employee does not meet the PIP's goals within the timeframe specified. PIPs are primarily used for underperforming employees, but they can also provide actionable guidelines for individuals pursuing advancement.
The Importance and Benefits of a Performance Improvement Plan
Why do employers use performance improvement plans (PIPs) instead of simply terminating underperforming employees? PIPs offer several key benefits:
Improves Company Culture:
PIPs foster accountability, ensuring employees meet expectations or face consequences.
They contribute to a positive work environment, where hard-working employees feel valued.
Struggling employees receive support through actionable objectives, clarifying expectations.
PIPs are not just for problematic employees; they also assist those aiming for promotions or lateral moves, helping them achieve their career goals.
Helps employees overcome their weaknesses and promotes a positive, supportive, and employee-valued working culture.
More Effective Than Reviews:
Reviews often lack consequences and may be perceived as inaccurate.
PIPs provide clear, actionable feedback, helping employees understand their shortcomings and how to improve.
When properly framed, PIPs can motivate employees to strive for better performance.
Cost and Time Efficiency:
Reducing staff turnover saves time and money.
Improving current employees' performance avoids the costs of firing and rehiring.
Rather than dismissing underperforming people based on other beneficial attributes, PIPs assist employees in addressing skill gaps while saving time and resources spent on acquiring and onboarding new employees.
It minimizes the need for extensive new hire training, as PIPs typically require less training for the existing employee.
Things to Consider Before Implementing a Performance Improvement Plan
Before initiating a conversation about a Performance Improvement Plan (PIP), it is crucial to remember that the primary objective is to assist team members in enhancing their performance. Approach this discussion with the intent to provide constructive feedback and establish clear, actionable steps for improvement. The following tips can help facilitate an open-minded discussion and enable your team members to effectively absorb the information.
Prepare Your Team Members: Although it may be tempting to initiate a PIP talk without prior notice, prepping your team member can help keep the discussion focused on constructive improvements. Ensure that you foster strong communication in the workplace so that team members feel comfortable expressing themselves.
Define a Clear Path to Success: Offering feedback on what a team member is doing wrong is insufficient without providing guidance on how to improve. This is where the PIP action plan is invaluable, outlining specific steps for better performance.
Listen Actively: During the meeting, prioritize listening and understanding. Instead of assigning blame, encourage the team member to explain their situation and any factors contributing to their performance issues. Individual discussions can uncover underlying problems that may influence the performance improvement plan you develop together.
Identify the Root Cause of the Problem: Understanding the root cause of performance issues is essential. One-on-one meetings are effective for exploring these underlying causes, whether they stem from situational or personal factors. Identifying the core reason enables you to create a more effective action plan.
Communicate Progress Review Plans: Inform your team member that you will monitor their progress and offer motivation throughout the process. This assurance lets them know they are not alone in their efforts and helps keep them accountable and aligned with their goals.
When to Avoid a Performance Improvement Plan
A PIP should not be a mere formality. Implementing a PIP requires significant effort and should only be used when there is confidence in the employee's potential for improvement. If other employees perceive PIPs as termination tools, they will fear the process and lose respect for genuine performance enhancement efforts.
PIPs cannot resolve personal conflicts between employees and managers. Respect and the ability to work together are essential. If there is a personality clash, consider moving the employee to a different team or role where they may fit better. In cases where an employee's skills do not align with the organization's new direction, a PIP will not be effective.
A PIP is not suitable for addressing long-standing performance issues. Early intervention is key; if an employee's performance has deteriorated over years without action, a PIP is unlikely to yield results.
PIPs are not meant for serious infractions such as theft, violence, or gross insubordination.
Disadvantages of a Performance Improvement Plan
Time and Effort: Each PIP must be tailored to the individual, requiring considerable effort. Misuse can lead to wasted resources.
Workflow Disruption: While potentially distracting, the long-term benefits of resolving performance issues can outweigh short-term disruptions.
Uncomfortable Conversations: Effective implementation requires clear communication and support from HR, ensuring managers are equipped to guide the process positively.
Negative Perceptions: Employees may view PIPs as a prelude to termination, leading to resistance and potential toxicity. Framing PIPs within a culture of self-improvement is crucial for their acceptance.
What’s Included in a Performance Improvement Plan?
When creating a performance improvement plan (PIP), it’s essential to know what to include. Use the following checklist as you draft your template:
What’s Included in a Performance Improvement Plan?
Company Expectations: A standardized statement outlining the company’s performance expectations.
Performance Overview: A comparison of the team member’s current performance against the role’s expectations.
Action Plan: Action items with measurable steps, ideally framed as SMART goals.
Follow-up Schedule: A timeline with progress milestones, emphasizing the "time-bound" aspect of SMART goals.
Consequences: Details of potential outcomes if the PIP does not lead to improvement, such as further escalation or possible termination.
How to Create a Performance Improvement Plan?
Now that you understand what your PIP needs to include, follow these steps to create a performance improvement plan for a specific employee and issue.
How to Create a Performance Improvement Plan?
Determine Acceptable Performance Define acceptable performance and compare it to the current performance of your employee. Be specific about where the employee is falling short, including examples. Tip: Collaborate Discuss performance issues in a meeting beforehand to engage all parties (manager, HR, and employee) in the process.
