Performance improvement plan for your employees: A short guide

Every manager will have to deal with unsatisfactory performance from time to time. It’s always a challenge. But for the most part, it’s a case of working constructively with your employees to improve effectiveness and productivity.

Sometimes, however, an employee may display ongoing or chronic poor performance, which may call for a performance improvement plan, or PIP. 

A performance improvement plan is a formal process that aims to methodically address and resolve inadequate performance, ultimately benefiting both employer and employee.

A PIP specifies the recurring problem and sets out, with clear, time-bound objectives, what the employee needs to do to correct it. 

Handled correctly, the PIP process should be constructive for both the employer and the employee. However, when employees are put on a PIP, many will naturally fear their job is in danger and that this is the first step to dismissal. 

For this reason, it’s crucial to approach a performance improvement plan in a positive and supportive way. Employees need to believe that the purpose of the PIP is to help them improve their performance, not to reprimand or force them out of the organization.

This article will walk you through the basics of creating a performance improvement plan when it’s appropriate to use one, and how to use it in a way that positively improves your employee’s performance.

What is poor performance? 

Poor work performance is when an employee or team fails to live up to expectations, objectives, or standards.

It can be job-related—such as consistently missing sales targets or deadlines—or behavior-related, such as persistent absence or multiple complaints about the employee’s manner of speaking to clients. 

Of course, anyone can have an ‘off’ day, misunderstand a directive, or have a lapse in judgment with a customer.

Such isolated incidents can usually be addressed quickly and easily. But when unsatisfactory performance is relatively consistent and repeated, it may warrant further intervention, such as using a performance improvement plan. 

When should you use a performance improvement plan? 

For the sake of both the employee and the company, don’t rush into applying a performance improvement plan.

You must first decide if a PIP is warranted or appropriate. Understanding what lies behind poor performance is vital. 

Without putting the problem in context, the opportunity to address it effectively can easily be missed or mishandled.

A performance improvement plan will only be effective if it targets the root problem and addresses it appropriately. Here are some questions to ask:

Is a PIP necessary?

Try to resolve the issue without a PIP first. For example, conduct a series of informal conversations with the employee to identify and work through any difficulties or obstacles.

If informal interventions do nothing to improve the employee’s performance, then it may be that a PIP is warranted and necessary. 

Is a PIP appropriate?

In many cases, applying a PIP would be inappropriate. Performance issues arising from an employee’s ill health, for example, are outside the scope of a PIP.

In addition, serious behavior-related issues, like bullying, harassment, or other gross misconduct, cannot be resolved with a PIP and must be tackled through the organization’s disciplinary channels. 

Have you raised the possibility of a PIP with the employee in advance?

It’s important to raise this possibility as part of those conversations. Don’t spring a PIP on your employee unexpectedly, or they may view it as a threat or ultimatum.

PIPs must be considered, by employers and employees alike, as an opportunity for them to remedy any problems and improve performance in ways that will make them more productive and effective.  

How to use a performance improvement plan 

If the informal conversations mentioned above aren’t fruitful, it may be time to implement a performance improvement plan. Employers need to follow a fair and clearly defined performance management process.

The PIP should form part of a broader and impartial disciplinary process designed to manage any unsatisfactory performance in the workplace.

How you approach the PIP conversation is key. Naturally, employees may take it as a threat to their job.

If a PIP is warranted, it should ideally be created with the cooperation of the employee to set achievable goals and arrange for any required support.

This is all the more the case, as the PIP may hamper their future employment prospects. 

For these reasons, ensure that you present it as a two-way, participatory process. Including regular progress meetings as part of the PIP helps structure this process and keep things on track. It also offers the employee the benefit of positive, constructive feedback. 

At the same time, you need to be clear about what sanctions or steps will follow if the employee’s performance still falls short of expectations by the end of the plan.

If this sounds like an ultimatum, it could cause the employee stress or resentment, which may further undermine their performance. To ensure the PIP is not counter-productive, make it clear that you intend to support the employee throughout the PIP to avoid that outcome. 

If, at the end of the plan, their performance is still unsatisfactory and those sanctions come into play, both you and the employee can know that at least you did all you could.

How can a PIP be misused? 

Whether deliberately or accidentally, a PIP should not be used to ‘trip up’ the employees or drive them out of the business. Employers must not just treat it as a stepping stone to the termination of an unsatisfactory employee. 

Otherwise, the employee may have a case to claim unfair dismissal. The term “performance improvement plan” isn’t treated as a euphemism to sugarcoat the inevitable. It should be a genuine offer and effort on both sides to remedy performance issues. 

