In an ideal world, everyone on your team would be a top performer. You could put any task or project in front of them and they’d accomplish it. But in this ideal world, there’d be no need for performance management. Real teams have their top performers, their hard workers, and the occasional season of low performance. In cases where a specific team member exhibits ongoing performance issues, managers typically use a performance improvement plan, or PIP to rectify the situation.
A PIP is a framework, agreed-upon by a manager and employee, for how a performance issue is going to be resolved. PIPs come with significant emotional weight and risk for both managers and employees. For managers, it’s the creation of a potential conflict as they put their expectations on the table.
For employees, the fear of being disciplined or even let go comes up as soon as a PIP is mentioned. Improperly implemented, a PIP can also potentially cause a breakdown in the relationship between a manager and their employee, preventing any actual improvement in performance.
In this guide, you’ll get a breakdown of what a PIP is, how it works, and the risks to watch out for when using one.
Key takeaways:
A performance improvement plan (PIP) is a framework for identifying, addressing, and improving persistent performance issues identified in an employee. This framework puts the performance issues on paper, ideally in a quantifiable way. It lays out the expectations the organization has for the employee involved and the support it will give them along the way.
The goal of a PIP isn’t to make employees feel like they’re on thin ice or to give them a list of their faults. It’s meant to recognize a gap between an employee’s performance and what’s expected of them while giving them a path to follow to close that gap. It protects both the employee and the employer by formalizing a performance issue and documenting the attempts being made to fix it.
While PIPs are appropriate for resolving persistent performance issues, they’re not a first step and they’re not always the right step. Some alternative interventions for resolving performance issues can be preferable instead. Interventions like:
Many teams use performance management software to document expectations, track progress, and ensure PIPs stay focused on development rather than discipline.
A PIP is usually most appropriate when a performance issue has persisted for a significant amount of time (usually weeks or months) despite being properly identified and communicated with the employee. For example, imagine that an employee’s communication skills have been lacking, in a way that’s caused problems both within their team and when collaborating with other teams. Imagine that their manager has mentioned the issue in a performance review and given guidance on how to improve it. And imagine that the issue hasn’t improved in months.
That’s when this manager should use a PIP.
Not all performance issues can be resolved with a PIP, however. In order for a PIP to be effective, the issue you’re addressing needs to be both coachable and measurable.
A performance issue is coachable when you can actually chart a path to improving it. Communication skills, for example, can be coached. Adjustments in word choice, channel selection, and communication style can all lead to marked improvements.
A performance issue is measurable if you can compare its state before and after a PIP has been implemented. A skill gap can be measured. An attitude usually can’t.
While PIPs are useful performance management tools, deploying one at the wrong time can do more harm than good. Deploy a PIP too early, and you might accidentally alienate an employee who would have been able to fix a performance issue without an official PIP. Deploy it too late, and it might be too late to actually address the performance issue at all.
An effective performance improvement plan should have the following elements.
A PIP should tell an employee exactly where they need to be. That shouldn’t involve just a single number or a few sentences. It needs to be a clear goal with clear milestones. Work out exactly how a performance issue should be resolved.
PIPs need to break down their objective into milestones that can be clearly measured. That way, there won’t be any misunderstandings around an employee’s progress. These milestones can be negotiated at the onset of a PIP, giving employees more ownership over their PIP.
PIPs give employees a target date for reaching meaningful improvement in whatever performance issue they outline. There should also be a timeline describing when managers will check in on an employee’s progress.
Managers own the PIP process, meaning they need to outline how they’re going to contribute to an employee’s potential growth.
PIPs need to describe what employees will do to work on the issue it outlines, based on the commitments they’re ready to make.
A PIP needs to be created and stored in a place where both employees and managers can access it. It should also have a plan for properly documenting the efforts employees make towards improving and any comments managers have along the way.
Because one of the main goals of a PIP is to standardize the way you address performance issues, you need to standardize the way you create them. Here’s a step-by-step guide for doing that.
Performance gaps are typically identified pretty early, but they need to be properly documented before they’re addressed with a PIP. Managers should verbally alert an employee about a potential issue and document that interaction. Instances of that performance gap affecting their work should also be documented.
A PIP should lay the foundation for the improvement efforts employees make by clearly outlining a manager’s expectations and desired outcomes. Agreement is important, as is specificity, here. Specifically name the gaps you’re trying to solve for and make sure both parties understand them.
