How to Create a Performance Improvement Plan for Your Team

Updated on: 10 June 2024 | 8 min read
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A well structured performance improvement plan (PIP) can help align employee actions with broader organizational goals. It helps employees understand where they are falling short in terms of performance, and take proactive steps to correct their course. A good performance improvement plan encourages employees to learn from their mistakes and move forward, reducing staff turnover.

In this blog post, we delve into what a PIP is, and you can create a PIP for your organization.

Also read our guide on the performance planning processes.

What is a Performance Improvement Plan (PIP)?

A performance improvement plan is a formal document used by managers to address and improve an employee performance. A PIP clearly outlines specific performance issues and provides a structured framework for improvement. It includes measurable goals and timelines, making it a vital tool for employee development.

A PIP is specifically tailored to address particular areas of concern with clear, actionable steps. Understanding what a PIP entails and how it differs from other performance assessments is crucial for effective implementation. While regular performance reviews focus on overall performance, a PIP targets specific deficiencies and offers detailed solutions for improvement.

Key elements of a PIP include setting clear objectives, detailing an action plan, and establishing performance metrics to assess progress. PIPs promote professional growth and aligning individual performance with organizational goals. Examples for instances where you can implement a performance improvement plan include consistent failure to meet sales targets, poor teamwork, or repeated project delays.

Why Use a Performance Improvement Plan

Clarifying Expectations

A performance improvement plan (PIP) sets clear, achievable goals for employees who are not meeting job expectations, providing a structured opportunity for improvement. It also serves as a motivational tool by showing employees that their performance is important to the organization and that the company is invested in their success.

To Enhance Skills

PIPs help employees enhance their skills and abilities, aligning their performance with the company’s standards and expectations.

Preparing Employees for Promotions

For employees on the cusp of promotion, a PIP can outline the additional skills and achievements needed to advance to the next level.

Performance Documentation

It provides a documented process that can be referred to in future evaluations, ensuring that both employee and employer understand the steps taken to improve performance.

When to Use a Performance Improvement Plan:

Consistent Underperformance

If an employee consistently fails to meet job standards or exhibits a decline in work quality, a PIP can address these issues directly with targeted actions for improvement.

Behavioral Issues

For issues related to professionalism, teamwork, or adherence to company policies, a PIP can outline the behavioral changes required to remain in good standing.

Missed Deadlines and Productivity Concerns

When an employee struggles with time management or productivity, a PIP can set specific benchmarks for improvement and track progress.

Pre-Termination Step

Before considering termination, a PIP can be a final effort to assist the employee in meeting the necessary standards, potentially avoiding the need for dismissal.

Step-by-Step Guide to Writing a Performance Improvement Plan

Let’s dive into the specifics of creating a performance improvement plan.

1. Identify the Specific Performance Issues

Begin by clearly identifying the areas where performance needs improvement. This could range from missed deadlines to declining sales numbers. Being specific helps in targeting the right solutions.

2. Specify Measurable Objectives

Set clear and quantifiable goals that reflect what success looks like. These objectives should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound) to ensure they are effective.

3. Detail the Action Plan

Outline the steps the employee needs to take to improve performance. This should include resources they might need, support from management, and any training sessions required.

4. Set Clear Performance Standards

Define what good performance looks like with clear benchmarks. This helps in eliminating ambiguity and setting clear expectations.

5. Define the Review Period

Establish a timeline for the PIP, typically a few months, allowing enough time for improvement but also keeping a sense of urgency.

6. Discuss Potential Outcomes

Clearly communicate the consequences of not meeting the objectives of the PIP, but also discuss potential positive outcomes and growth opportunities.

7. Schedule Regular Check-Ins

Regular meetings to review progress are essential. These check-ins provide opportunities for feedback and adjustments to the plan as necessary.

8. Incorporate Feedback Mechanisms

Feedback is crucial for improvement. Ensure there are mechanisms in place for the employee to give feedback on the PIP process itself.

9. Make Use of Templates

Templates provide a clear and consistent format for documenting areas of concern, setting achievable goals, and outlining the support available to an employee. They ensure that the process is standardized, which can help in fair treatment of all employees and make the expectations transparent. Moreover, templates can guide managers through the process of creating a PIP, ensuring that all necessary components, such as timelines, checkpoints, and criteria for success, are included.

Read our guide on performance improvement plan template to learn how you can use it to implement your performance improvement plan.

