No matter how carefully you vet your employees, you’re bound to end up with low performers. Engagement wanes. Burnout happens. And when you need to address performance, or even behavioral issues, a performance improvement plan (PIP) can be a good way to address the issue with your employee and move forward.
Data shows PIPs are on the rise. A recent Wall Street Journal report shows 43.6 workers out of every 1,000 involved were in formal performance procedures in 2023. This was an increase of 33.4% from 2020.
PIPs are especially helpful when they inspire employees to improve. But they also serve as valuable documentation for an employee who may need to be terminated. Read on to learn how to write a performance improvement plan.
What is a Performance Improvement Plan?
A performance improvement plan is a formal document used to address employee performance or behavior issues and devise steps, resources, and a timeline to resolve the deficiency.
Employers use PIPs to address performance issues constructively, provide employees with a clear path to success, and ensure fairness before considering further disciplinary action. PIPs are a key part of talent management.
How to Create a Performance Improvement Plan Step-By-Step
Here’s how to write a PIP in five easy steps:
Step 1: Define the Problem
First, identify what the employee needs to improve. Include relevant data to back up any claims. For example, if you’re reporting an attendance issue, include timeclock data or observe and document the time the employee arrives and leaves each day for a few weeks in advance of the PIP.
Step 2: Determine Objectives
Define what success looks like by setting improvement objectives, and use the SMART goal framework, which refers to setting goals that are specific, measurable, achievable, relevant, and time bound. This ensures there’s no confusion in what the employee needs to do and how and when their progress will be measured.
Step 3: Establish the Timeline
Set a realistic deadline for improvement. Depending on the issue’s severity, this could range from 30 to 90 days. The timeline should give the employee enough time to develop new habits and demonstrate progress but should not be so long that it delays necessary changes. Break the timeline into checkpoints for regular progress reviews to provide feedback and course correct if needed.
Step 4: Define Resources
Support the employee by offering training, mentorship, or access to relevant tools. For example, if the issue involves technical skills, consider enrolling them in a training program. If it’s a behavioral or communication issue, pairing the employee with a mentor may help. Clearly outlining available resources shows that the manager and company is invested in the employee’s success.
Step 5: Point out Consequences
Clearly communicate both the potential positive and negative outcomes. Positive reinforcement might include recognition, incentives, or future career growth opportunities if improvement occurs. On the other hand, consequences may involve reassignment, demotion, or even termination. Transparency ensures the employee understands the stakes and is motivated to improve.
What to Include in a Performance Improvement Plan?
While the above outlines the steps to creating a performance plan, you still need to know what to include in the written plan. Here are the core components:
Objectives
Clearly state the purpose of the PIP and what it aims to achieve. Explain the performance expectations and why improvement is necessary. Be specific about the employee’s role in the process and how their improvement benefits both them and the organization.
Current Performance
Provide a comprehensive overview of the employee’s performance status. You can back this up by including information from one-on-ones or past performance reviews. Within the overview, highlight what the employee is doing well and where there is room for improvement. Include past successes to show improvement is possible.
Stakeholders
Identify key individuals who will be involved in the employee’s improvement process. This section helps the employee understand who they can turn to for guidance, as well as the people who are responsible for evaluating their performance. These people may include:
- An assigned mentor
- HR representatives
- Employee’s direct manager
Available Resources
List the support tools and resources available to assist the employee in meeting their improvement goals. You may simply provide options an employee can utilize, like guides and online training programs, or be prescriptive and require the employee to attend a specific workshop or meet with a peer mentor once a week.
Actions Steps
Outline a clear, step-by-step improvement plan the employee should follow. This should include specific tasks to complete and deadlines for achieving milestones along the way.
A well-structured action plan helps the employee stay on track.
Outcomes
Using the SMART goals made in step two and consequences outlined in step five, document outcomes. This includes how and when results will be measured and what the expected improvements should look like in practice. Define key performance indicators (KPIs) or benchmarks that will determine success, such as increased efficiency, higher accuracy, or improved collaboration, and explain what measures will be taken if improvement isn’t achieved.
