Here’s an unfortunate truth: Every manager will have to deal with an underperforming employee at some point. Some employees have trouble hitting deadlines or others deliver lackluster results.
And yet, Gallup reports that only two in 10 employees feel that their performance is managed in a way that motivates them to do high-quality work. There’s a lot your employees need—and ongoing communication about their performance is definitely near the top of the list.
How do you make that a priority? In some cases a performance improvement plan (PIP), also known as a performance action plan, can increase clarity for your employees.
What Is a Performance Improvement Plan (PIP)?
Employee performance improvement plans are exactly what they sound like: plans to improve an employee’s performance.
An employee performance improvement plan is an official document that lays out any repetitive and continuous behavioral and performance issues, as well as a plan for solving them. A PIP is helpful for encouraging struggling employees to take corrective action.
In general, a PIP serves two purposes:
- To correct an employee’s performance to help them succeed in their role
- To discern if the employee’s performance can be improved, and to document the dismissal process if necessary
Why Use a Performance Improvement Plan (PIP)?
Believe it or not, your employees want to have conversations about how to gain new skills and advance within your company, but they might not always be willing to ask for that sort of feedback.
Different research from Gallup found that 87 percent of millennials care about opportunities for professional development in their jobs, and yet only 15 percent of them strongly agree that they routinely ask for feedback. And according to the same research, just a third of millennials are willing to ask their manager for what they need most to get their work done.
The next generation to enter the workforce also isn’t afraid to have hard conversations and make mistakes either. One survey found that 63 percent of Gen Z workers want to hear constructive performance feedback throughout the year.
To address these development concerns—particularly for underperforming employees—managers may implement a performance improvement plan.
When to Use a Performance Improvement Plan (PIP)
Employee performance improvement plans are most frequently implemented when an employee is struggling to fulfill their responsibilities or meet their performance objectives.
That can mean something different to every manager and every employee, so here are a few times when you might use a PIP to point an employee in the right direction:
- When an employee is struggling. If an employee is missing the mark by being unreliable, disruptive, or their work quality or productivity has decreased, a PIP can put them back on track.
- To identify root causes of overall performance problems. Underperforming employees may be dealing with issues a manager is unaware of, like a lack of supportive team members or a personal issue.
- During an employee’s probationary period. Implementing constructive feedback during onboarding can help employees understand their new role and what’s expected of them. Plus, this can help new employees adapt to company culture, which can encourage them to stay with the company longer.
- When an employee exhibits poor performance but shows potential. Sometimes an employee shows low performance in one area of their job but excellent performance in another. For instance, maybe they have excellent customer service skills, but they’re routinely missing deadlines. They could just need a boost.
- When an employee’s personal problems are affecting work performance. Divorce, illness, the death of a loved one, a move, or even (ahem) a pandemic, can all cause a disruption in workflow. At the end of the day, we’re all human.
- When an employee’s performance is hurting company culture. When employees are treated unfairly, it can lead to unbalanced job responsibilities, with some employees working harder than others to create results.
- To show your appreciation for employees and help them advance up the ladder. Employee performance improvement plans have a bad reputation, but they can also be used to help employees move to other positions that suit them better. This could mean enlightening an employee about what skills they need for a higher ranking position, or helping the employee move to another position on the same level.
Here’s the gist: You can use a PIP whenever you think an employee’s performance could be improved, and ideally it’s the start of a collaborative process where you and the employee work together to help them excel in their roles.
Tips to Create a Performance Improvement Plan
PIPs are nerve-wracking for everyone. So, how do you make the conversation easier and ensure the plan helps rather than hurts your working relationship? Here are a few tips to help:
- Set reasonable expectations: Any expectations and objectives for employees need to be clear, so make sure that the employee understands what they need to do. Keep in mind that goals also need to be achievable. Only 21 percent of employees feel they have performance standards that are within their control.
- Not all feedback needs to be negative. If an employee feels they aren’t appreciated, they may not feel motivated to improve—and they may start the job hunt instead.
