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How to Successfully Implement an Employee Performance Improvement Plan (PIP)

Nicole Klemp

Sometimes, even with a comprehensive and well-executed performance management process—and a dedicated manager’s best efforts—some employees will fail to meet expectations. But instead of giving up on an employee whose performance is lacking, consider implementing a performance improvement plan (PIP). 

When executed well and with compassion, a PIP can motivate a struggling employee to improve their performance and recommit themselves to their job and the organization. 

In this article, we’ll discuss what a PIP is, when it can be beneficial, and the five steps to implementing one that gives you the best chance at a positive outcome.

What is a PIP?

A performance improvement plan (PIP) is designed to help employees who aren’t meeting their performance expectations. It serves as a roadmap for improvement, setting clear goals, focus areas, and timelines. 

A PIP covers specific areas of an employee’s performance deficiency, identifies any skills or training gaps they have, and sets clear expectations for their development. With a PIP, performance improvement goals are expected to be achieved within a set period of time. If the employee fails to meet them, actions such as demotion or even termination may be taken. 

While in some cases, termination is ultimately necessary, a PIP should never be seen as a means to an end. When employee performance issues arise, implementing a PIP should be viewed as a strategic and practical attempt to get the employee on a path to success.

When is a PIP needed?

A PIP is typically warranted when performance issues persist despite regular feedback and coaching or when the employee’s poor performance adversely affects team dynamics or organizational goals. 

It’s important to bear in mind that a PIP is not meant to be punitive. It’s intended to be a helpful tool for employee development when improvement is needed.

As attorney Katherine Rigby shared in an article for SHRM, a PIP isn’t usually necessary if an employee who typically meets their goals fails to do so on occasion. “However, if an employee is experiencing repeated or multiple performance deficiencies, a properly structured PIP can effectively provide the necessary road map and support to meet performance objectives,” she said.

Benefits of implementing a PIP

While it might sound a little scary to the person on the receiving end, PIPs can actually have positive outcomes for employees. They can facilitate a productive conversation between the employee and their manager and provide a structured approach to helping the employee become a meaningful contributor to the team.

Benefits of a performance improvement plan include:

  • Role clarity. A PIP outlines specific performance expectations, leaving no room for ambiguity. This clarity helps employees understand what is required to meet organizational standards.
  • Structured improvement. The plan provides a structured approach to improvement, breaking down goals into manageable tasks with defined timelines.
  • Employee development. PIPs are developmental tools that offer opportunities for skill enhancement and professional growth. This can boost an employee’s confidence and engagement.
  • Documentation for HR. From an HR perspective, implementing a PIP provides a paper trail of the organization’s efforts to support the employee, which can be valuable in the event of a legal dispute.

Potential pitfalls and repercussions to avoid

While a PIP can be a powerful tool for improving employee performance, there are some potential pitfalls to be aware of when creating a PIP, including:

  • Lack of clarity. Ambiguous performance goals or expectations can hinder the success of a PIP. An employee can’t improve if they don’t know what success looks like.
  • No warning. Employees facing a PIP should be well aware that they haven’t been meeting expectations and should never feel blindsided. PIPs should be used as a last resort after previous attempts to help the employee improve were unsuccessful.
  • Inconsistent application. PIPs should be consistently applied across the organization when individual performance expectations are unmet. Managers should never use a PIP with malicious intent or to “get rid” of an employee they don’t like.
  • Insufficient support. Without adequate support and resources, an employee may struggle to meet the expectations outlined in a PIP. Managers and HR must be ready to provide the necessary tools to enable the employee’s improvement plan.

5 steps to implementing a successful PIP

It’s essential to keep in mind that a PIP isn’t a punishment or something done to check a box before an employee is let go. It’s a development tool to help an employee reach their full potential so they can (hopefully) become an integral team member with a promising future.

If done successfully, a PIP can become a catalyst for continuous improvement and high performance. While every organization and team is unique, it helps to have some guidelines when implementing a PIP process. The following is a step-by-step guide that can help inform your own performance improvement strategy.

1. The manager drafts a PIP for the employee

Once an individual has been identified as someone who could benefit from a PIP, their manager should create a comprehensive document that includes specific performance issues, areas for improvement, goals to achieve, and a clear timeline. 

Managers should develop a realistic set of goals that the employee can actually achieve, outline the steps they should take to get there, and include clear start and end dates.

At a minimum, the PIP document should include:

  • The employee’s name and title
  • The date the PIP was issued
  • Specific performance metrics that need improvement
  • Goals and activities that need improvement 
  • Links to resources or trainings to complete (as applicable)
  • Target dates to reach individual improvement goals
  • Expected results with defined measurables
  • Target date for completion (typical durations for a PIP are 30, 60, or 90 days)

2. HR reviews the plan

HR plays a vital role in ensuring fairness and acting as an unbiased third party to help the manager administer the PIP. The HR team should review the plan to ensure it aligns with organizational policies and guidelines and determine whether a PIP is appropriate for the situation.

Here are a few questions to consider as you review a proposed PIP:

  • Is there a performance or behavioral issue that can be substantiated? 
  • What precisely are the performance deficiencies? (should include dates, specific data, or detailed explanations)
  • Have previous performance conversations been had with the employee? Do they understand they aren’t meeting expectations? 
  • What guidance or training opportunities have already been provided to help the employee improve? (What was the result?)
  • What are the proposed consequences if the PIP doesn’t result in improvement? 

3. The manager meets with the employee to review the PIP

The manager and employee should meet privately to discuss the PIP, and the manager should answer questions and provide any necessary clarification the direct report needs. (An HR representative can also sit in on the meeting if both parties agree.)

Ensure the employee understands the situation and the performance metrics they need to work on (e.g., sales numbers, tickets closed, widgets built, etc.) and explain the specific areas where performance or behavior is falling short. Saying something like “You have a bad attitude” isn’t helpful; be specific about what the employee has done (or not done) and what needs to change.

This meeting is also an opportunity to address any concerns the employee has and ensure they and their manager have a mutual understanding about the plan moving forward. The employee’s feedback should be encouraged to uncover and address any confusion and to allow them to take ownership of the action plan. Managers should be open to collaborating with their employee on reasonable adjustments to ensure the plan fits everyone’s needs. (Any changes should then be reviewed and approved by HR.)

4. The manager and HR provide support and resources

Throughout the PIP period (and beyond), the manager and HR team should actively support the employee. This may include providing additional training, mentorship, or resources to aid in achieving their outlined goals. 

Rather than dwelling too much on what they’re doing wrong, help the employee discover their strengths so they can realize their own potential. Help them understand how, with a bit more effort, they could contribute to the team in really positive ways.

As the process goes on, ask the employee how they feel they’re doing, what realizations they’ve made during the process (if any), and what else they feel they need to meet their goals. Managers should continue working with them to uncover what may be holding them back and what the organization can do to enable their success.

5. The manager monitors progress and conducts regular check-ins

In a study by McKinsey, researchers found that when managers work to develop their employees through coaching, performance management systems are 74% more effective. Just because your employee is on a PIP doesn’t mean that coaching mentality should stop—if anything, it should be ramped up.

Consistent monitoring and feedback are essential during this time. Regular manager check-ins help you track progress, identify challenges, and adjust to the plan if needed. These check-ins also demonstrate the organization’s commitment to the employee’s success. 

The successful implementation of a PIP requires a collaborative effort between the manager and HR with regular feedback and 1-on-1s. Reward success and cheer your employee on as they work to improve their performance and become their best self.

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