When an employee’s performance begins to fall short, it’s crucial to address the issue promptly, constructively, and with a clear plan of action. This is where creating a performance improvement plan (PIP) comes in. A well-crafted PIP not only sets clear expectations but also offers the support and resources an employee needs to improve their performance and regain confidence.
In this post, we’ll guide you through the steps on how to create a performance improvement plan for employees. Whether managing a high-performing team or addressing a struggling individual, a PIP can be a powerful tool to foster growth, better results, and long-term success.
What Is a Performance Improvement Plan?
A performance improvement plan (PIP) is a formalized document that outlines the steps an employee needs to take to improve their performance in specific areas. It typically includes clear goals, deadlines, and the support systems that will be in place to help the employee succeed. PIPs are often used in situations where an employee’s performance does not meet company standards but still has the potential for improvement.
The main purpose of a PIP is not punitive—rather, it’s an opportunity for the employee to improve and contribute more effectively to the organization. It’s a tool that encourages growth, builds confidence, and helps the employee understand what is expected of them.
Creating a performance improvement plan requires a structured, empathetic approach. It must be tailored to the employee’s specific needs and aligned with company goals. In addition to improving performance, a PIP can also be a key part of a career advancement plan for the employee.
Why Is Creating a Performance Improvement Plan Important?
There are several key reasons why managers should create a performance improvement plan for underperforming employees:
- Clarity of Expectations: A PIP helps employees understand exactly where they are falling short and what is expected of them. Without a clear plan, employees may be unaware of their performance gaps.
- Support for Development: A PIP offers a clear roadmap for improvement. It outlines the resources, training, and feedback mechanisms available to help the employee succeed.
- Boosts Employee Confidence: By addressing performance issues constructively, a PIP provides employees with the opportunity to improve and regain confidence in their abilities. It can be a motivating factor, showing the employee that their career is still valued by the organization.
- Legal Protection: A well-documented PIP protects the organization from potential legal claims. It serves as proof that the company made reasonable efforts to help an employee improve before considering other actions like termination.
Steps to Create a Performance Improvement Plan
Creating a performance improvement plan is a structured process. Here are the steps to help guide you through it:
Step 1: Identify the Performance Issues
Before creating a performance improvement plan, it’s crucial to clearly identify the performance gaps. Take time to assess the employee’s work, talk to colleagues and team members, and review any feedback or data on the employee’s performance.
Common performance issues that might trigger a PIP include:
- Missed deadlines
- Poor communication or teamwork
- Lack of initiative or engagement
- Failure to meet targets or objectives
Once you have identified the specific issues, you can tailor the PIP to focus on those key areas. Be specific about what the employee is doing wrong, and avoid vague language. For example, instead of saying “poor communication,” specify “fails to communicate project updates in team meetings.”
Step 2: Set Clear, Measurable Goals
A key part of creating a performance improvement plan is setting clear, measurable goals for the employee. These goals should be realistic and achievable, and they must be aligned with the company’s expectations and objectives. Setting SMART goals—goals that are Specific, Measurable, Achievable, Relevant, and Time-bound—is a great approach for creating effective performance improvement goals.
For example:
- Specific: The employee will increase sales by 10% over the next quarter.
- Measurable: The employee will have submitted three project updates per week.
- Achievable: The employee will complete an online course on time management within 30 days.
- Relevant: These goals should be tied to the employee’s role and department objectives.
- Time-bound: The employee should meet these goals within a set period (e.g., 30, 60, or 90 days).
By setting clear goals, you provide the employee with a roadmap for success. They’ll know exactly what is expected of them, how they will be measured, and when the goals must be achieved.
Step 3: Determine the Resources and Support Needed
The performance improvement plan should also outline the resources and support that will be provided to the employee to help them improve. This may include:
- Additional training or courses (e.g., management or technical skills)
- Mentorship or coaching sessions
- Access to specific tools or technologies to improve performance
- Regular feedback and check-ins with the manager
Providing this support helps the employee feel that they have the necessary resources to succeed. Without these resources, setting goals for improvement can feel discouraging to the employee.
If applicable, incorporate management training and development initiatives that will provide the employee with additional skills or tools to address performance issues. This could be training on time management, leadership skills, or communication.
Step 4: Establish a Timeline for Improvement
A critical element of a PIP is setting a timeline for improvement. You need to give the employee a realistic amount of time to meet the established goals. A typical PIP may last anywhere from 30 to 90 days, depending on the severity of the performance issues.
During this period, the employee should have regular check-ins with their manager to review their progress, discuss challenges, and adjust goals if necessary. These meetings provide an opportunity for the manager to offer additional guidance and for the employee to clarify any uncertainties.
The timeline should also include a final review meeting at the end of the PIP period. At this meeting, the manager will determine whether the employee has met the goals set in the PIP and whether further action is necessary.
Step 5: Provide Continuous Feedback
Feedback is essential throughout the performance improvement plan. It helps the employee understand how they’re progressing and where further improvements are needed.
Continuous feedback can be delivered in various forms, such as:
- Formal meetings (e.g., weekly or bi-weekly one-on-ones)
- Informal check-ins (e.g., casual conversations or quick emails)
- Written feedback on specific tasks or performance metrics
Make sure feedback is constructive, specific, and focused on the employee’s behavior or performance, not their personality. For example, instead of saying “you’re not a good communicator,” say “you missed three project deadlines due to a lack of communication with the team.”
Positive feedback is also essential—when the employee shows improvement, make sure to acknowledge their progress and reinforce their success.
Step 6: Evaluate Progress and Adjust the Plan if Needed
At the end of the PIP timeline, evaluate whether the employee has successfully met their goals. If the employee has made significant progress, then you may decide to end the PIP and continue to provide ongoing support as part of their development.
If the employee hasn’t met the goals, consider whether additional training, adjustments to the PIP, or a different approach is needed. If progress is not made despite your efforts, it may be time to explore other options, including a reassignment or separation from the company.
It’s important to document all the steps, meetings, and decisions made during the PIP process to ensure there’s clarity and consistency in the decision-making process.
Key Considerations for Managers
- Be Compassionate and Supportive: A performance improvement plan should be about helping the employee improve, not about punishing them. Approach the PIP with empathy and an open mind. Show the employee that you are invested in their success.
- Stay Consistent and Fair: Ensure that all employees are held to the same standards and that performance issues are addressed consistently across the team. Treat each employee with respect and fairness.
- Follow Up Regularly: Keep the lines of communication open. Regular follow-ups and check-ins are essential to track progress and make adjustments to the plan as needed.
- Ensure Documentation: Keep detailed records of the PIP process, including feedback, meetings, and decisions. This is important for both legal reasons and to ensure a clear and transparent process.
Planning to Be Better
Creating a performance improvement plan is a powerful way to help employees succeed and grow within your organization. By setting clear expectations, providing resources, and offering continuous support, you give employees the tools they need to improve their performance and develop their careers.
A PIP can also be a key part of an employee’s career advancement plan. It offers the opportunity for growth, professional development, and the chance to overcome challenges while contributing to the organization’s success. As a manager, creating a PIP requires patience, empathy, and consistency, but the results can be rewarding for both the employee and the team.
If done right, a performance improvement plan can help your employees thrive and lead to better results, stronger teams, and a more positive work environment.
Tidal Management is a prominent sales and marketing firm in California that helps companies optimize their daily operations and improve employees’ performance. We offer executive training programs, leadership development workshops, and other courses that can be customized to your organization’s specific needs. Contact us to learn more about our bespoke training and development programs.