How to deliver a Performance Improvement Plan (PIP) with template

A Performance Improvement Plan (PIP) has been seen as a last resort for handling the delicate situation of bringing an underperforming employee back from the brink of dismissal.

Rather than a document that signals an impending negative outcome, a PIP can be used to better monitor current progress and set out realistic goals for future performance.

Now more than ever, workplaces cultivate an atmosphere of improvement and not failure. PIPs can be an invaluable part of your process to empower employees to succeed and a better way for you to manage your team.

In this article, we look at when you should and shouldn’t issue a PIP, what you should include in a PIP, and how to deliver a PIP in a positive way.

You can also find a PIP template for you to download and use.

Here’s what we’ll cover

What is a Performance Improvement Plan (PIP)?

A Performance Improvement Plan is a structured plan that outlines specific employee performance characteristics and issues and provides a detailed roadmap for improvement over time. It includes goals, timelines, and criteria for measuring progress.

Until now, PIPs have been perceived as a precursor to termination rather than a genuine opportunity for improvement.

This is mostly down to it being a document that meets the requirements of 5 CFR Part 432.

The PIP is offered as notification to an employee that their performance is not at the required standard and provides a formal period to improve before they can be demoted or dismissed.

Instead of being a useful intervention, PIPs have only been taken as a last resort to try to dramatically raise performance from an employee before commencing dismissal.

PIPs can be used far more constructively.

If implemented correctly, a PIP can help employees improve their performance to meet job expectations – or to motivate them to want to progress in the company.

It can also be used to constructively document deficiencies and provide a record of attempts to help the employee improve.

According to a McKinsey survey, 60% of respondents from companies with effective performance management systems reported that their companies outperformed peers over the past three years.

This highlights the positive impact of well-implemented PIPs on both employee performance and overall business outcomes.

If you’re considering implementing PIPs with your team, read on to find out when and how to issue.

When should you issue a PIP?

Every employee should have their goals and expected performance outlined at their first appraisal (and after they have completed their probation period if applicable).

Alongside this, a plan of your employee’s journey with the company.

This helps your employee and their manager to have a measurable document to refer back to.

As soon as there is a decrease in performance, a manager should be offering feedback and having conversations with their direct report to understand why this is happening.

Extending help to the employee and offering any support or training where necessary.

If their performance is still not improving, this is the time for you to create a document that outlines what needs to improve and how to achieve that and to implement a PIP.

Introduce the PIP soon enough so that your employee has the best opportunity to succeed. Don’t leave it too late in the process where any chance for recovery is setting your employee up for failure.

Appropriate circumstances for issuing a PIP

Potential for improvement: A PIP should always be issued when you have the belief that the employee can improve with structured guidance and support.

Personal issues affecting performance: When personal issues are impacting performance, a PIP can be used to provide structured support.

Recent decline in performance: When your employee who has previously performed well starts showing a decline in performance due to temporary issues, this can be a pivotal point at which to implement a PIP. By doing this, you can monitor whether improvements are being made to reach previous performance levels over an agreed period of time.

Consistent poor performance: When your employee’s performance consistently falls below acceptable standards despite receiving previous informal feedback, a PIP can help to provide clear, more formal guidance on any further intervention needed.

Policy compliance: Last but not least, depending on the wider setup of the company, PIPs might be needed in order to comply with organizational policies or labor agreements that require the use of PIPs for handling performance issues, such as 5 CFR Part 432.

The US Office of Personnel Management has more useful advice about performance management.

Inappropriate circumstances for issuing a PIP

There are many circumstances where a PIP can be beneficial, but there are also a few instances to note where it would be inappropriate:

Low likelihood of improvement: If your employee has consistently been a mediocre/low performer despite detailed feedback or multiple efforts on both sides to correct performance. Or, when there is clear evidence that performance issues are unlikely to be corrected, such as long-term skill deficiencies or misalignment with job requirements, a PIP is unlikely to help.