Signatures
Finally, both the manager or HR representative overseeing the PIP and the employee must sign the plan to ensure they understand the terms. This ensures accountability and formal acknowledgment of the expectations set forth.
The Performance Improvement Plan Process
From implementation to evaluation, follow this process for administering a PIP.
Communicate Plan to Employee
The first step in the PIP process is to clearly communicate the plan to the employee. This includes outlining specific performance concerns, setting clear objectives, and defining measurable goals. Employees should understand the expectations, timeline, and consequences if improvements are not met. By providing this clarity upfront, you can set the tone for a constructive and transparent process.
Monitor for Progress
Next, keep an eye on the employee’s progress using agreed upon KPIs, and document improvements or continued challenges. Keeping accurate records helps provide objective insights when discussing progress.
Meet Regularly
If the employee isn’t meeting objectives, you should then meet with them to learn why and to find out if there are any roadblocks you can remove for them. That way, you can give constructive feedback on the employee’s performance and highlight areas of progress and improvement.
Meeting with employees allows the employee to provide feedback for you and the PIP process, too. This creates an open dialogue that encourages mutual understanding and continuous improvement.
Make Adjustments (if needed)
In some cases, adjustments to the PIP may be necessary. If an employee is making significant effort but facing unexpected challenges, consider modifying goals or extending timelines. Being flexible while maintaining accountability ensures that the plan remains fair and realistic.
Evaluate Performance
At the end of the PIP period, a final evaluation determines whether the employee has met the outlined objectives. If the required improvements are achieved, the employee can transition out of the PIP with ongoing support. If performance has not improved, further actions such as extended monitoring, role reassessment, or termination may be considered.
Additional Tips to Create Employee Success
Creating an effective PIP requires a thoughtful approach that goes beyond simply setting objectives. Now that you know how to write a performance improvement plan, layer in the following best practices. These additional tips can help you support your employee’s growth and the organization’s goals.
Address Root Causes of the PIP
It’s important to identify and address the root causes of the performance issues, rather than just focusing on surface-level problems. This involves understanding whether the challenges stem from a lack of skills, unclear expectations, personal issues, or external factors. Uncovering this requires an honest conversation with your employee in which you actively listen without judgement.
Create Short- and Long-Term Objectives
A successful PIP should a mix of short- and long-term goals. Short-term goals help build momentum and give the employee a sense of accomplishment, while long-term goals ensure progress is sustained and aligned with overall performance expectations.
Think About the Future
The PIP process isn’t just about addressing immediate concerns; it’s also about preparing the employee for future success. To do this, you should consider how the plan can help them develop skills and behaviors that will be valuable to the team and business in the long run. This forward-thinking approach encourages employees to see the PIP as an investment in their professional development, not just a corrective measure. It also shows that you care about their growth as well.
Ask for Feedback
While receiving feedback can feel uncomfortable, remember performance reviews are a two-way street. Encourage the employee to provide feedback about the PIP process and their experience. This allows for a better understanding of any challenges they’re facing and shows their perspective is valued. Asking for feedback can also uncover potential gaps in the plan that may need to be adjusted to better support the employee’s success. This feedback can help improve future PIPs as well.
Stick to the Plan
Consistency is key in the PIP process. Once a plan is set, it’s important to stick to it and avoid making frequent, unnecessary changes. Although changes are sometimes necessary, providing consistency helps the employee focus on the objectives and allows for a clear assessment of their performance at the end of the PIP period.
How Paycor Helps
When it comes to evaluating employee performance and creating an employee performance improvement plan, the Paycor Human Capital
Management (HCM) platform has you covered. Paycor Talent Development software streamlines coaching sessions and performance reviews, capturing data that can be used for check-ins and monitoring improvement.
Empower employee growth with Paycor’s Learning Management System, which can offer courses personalized to the employee and their growth needs. Learn more with a guided software tour.