From the desired outcome, sketch out some specific goals an employee needs to reach to meet the requirements of their PIP. Make sure these goals are measurable and actually achievable within the PIP’s timeline. “Improve communication skills” isn’t a clear goal. “Reduce mentions of miscommunication in 360 review by 50%” is.
A PIP isn’t just for laying out what employees need to do. It also needs to list the support that employees can expect. Managers need to list what they’re willing to do to support an employee. Employees and managers should also work together to figure out what resources employees need, and make them available.
PIPs need a clear end date, at which point managers will make a decision regarding an employee’s progress. They also need a schedule of performance reviews and other check-ins, which managers can use to support an employee as they work towards their goals.
Creating your first PIP? Don’t worry, here are a few examples to show you how it’s done.
Performance issue: Substandard work output
Desired outcome: Work output in line with team average
Goals: Work output matches or exceeds team average of 50 units, quality errors do not exceed 5%,
Support and resources: Manager will meet with employee monthly to review output, additional training will be provided, coaching sessions will be set up with top-performing employees
Timeline: Goals should be achieved by the end of Q3
Performance issue: Low communication skills create misunderstandings with other teams
Desired outcome: Issues due to miscommunications are at a minimum
Goals: Communication skills are rated as very good or excellent by peers, mentions of miscommunication in 360 reviews decreases by 75%
Support and resources: Manager will meet with employee monthly to check on progress, additional training will be provided, coaching sessions with communication experts will be provided
Timeline: Goals should be achieved by the end of the year
Performance issue: Attendance issues create dysfunction within the team
Desired outcome: Perfect attendance, barring justified absences
Goals: Unjustified absences drop to 0, every absence is justified
Support and resources: Manager will meet with employee monthly to discuss attendance issues and accommodations, attendance policy will be shared with the employee
Timeline: Goals should be achieved by end of quarter
Here are some common mistakes managers make when using PIPs.
A PIP should never come as a surprise to an employee. It should be a step in a longer conversation about the performance gap at hand. It’s not quite a last resort, but it should never be the first step to address that gap.
Additionally, a PIP should never be used to punish an employee. Never.
PIPs need to align managers and employees on expectations and lay out clear goals for solving a performance issue. That means goals should be measurable and achievable. Similarly, expectations need to stay consistent throughout a PIP process.
A PIP doesn’t just describe what employees need to do to close a performance gap; it also describes what managers need to do to support them along the way. Managers need to know that their commitment to a PIP doesn’t end when it’s written.
In some teams, a PIP becomes a formality before an employee is let go. A PIP should always give employees the best chance to resolve a performance gap and represent the organization’s support in them doing so.
Managers and organizations have a massive role to play in supporting employees through a PIP. Receiving a PIP naturally creates fear and similar emotions in employees, and they need support through this process.
Managers need to commit to providing ongoing feedback to employees as they work towards the goals in their PIP. In this feedback, they have a responsibility to create psychological safety for employees so they feel safe to be transparent about their progress towards their PIP’s goals.
Similarly, HR should oversee the PIP process from start to finish, without necessarily being directly involved in the progress employees make. They can provide resources and support when it’s requested, but managers are typically the front line when a PIP is involved. They also have a role to play in supporting managers as they help an employee work through their PIP.
Consistent check-ins are essential during the PIP process, as managers can help guide progress for employees and resolve issues as they come up.
A PIP has two potential outcomes: it’s either successful or unsuccessful. A successful PIP usually leads to an employee returning to their typical functions. From there, growth conversations are focused on the future and how employees can build up their skills, rather than fixing performance issues.
An unsuccessful PIP typically leads to termination, but that isn’t the only option. Managers and HR might instead:
No matter how a PIP ends, each one should serve as a learning opportunity for HR and managers. Review your PIP process to see what improvements you can make.
Performance management involves continuous, transparent, management-led efforts to improve performance in their teams. A PIP, while often seen as a stepping stone to a termination, is actually an opportunity for managers and employees to align on performance gaps and how they should be resolved. Just remember that a PIP should clarify expectations, involve regular feedback, and outline how managers will support employees through their work.
For teams looking to make performance improvement more structured and human, having the right systems in place can make all the difference. Performance management platforms like 15Five are designed to support ongoing feedback, goal clarity, and manager consistency long before a PIP is ever needed.
Want to see how a dedicated performance management platform can streamline your PIPs? Check out 15Five.