Termination paper trail: When the primary intention is to create a documented path for eventual termination rather than genuine improvement—with no previous evidence of having an informal or formal PIP in place—serving a PIP may leave you open to potential legal action from your employee. Unless you can prove you have implemented it to make positive changes to the working relationship, your employee may use it to claim that the expectations laid out in the plan —e.g. deadlines or number/nature of tasks – are deliberately unrealistic. This could then be referenced as unfair or constructive dismissal.

Severe behavioral issues: In cases of severe behavioral problems, such as theft or violence that necessitate immediate termination, there is no need to issue a PIP.

What is the best way to deliver a PIP to an employee or direct report?

As educator and author Stephen R. Covey once said, you should “treat your employees exactly as you want them to treat your best customers”.

Here are 5 steps for you to put a constructive PIP into place and keep your team motivated to perform:

1. The preparation stage

Have an initial conversation

Schedule a meeting to discuss the reasons for implementing the PIP, and any relevant performance issues, with your employee. Ensure this conversation is private and free from interruptions.

Remember, PIPs can be demoralizing and damaging if they are not approached in the right way and many employees see a PIP as one step from dismissal, especially if they have not been accustomed to using them from the start of their role.

So, it’s really important for managers to explain the reasons why the PIP is being put in place and reiterate the positive outcomes of following such a plan.

Given that the very nature of a successful PIP is collaborative, perhaps the most critical element in creating a PIP is to involve your employee in the decision-making process, and make sure they feed into, and agree upon, any steps to help them improve and/or stay on track.

Draft the PIP document

Include SMART goals in the PIP (read on for a full breakdown of these goals). Ensure they are realistic and attainable within the specified time frame.

A PIP can last for 30, 60, or 90 days, or as mutually agreed to allow your employee to improve sufficiently.

Once you’ve drafted the plan, it’s a good idea to run it past your HR team to ensure it’s free from any bias as an employer, i.e., that it cannot be construed as an excuse to constructively remove your employee as discussed above.

If the PIP involves any HR-specific provisions, such as onboarding or L&D training recorded in your HR management software, they can also help you kickstart the process for immediate benefit.

2. During the meeting

Build enthusiasm (not fear)

Again, frame the PIP as a positive tool designed to help your employee improve and succeed.

Emphasize that the goal is to support their professional development rather than penalize them.

Communicate clearly

Explain any specific performance issues, the expectations for improvement, and the timeline for achieving these improvements.

Use clear and direct language to avoid any misunderstandings.

Allow questions

Remember, your staff may be nervous, or may simply have reflected on what was agreed on in your initial conversation, so it’s important to give them the opportunity to ask new questions or for additional clarification on the plan.

This is your chance to show compassion and foster commitment when it comes to following the PIP.

3. After the meeting

Hold regular check-ins

Book in time to monitor progress, provide feedback, and make any necessary adjustments to the PIP.

These meetings should be documented to track your employee’s progress.

Provide support and resources

Ensure your employees have access to all the resources and support mentioned in the PIP.

This might include additional training sessions, mentorship, or other tools necessary for their success.

4. Documentation

Keep detailed records

As with any process within the organization, it’s important to keep a note of all meetings, progress reports, or any other communication related to the PIP.

This is especially important if the PIP does not result in the intended outcomes.

Consider using management software to help collate and store information in a central repository for future reference.

5. Close the plan

In most cases, your staff will start to improve during the course of their PIP.

However, if an employee’s performance does not improve by the end date agreed in the plan, you may need to consider closing the PIP and determining the next steps.

These could include reassigning or seconding them to another role or function within the organization, demotion, or ultimately, if there is no avenue left to pursue, termination.

What should a performance improvement plan include?

In your PIP, you should include the following:

Clear identification of issues

Outline the specific performance opportunities you’d like to explore, challenges you’re looking to overcome, or where your employee is falling short.

These could include factors such as their attendance, ability to meet deadlines, or level of customer service.

To get the best out of the process, this is where you need to provide concrete examples, avoid ambiguity and ensure your employee understands the issues.

