Performance Improvement Plan

What are performance improvement plans (PIPs)?

PIPs are used to help struggling employees achieve better performance, results and growth. Performance improvement plans (PIPs) are a key part of performance improvement (which itself falls under the umbrella of performance management).

Used correctly, a PIP can take an underperforming employee and give them the support they need to meet your organization's expectations and needs—whether that’s productivity, or behaviors.

However, performance plans don’t necessarily have to focus on an individual, and they can be used to improve performance at a team, department or even organizational level.

Improvement plans implemented at these levels are called “organizations performance improvement”, rather than individual performance improvement.

How is performance improvement measured?

Organizations can use various metrics to gauge performance improvement. On an individual level, managers might track an employee’s progress over time using:

• Timesheets
• Peer feedback
• Quality control
• Performance reviews

While the need for performance improvement is universal, the methods for measuring improvement vary. It's essential to recognize that the performance improvement plan structure is only effective if the performance issues in question can be resolved with a structured plan and time-sensitive goals.

For example, quantitative deficiencies like sales goals or production quotas lend themselves well to a performance improvement plan because all it takes to track a goal is to measure whether the number is improving. Qualitative matters like poor leadership or disrespectful behavior are much more challenging to fit into a structured plan and to track over time.

When should you use a performance improvement plan (PIP)?

Using a PIP to address poor performance is often a better solution than terminating an underperforming, but valued employee. Instead of removing the employee and losing their future potential (along with the investment in recruiting and training them), these plans target any below-par performance or unacceptable behavior and provide a path for change.

Beneficial PIP situations

Below are some instances where a PIP fits best:

• An employee meets expectations in most performance areas
• A historically good performer is experiencing recent issues
• An employee is experiencing personal challenges, but their window for leeway is ending
• A hardworking new hire requires more time to learn the necessary skills during the probationary period.

PIP situations to avoid

On the contrary, implementing a PIP in the following situations may not be as effective.:

• A good employee is placed under a new manager with higher performance standards
• A long-time employee has a history of mediocre performance but has never received feedback and has no strong motivation to correct actions or behavior
• A problematic employee is already at risk for termination or is determined to leave the company
• An employee finds their competencies are misaligned with new work requirements
• A worker becomes involved in a serious incident like theft, violence, or gross insubordination.

Before starting a PIP, there should be a clear conversation and collaboration between the parties involved. Enforcing the drafted plan on an unknowing or unwilling employee often does more harm than good, causing performance improvement to fail before it even begins.

What type of performance issues could benefit from a performance improvement plan (PIP)?

A performance improvement plan isn't a panacea for all unsatisfactory employee performance. For example, it’s better to address attendance-related issues and disruptive behaviors when they happen instead of waiting to bring them up in a formal review. This not only helps the employee with the issue but also helps reiterate your organization’s standards to the employee’s coworkers.

Below are some performance issues that a comprehensive PIP may address:

• Missed deadlines
• Unmet targets and goals
• Substandard work quality
• Not adhering to business policies
• Poor team behavior

Once performance gaps are identified, the formalized plan should have established objectives, clear actions or strategies, milestones, and measurable metrics to determine improvements. It's also crucial to set coaching sessions and regular meetings during the PIP time frame to keep track of progress.

Employees should understand that they must meet indicated PIP objectives to avoid the consequences. While management should give employees on a PIP every opportunity to improve with their full confidence and support, the stakes and timeline need to be clear regarding demotion, reduced pay, or job loss.

Performance improvement plan process

Every HR team has their own processes for PIPs, but there are some rules of thumb to ensure that your performance improvement plans work, if you want them to deliver improved results.

Before you implement your performance improvement plans, here are some processes to consider:

• Determine the issue and define the areas of improvement, then get a draft of these drawn up and confirmed by the relevant parties—these areas of improvement need to be realistic, achievable and quantifiable goals.
• Host a meeting, preferably one-on-one or with their manager, detailing why the employee is being put on a PIP. You should also highlight what the goals and objectives of the PIP are.
• Set clear objectives that can be easily understood and tracked. It’s essential that your employee understands what the performance plans goals are and can progress them.
• Provide continued training and support, otherwise your employee could become lost. Whatever happens, don’t deliver the PIP and then leave them to flounder – it’s important that you do your best to support an employee through the performance improvement plan process.
• Regularly check in to provide feedback and evaluate the results of the performance improvement plan. By doing this, you can better identify areas of strength or weakness. By the end of the performance plan window, you should get a better sense of your next actions. If the employee improves, the results of this plan may provide valuable learning going forward and could contribute to further development.

What to include in a PIP

You should tailor PIPs for the employee and situation, but there are some key elements you should include generally:

• Company expectations – for example, to be punctual or to maintain a certain standard of work. Refer to the employee handbook where necessary.
• Areas for improvement.
• Timelines, including check-in dates.
• Next steps, with clear outcomes for different scenarios for example disciplinary action if certain standards are not met.

What is the time frame for a performance improvement plan (PIP)?

A good performance improvement plan is time-bound. Consider implementing a time frame of between 30 to 90 days with actionable objectives and to provide opportunity for checking in and reviews. After the PIP time frame concludes, there should be a commitment to keep improving in the areas addressed. The time frame you choose will depend on the identified areas of improvement on that employee’s circumstances as they relate to work.

If the duration of the PIP isn’t long enough, the employee may not have time to achieve the goals set out. If it lasts too long, it becomes meaningless. Try to think of a timescale that suits both the employee and the business, even if it goes beyond the 90-day mark.

Ultimately, PIPs are meant to improve an employee’s performance—not set them up for failure.

Performance improvement plans and employee rights

Employee rights may differ between states. To get a full list of your state’s labor laws, you should contact your state department of labor. Alternatively, you can visit the dol.gov website.

If the issuing of a performance improvement plan violates any employee rights or labor laws, your organization could find itself facing serious trouble. Remember, performance plans are designed to help employees—not offboard them. Additionally, you should research the alleged underperformance first to determine if it warrants a PIP, before instigating further action.

A performance improvement plan can’t be used to discriminate in the workplace. It’s important that you have a solid, transparent, and demonstrable reason for issuing a performance plan.

What is the difference between quality improvement and performance improvement?

Many people think quality improvement and performance improvement are the same, but there are some important differences.

Both processes adopt a systemic view in resolving problems, but they tackle different issues. Performance improvement addresses deficiencies in human performance, whereas quality improvement focuses on the organization’s processes and systems.

• Clear job expectations
• Timely performance feedback
• Increasing motivation
• Investing in necessary skills

Quality improvement is more inclined to consider broader interventions to improve work conditions, environment, and available support.