Create Objectives Use the SMART framework to define objectives and determine how to measure success. Tip: Determine the Reason for Performance Issues Identify the root cause of poor performance to ensure the PIP is worthwhile.
State Support for the Employee Outline how the manager will assist the employee, such as through training or coaching. Tip: Consider How You Can Help Focus on providing what the employee needs to improve, rather than expecting them to achieve objectives alone.
Schedule Regular Check-Ins Specify how often you will meet with the employee to provide feedback and create a check-in calendar. Tip: Don’t Wait Until the Deadline Regular check-ins allow the employee to address any doubts or difficulties and help you ensure they are on track.
Mention Consequences for Lack of Improvement Clearly communicate the consequences if the employee fails to meet the improvement goals.
By now, you should know how to create a PIP tailored to your situation. Ensure your employee understands how to respond and succeed in the PIP by focusing on improvement rather than punishment. Discuss where they excel and set achievable goals that benefit everyone.
Performance Improvement Plan Examples
Example #1: Chronic Absenteeism and Lateness
Goal: Reduce absenteeism
Objectives: No absences for 6 weeks; arrive on time for shifts
Problem: Absences and tardiness affect colleagues and business. Identify root causes, such as transport or childcare issues.
Plan: Provide support based on identified challenges, e.g., reliable transport or shift adjustments.
Check-ins: Every Monday at 10 am for 6 weeks
Metrics: On-time arrival for each shift
Example #2: Poor Customer Service
Goal: Improve customer service levels
Objectives: Achieve better customer retention and engagement
Problem: Clients complain about inadequate support, leading to negative reviews. Determine if the issue is attitude or knowledge-based.
Objectives: Graphic designer meets design deadlines to allow timely social media campaigns
Problem: Excellent designer, but poor time management leads to missed deadlines, affecting sales.
Plan: Implement time management training, use time tracking tools, and adjust approval process.
Check-ins: Fridays at 10 am to review weekly deadlines
Metrics: Time spent on tasks, timely deployment of assets
Performance Improvement Plan (PIP) Template
Employee Information
Name:
Position:
Department:
Manager:
Date:
Purpose of the Plan
Clearly state the purpose of the PIP, e.g., "The purpose of this Performance Improvement Plan is to outline specific areas of concern regarding the employee’s performance, provide steps for improvement, and establish metrics for evaluating progress."
Performance Areas of Concern
Area 1:
Description:
Impact on Team/Business:
Area 2:
Description:
Impact on Team/Business:
(Include additional areas as necessary)
Goals and Objectives
Goal 1:
Objective:
Goal 2:
Objective:
(Include additional goals as necessary)
Action Plan
Action Steps: Outline specific steps the employee must take to improve performance.some text
Step 1:
Step 2:
Step 3:
Resources and Support
Training/Resources Provided: List any training sessions, resources, or support that will be provided to the employee to aid in their improvement.some text
Resource 1:
Resource 2:
Timeline and Milestones
Start Date:
End Date:
Check-in Dates:
Date
Milestone/Checkpoint
Status/Comments
(Date)
(Date)
(Date)
Metrics for Success
Metric 1:
Metric 2:
Metric 3:
Review Schedule
Frequency of Meetings: e.g., "Weekly on Mondays at 9 am"
Progress Review: Describe how progress will be reviewed and documented during each meeting.
Consequences of Non-Improvement
Clearly outline the potential consequences if performance does not improve by the end of the PIP period, e.g., "Failure to meet the outlined objectives may result in further disciplinary action, up to and including termination."
Acknowledgment of Receipt and Understanding
By signing below, I acknowledge that I have received this Performance Improvement Plan, understand its contents, and agree to work towards the outlined goals and objectives.
L&D managers plays a critical role in deciding if a performance improvement plan is required and whether it can be used effectively to create positive change. When done correctly, a PIP may be a tool for helping employees make positive changes that benefit the company.
FAQs on Performance Improvement Plan
A:PIP full form is Performance Improvement Plan. A PIP is a document outlining where an employee falls short and the steps they need to take to improve.
A: PIPs foster accountability, support struggling employees, improve company culture, and can save time and resources by addressing issues internally.
A: Key elements include company expectations, performance overview, action plan, follow-up schedule, and consequences for non-improvement.
A: PIPs usually have a duration of 30, 60, or 90 days, depending on the objectives and the severity of performance issues.
A: The action plan should have specific, measurable steps framed as SMART goals to guide the employee towards improvement.
A: Failure to meet PIP goals may result in further disciplinary action, including possible termination or reassignment.
A: Yes, PIPs can provide actionable standards for employees aiming for promotions or lateral moves by helping them achieve their career goals.
A: While PIPs aim to enhance employee performance, discussing underperformance can be complex and sensitive. Employees might perceive PIPs as a step towards dismissal. Additionally, PIPs can be time-consuming and resource-intensive, requiring significant investment in training and mentoring.
A: If an employee fails to meet the PIP standards, dismissal or reassignment may be necessary. Conversely, successful PIPs can lead to continued employment, salary increases, or promotions.
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