SMART goals

When setting goals for your PIP, it’s a good idea to follow the SMART framework (see below): Specific, Measurable, Achievable, Relevant, and Time-bound goals.

These goals should be clear and directly related to the performance issues identified.

Defined timeline including dates for check-ins

Establish a clear timeline for achieving the goals, including start and end dates, with intermediate milestones if necessary.

The timeframe should be reasonable and allow the employee adequate time to improve.

In addition, don’t leave it until after the PIP has been completed to add in dates as it will require more effort to find suitable times to meet.

Instead, add firm dates into plan at the start.

Resources and support

Specify the resources, training, and support that will be provided to help achieve the goals.

This could include additional training sessions, access to tools, or mentoring.

Consequences of outcomes

You should clearly state the consequences if the performance does not improve (e.g. reassignment, demotion, or potential dismissal).

Documentation

Keep detailed records of all aspects of the PIP process, including initial conversations with the employee and HR, the PIP document itself, progress check-ins, and any adjustments made to the plan.

This is crucial for transparency and accountability.

What goals should you include in a performance improvement plan?

SMART was introduced in 1981 and has been an effective goal-setting method applied across all a range of fields including project management, personal development, and employee performance management.

SMART is a structure for creating goals that cover five key criteria – Specific, Measurable, Assignable, Realistic, and Time-related.

Let’s take a closer look:

Specific

Identify clear areas where performance can or must improve, such as meeting particular deadlines, improving accuracy, or achieving specific sales targets.

This ensures the employee knows exactly what needs to change.

Measurable

Set goals that allow both your employee and their supervisor to track progress.

For instance, specify that the employee must achieve a 95% accuracy rate in reports or complete tasks within a certain time frame.

Assignable

Outline who will do what and when. Goals should be directly related to the employee’s job responsibilities and areas of deficiency identified in their performance review.

This ensures the PIP is focused and fair.

Realistic

Ensure the goals are realistic and attainable given the employee’s current capabilities and resources available.

This encourages improvement without setting them up for failure.

Time-related

Establish a clear timeline for achieving the goals, including start and end dates, with intermediate milestones.

This provides structure, and just enough sense of urgency to motivate your employee to carry out their goals on time.

How to complete a performance improvement plan

Once the objectives of a PIP have been completed, it’s time for you to review the outcomes, close the plan, and consider whether a new plan needs to be put in place.

Step 1 – Review and document progress

As the PIP comes to an end, review your employee’s performance against the established goals.

Document the outcomes in detail, including all aspects of the areas of improvement and any goals that were met.

This ensures transparency and provides a clear record of the employee’s efforts and successes.

Again, don’t forget to highlight all positive progress made to motivate your employee.

Step 2 – Conduct a final meeting

Schedule a final meeting with your employee to discuss the PIP outcomes.

Ensure the meeting is private and free from interruptions, fostering a supportive environment.

Use this time to provide constructive feedback on their progress, celebrate successes, and discuss next steps.

Encourage them to share their perspective and reflect on their journey.

Step 3 – Address the results

If goals were met:

Acknowledge your employee’s efforts and improvements. Highlight the positive outcomes and how these will impact their role moving forward. Reinforce that meeting the goals is a significant achievement and integrate them into regular performance reviews with new development goals to continue their growth.

If goals were not fully met:

Focus on the progress made and discuss the areas that still need improvement. Clearly communicate the next steps, which may include extending the PIP, offering additional support, or adjusting the goals to better align with the employee’s strengths. Ensure all actions are documented and consistent with organizational policies.

Step 4 – Provide next steps and support

Regardless of the outcome, you’ll need to outline next steps for your employee.

If the PIP was successful, discuss future goals and ongoing support to maintain and build on the performance improvements.

If further actions are required, provide a clear plan and support to help the employee continue to improve.

This might include additional training, mentoring, or other resources to ensure they feel supported and valued.

Step 5 – Document everything

If there is one takeaway from this article— it’s to document everything that happens throughout the PIP process, including the final outcomes and any follow-up actions.

