HR Glossary  /  Performance and People Management  /  Performance improvement plans

Performance improvement plans

What is a performance improvement plan (PIP)?

A performance improvement plan (PIP) is a structured process that employers use to address and correct issues with an employee’s performance to help the employee meet expected standards. A PIP typically involves specific goals, timelines, and regular feedback. It is essentially an action plan to improve an employee’s performance at work.

When should you implement a PIP?

You should implement a PIP for an employee when you have concerns about their productivity, performance, or leadership. The PIP identifies an area for improvement and offers objectives, strategies for achieving stated objectives, and a timeline to make those improvements. A PIP is best suited for performance issues, such as an employee regularly not attaining their required sales goals or failing to meet deadlines. Poor performance differs from misconduct. Performance problems are often a result of a lack of training, skills, or understanding. Poor performance can be solved through coaching and mentoring provided through a PIP, which is not disciplinary. For cases of misconduct, organizations should use progressive discipline rather than a PIP.

What does a PIP include?

PIPs are established for a set period (often 90 to 120 days) and involve regular meetings to evaluate the employee’s progress. A PIP typically has four components:

  • An explanation of the poor performance the plan addresses, including any metrics or key responsibilities that have not been achieved that quantify the poor performance; 
  • What actions the employee can take to improve their performance; 
  • What tools, training, or other support the employee can expect to receive throughout the process; and 
  • The consequence of not successfully attaining the desired performance expectations within the set period. 

What if an employee’s performance does not improve by the end of a PIP?

At the end of the agreed-upon PIP period, if the employee’s performance hasn’t improved or they haven’t achieved expectations, employers can create a new plan, extend the existing one, or, only after careful consideration and consulting legal counsel, terminate the employee.

Resources:

  • Performance Improvement Plan Form 
  • The Advisory Chronicles: Performance Improvement Plans vs. Progressive Discipline 
  • Performance Management Best Practice Guide 
  • Performance Management tool

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