Signs that a PIP might be being used improperly include:

• unachievable, unclear, or inappropriate targets, suggesting an employee is being ‘set up to fail.’
• unfair or arbitrary application, such as applying PIPs to one employee and not another, despite similar performance issues.
• applying a PIP after isolated incidents of poor performance
• suspicious timing, for example, if redundancies are on the horizon. This could be interpreted as an employer seeking to avoid expensive redundancy payouts
• existing personality clashes between the employee and manager

What are the main elements of a PIP? 

A performance improvement plan is a formal document and should follow a consistent template. It should describe the specific and recurring performance issues and outline the actions the employee must take to improve.

It should also stipulate a specific time frame for the employee to complete the plan. This is usually 30, 60, or 90 days.

The targets can be broken down into smaller, more specific tasks to make the objectives more achievable. A PIP should also include employer-side resources, such as training, that support the employee in achieving them. In this way, the process is interactional. 

When the employee can trust that you are committed to their improved performance, they are more likely to commit to it themselves. 

Here are the key elements of a standard PIP and how you should approach each one:

• Area(s) of concern: Describe where and how the employee is failing to fulfill their duties, with specific and detailed examples.
  • e.g., From January 1 to January 31, the call-center employee has been the subject of 5 complaints from customers regarding poor resolution of client issues.
• Targets/objectives: List targets for performance improvement that are specific, measurable, achievable, relevant, and time-bound (i.e., “SMART goals”). By determining whether these objectives have been met, you can easily identify any improvement in performance.
  • e.g., Target 1: To increase the ratio of first-call resolutions between March 1 and March 12.
• Training and support: Detail any internal or external training, support, mentoring, or other resources you will provide to help the employee achieve their targets.
  • e.g., The employee will shadow a top-performing customer service representative for one day during March; the employee will attend online English language learning to improve understanding and reduce miscommunication issues.
• Time frame and checkpoints: Set the start and end dates of the plan, and include interim deadlines for (SMART) deliverables to keep the employee on track. Typically, PIPs last for 30, 60, or 90 days. 
  • e.g., Start date: March 1. / The employee will take two 1-hour English lessons per week, commencing March 8. / An interim meeting will take place on April 14 to assess progress… 
• Sanctions or further action: Stipulate the actions that will be taken if the employee fails to achieve the specified targets within the stated time frame. To give your employees the greatest chance of success, they must understand the targets set out for them and the consequences if they are not achieved.
  • e.g., “In the event of failure to achieve this target, a written warning will be issued to the employee.” 

If you work through this plan clearly and openly with your employee, it can be seen less as a warning and more as an opportunity to strengthen their performance.

By focusing your performance management on strengthening your employees’ competencies, you empower them to perform better in the first place. 

One way to do this is by incorporating ongoing learning and development into your employees’ roles.  According to a recent survey, 74% of employees say that a lack of career development opportunities is holding them back from reaching their full potential in their jobs.

Employees are attracted to companies offering development options to improve their performance and career prospects. This tells us that learning and development are vital for good employee performance. 

When managers invest in employee development as part of performance management efforts, they help employees lay the groundwork for better employee performance.

Building your employees’ competencies leads to improved performance, which results in better outcomes for employees and the company—and less need for performance improvement plans. 

Here are some ways to leverage the right learning opportunities to improve your employees’ performance:

• Develop competency frameworks with your staff that set out exactly what is expected of high performance in clear, measurable, and manageable statements.
• Work with your employees to identify potential vulnerabilities and areas where performance could be improved. This will help you address performance issues before they become problematic enough to need a PIP. 
• Look at what specific learning content, activities, and interventions could address those vulnerabilities and strengthen those competencies.

To take the earlier example, a call-center employee whose performance is under-par, because they lack the language skills to deal with international clients or customers may benefit from targeted language training support.

Corporate language training, such as that offered by Preply Business, would allow this employee to customize their learning to their needs and track their progress toward better performance. 

Final keys to effective performance management

No employee will be thrilled at the prospect of a performance improvement plan. Ultimately, both employers and staff should see the process as an opportunity to help the employee. 

Maintaining open and honest communication between supervisors and employees throughout the performance management process is key to ensuring trust and goodwill for both parties. After all, you both have the same goal—top-notch employee performance.

If a lack of language proficiency is an area holding your employees back, corporate language training with Preply Business could help set them up for great performance—with or without a PIP.

Discover how we can help with language training for your organization.