- Check in regularly. Regular check-ins give both managers and employees frequent opportunities to correct any problems early on and set employees up for success. This can also help with employee retention.
Finally, it’s worth connecting directly with your employee as you create the performance improvement plan. That will help you ensure that you’re not only hitting the areas where you think they need a boost, but also skills or duties where they’d like to advance.
Performance Improvement Plan Template
Performance improvement plans change from employer to employer, but if you want to implement a PIP in your workplace, it’s wise to have a template in place. This will help you keep these documents consistent among your employees.
Check out our free PIP template in Google Docs. Just click "make a copy" and you'll be taken to your own customizable template.
You can also customize our free PIP template in Google Sheets.
Your performance improvement plan should start with the basics of that employee, including their name, position, direct supervisor, and the date the plan took effect.
Next, the meat and potatoes of the plan will include four basic components: specific improvement goals with reasonable expectations, a progress timetable with checkpoints, resources to help employees meet expectations, and potential consequences if goals aren’t met.
Section #1: Improvement Goals
Your employee needs to know what they’re aiming for, so you need to clearly state what the acceptable performance looks like. Be specific when talking about problematic behavior or troubling performance and include examples to illustrate your point.
When it comes to future objectives, it’s helpful to create SMART goals. This acronym stands for:
- Specific: The goal needs to be clear.
- Measurable: The goal needs to have a metric.
- Achievable: The goal needs to be realistic.
- Relevant: The goal needs to be tied to specific goals.
- Time-bound: The goal needs a deadline.
Here’s an example you might include in an employee’s plan: Improve customer service scores for the month of March, receiving no more than one customer complaint for the month.
Since the PIP is a formal document, you also need to attach the employee’s job description, documentation of previous discussions, and any other relevant data. Create a simple checklist to include with your PIP templates to confirm you include the necessary documentation each time.
Section #2: Timeframe with Checkpoints and Deadlines
As forgiving and understanding as you want to be, performance issues can’t stretch into eternity. You’ll need to set a timeline for how long the performance improvement plan extends. What this timeframe looks like is up to you, but in general, deadlines for PIPs are usually 30, 60, or 90 days.
Goals only matter when there’s a plan in place for success, and you need to commit to working alongside your employee to reach those attainable goals. Your PIP needs to include regular check-ins to allow employees to voice concerns. Don’t wait until the deadline to determine progress.
Section #3: Resources
To help your employee reach your goals, you should provide them with any resources that can help them complete their activities. This can range anywhere from job shadowing to additional education, mentoring, or even time off for therapy sessions.
Regardless of the specific incentive or opportunity, you need to be able to answer these questions:
- How will you support your employee in achieving this goal?
- What specific resources can you provide?
- Will you provide additional resources contingent on performance?
Section #4: Explain Any Potential Consequences for Failing to Improve
Here’s the not-so-fun part: You also need to make any potential consequences, if any, clear to the employee. If an employee fails to meet your performance expectations during the PIP process over a period of time, that may require disciplinary action, a demotion, or even termination.
However, since PIPs are often red flags to employees, it’s critical that your employee doesn’t take the PIP as a sign they will soon be fired. The PIP itself isn’t a disciplinary action, rather, it's a step to help them course correct.
With that in mind, try to focus on improvement over punishment by setting an improvement goal that benefits everyone. Remember, the end result of any performance review should be to help staff members raise their performance levels in their current role.
Help Your Employees Achieve Peak Performance
Despite the fact that performance improvement plans can raise some red flags with your employees, they’re an invaluable tool for supporting your team members as they grow with your business and advance in their careers.
A performance improvement plan itself isn’t a disciplinary action, but is instead designed to show your employees that you’re invested in their performance and committed to helping them take steps in the right direction—rather than blindsiding them with some sort of reprimand.
So, if you’ve been correcting repeated mistakes from an employee or simply think they’re capable of more in their role, this sort of document can help you get everybody on the same page.