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10. Conclude with Mutual Understanding

Ensure that both parties are on the same page regarding the PIP’s objectives, processes, and outcomes. This mutual understanding fosters a supportive environment conducive to growth.

Benefits of Implementing a Performance Improvement Plan

The primary benefit of a performance improvement plan is that it effectively addresses underperformance while aligning employee actions with organizational goals. Here’s how a PIP plays a crucial role in helping companies and individuals achieve success.

Aligns Actions with Goals

A well-defined PIP helps bridge the gap between current employee performance and the company’s expectations, ensuring everyone is on the same page and moving towards the same objectives.

Clarifies Roles and Responsibilities

PIPs provide a clear framework for what is expected from each employee, reducing ambiguity and enhancing role clarity. This is crucial for maintaining structured growth within the company.

Promotes Organizational Cohesion

By setting clear expectations and providing support, PIPs foster a more unified workforce. This cohesion is essential for seamless operations and a positive workplace environment.

Reduces Staff Turnover

Through constructive feedback and support, PIPs can help retain talent by addressing issues proactively rather than allowing them to escalate to the point where employees feel their only option is to leave.

Provides a Structured Approach to Performance Issues

PIPs offer a systematic method to address performance deficiencies, providing clear goals and timelines which help in measuring progress effectively.

Read our guide to improving organizational performance for more insights into enhancing employee performance.

Key Elements to Include in a Performance Improvement Plan

Here are the critical components that should be included in any effective performance improvement plan:

Measurable and Achievable Objectives

Clearly define what success looks like with specific, measurable goals. This ensures both the manager and the employee understand the targets and can objectively assess progress.

Detailed Action Plan

Outline the specific steps the employee needs to take to improve performance. This plan should include resources or support from the organization to help the employee achieve these objectives.

Clear Performance Standards

Set explicit criteria against which performance will be evaluated. This removes ambiguity and helps the employee focus on what is expected. Use performance review templates to implement a structured performance review process.

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Regular Check-ins

Schedule periodic meetings to discuss progress, challenges, and provide feedback. These sessions are crucial for keeping the plan on track and making adjustments as necessary.

Defined Review Period

Establish a timeline for the PIP, including milestones and an end date. This helps in creating a sense of urgency and also provides a clear timeframe for expected improvements.

Each of these elements plays a vital role in the structure and success of a PIP. Utilizing performance management templates can help streamline the creation of these documents, ensuring all essential components are covered effectively.

Tips to Address Performance Issues While Maintaining Employee Self-Esteem

Firstly, a performance improvement plan is not a punishment. Therefore, addressing performance issues within a team requires a thoughtful approach to maintain employee self-esteem and promote a positive work environment. The key is to ensure that the performance improvement plan (PIP) process is constructive and supportive.

Here are some strategies to help managers handle this challenging situation effectively:

Constructive Communication

Frame the conversation around growth and improvement, rather than criticism. Use positive language and focus on the potential for future success. This approach helps in reducing defensiveness and encourages a more open dialogue.

Regular Feedback

Incorporate continuous feedback mechanisms that addresses areas of improvement and highlights employee strengths. This balanced feedback can boost morale and motivate employees.

Empathy and Understanding

Show empathy and understand the challenges your team members may be facing. This can build trust and open lines of communication, making it easier to address sensitive issues. Use trust building strategies to promote an open and transparent work environment.

Clear Expectations

Ensure that the goals and expectations set in the PIP are clear and achievable. This clarity helps employees understand exactly what is expected of them and how they can achieve these goals.

Positive Reinforcement

Use positive reinforcement to acknowledge improvements and efforts. This not only boosts the employee’s confidence but also reinforces the behavior you want to encourage within your team.

By focusing on these strategies, managers can effectively address performance issues while maintaining a supportive atmosphere that encourages personal and professional growth.

Use Performance Improvement Plans to Drive Employee Growth

A well-implemented PIP not only clarifies expectations and roles but also fosters a culture of continuous improvement and accountability. PIPs are crucial for aligning employee actions with the broader organizational goals, ensuring everyone moves in the same direction towards achieving business objectives. The potential positive outcomes of a well-executed PIP include enhanced employee performance, reduced turnover, and a more cohesive team environment.

Managers should view PIPs not just as a means to address current performance issues but as an opportunity to foster a proactive, supportive, and high-performance culture within their teams.

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Hansani Bandara Content Specialist

Hansani has a background in journalism and marketing communications. She loves reading and writing about tech innovations. She enjoys writing poetry, travelling and photography.

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