Not only does it protect your organization and provide a clear record of the support you’ve provided to the employee, but it can help you quickly and confidently address any concern they may have, as well as inform any future decisions related to their performance.

A performance improvement plan template

If you’re ready to draft your PIP, here is a useful template to get you started.

When a performance improvement plan isn’t the right course of action

While it’s natural to try to fix all performance issues with a PIP, it’s not always the best approach.

As a reminder, here are six instances where a PIP would not be appropriate.

1. Cases of misconduct

PIPs are not suitable for addressing cases of misconduct, such as theft, harassment, or violence.

Misconduct requires immediate disciplinary action rather than any performance improvement process.

Why? Because misconduct involves behaviors that violate company policies and ethical standards, which cannot be corrected through performance coaching.

2. Lack of improvement potential

When there is clear evidence that the employee lacks the fundamental skills or ability to perform the job despite training and support, a PIP will not be effective.

Why? Because if the employee has consistently failed to meet performance standards even after receiving support and training, other actions such as reassignment or termination may be necessary.

3. Immediate threat to safety or operations

If your employee’s performance poses an immediate threat to their own safety, the safety of others, or critical operations, immediate action is required.

Why? Ensuring workplace safety and maintaining critical operations are top priorities that require swift and decisive action, which PIPs are not designed to provide.

4. During probationary periods

The very nature of a probation period means the company is trialing, or testing out the new employee’s fit, skill set and performance.

Therefore, those who are still within their probationary period are not likely to be suitable candidates for a PIP and you should wait until this period finishes before you consider starting the PIP process with them.

Why? Probationary periods are intended for evaluating whether an employee is suitable for a permanent role, and so performance issues during this time may indicate a poor fit.

5. Repeated failures to improve (following PIPs)

If your employee has previously undergone one or more PIPs without significant improvement, continuing with another PIP may not be productive.

Why? Persistent failure to meet performance standards despite multiple interventions indicates that alternative measures, such as reassignment or termination, may be more appropriate.

6. Role misalignment

When your employee’s skills and abilities do not match the job requirements—for example, if they have been placed in the wrong role—no amount of training or support can bridge this gap.

Why? A PIP is not effective if the root cause of performance issues is a fundamental misalignment between the employee’s capabilities and the job’s demands.

What is the timeframe for a performance improvement plan?

The timeframe for a PIP can vary from company to company, or even from team to team.

As a rough guide, a PIP should last anywhere between 30 and 90 days, with regular check-ins during that time to monitor progress and make any necessary adjustments to the plan, as well as intermittent check-ins in the months following a PIP.

Meanwhile, guidance from the University of Oregon HR department states that PIPs should…

“start on the day the PIP is delivered to the employee and end 60 days later (or longer depending on whether an extension is granted). The post-PIP period includes the 12 months after the completion of the evaluation period. During these 12 months, the employee and supervisor are expected to meet at the 6-month point and the 12-month point to review the PIP and ensure the employee is continuing to sustain satisfactory performance. If satisfactory performance has continued, the PIP is officially closed 12 months after the completion of the evaluation phase.”

How often does a performance improvement plan work out well?

The success of a PIPs can vary greatly depending on a variety of factors such as why and how the PIP was implemented by the employer, how well it is received by the employee, and fundamentally, how well the two parties work together to achieve the intended outcomes.

The more genuine the intention for improvement, the more successful the PIP will tend to be.

And of course, as we’ve discussed, regular check-ins and support from management are vital factors contributing to their success​.

What is the performance improvement plan success rate?

Although more research is needed to ascertain the specific success rate of performance improvement plans in the workplace, there is evidence to suggest positive adoption.

According to one study, currently almost three-quarters of respondents (74%) report that performance management systems are successful when managers go out of their way to provide effective coaching and feedback​, setting the scene for the successful implementation of PIPs.

In a bid to improve performance management in the workplace – and elevate employee perception of PIPs – managers need to show their teams they’re giving them the best chance to succeed.

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Businesses can use a performance management software like Sage HR to develop workforce talent, streamline PIP process and build a robust performance management structure.

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