Running Your Business

A 5-Step Guide to Employee Performance Improvement Plans


  • 65 percent of employees desire more feedback from their supervisors in order to perform well at work

  • 70 percent of employees are not getting enough opportunity from management to set career goals

  • All employees deserve the chance to improve their performance before being terminated from a job

Posted by May 6, 2018

It’s clear that employees want more guidance when it comes to performance at work. A study conducted by the employee engagement firm Officevibe indicates that 65 percent of employees want more feedback from their supervisors in order to perform better at work. Another study by Gallup shows that only 30 percent of employees agree that their manager involves them in setting goals.

Performance improvement plans (PIPs) can be a constructive method for supporting employees who are struggling in an area of performance. A PIP is a customized plan that addresses specific areas that need improvement. In fact, they can transform a marginally productive employee into a highly effective worker.

However, many managers are uncertain when, why and how to use a PIP with an employee. Here’s what you need to know in order to create effective performance improvement plans for your employees.

Benefits of Using Employee Performance Improvement Plans

It’s far better to invest time and resources into helping an employee improve their performance at work than to terminate them. The costs (and time) involved with PIPs are minimal compared to what you will spend replacing an employee.

The struggling worker may just need to be reminded of their responsibilities and the expectations of their role. If, in the end, their performance has not improved and you decide to let the employee go, the PIP can prove (from a legal standpoint) that you did what was necessary to help the employee perform better at work before deciding to terminate their employment.

PIPs can also provide measurable results, which can be used for employee training and support as gaps are identified. Perhaps the biggest benefit of a PIP is that it’s not punitive by nature—it’s a positive way to enhance an employee’s capabilities.

Tips for Creating Better Performance Improvement Plans

In order to design PIPs that address the real needs of your organization, consider using the following five steps.

1. Document the Top Performance Problems

By the time an employee needs an intervention, their performance must be getting noticeably worse. There may be numerous issues present, but for the purpose of retaining an employee, it’s best to focus on the top three issues that are critical to the overall success of the employee.

Some issues fall into larger categories of performance. For example, tardiness can be a symptom of poor time management. Write a description of each performance discrepancy, along with the associated dates, notes detailing the employee’s actual performance and the expectations moving forward.

2. Create an Individual Plan of Action

Using the above information, meet with the employee to discuss their performance issues. Allow the employee to provide their feedback and absorb the seriousness of things. Present this as an opportunity, not as a disciplinary action.

It’s important to work together to create a reasonable set of goals that correct any performance or behavioral issues. Use the SMART goals model to set a reasonable set of objectives that are Specific, Measurable, Attainable, Relevant and Time-Based. A copy of the employee’s job description can assist in designing an action plan that works.

3. Provide Customized Support

The objective of a PIP is to provide an employee with ample time and resources to make progress and achieve success at work. If an employee has been struggling, it can be for many reasons. The worker will likely need support from their manager to clarify expectations, increase knowledge through corporate learning and participate in ongoing performance coaching. There may be problems getting along with other team members or personal problems, which could require the services of an employee assistance program or HR.

4. Get Commitment From the Employee

A PIP requires 100 percent buy-in from the employee, or it will not be successful. The employee has two choices: improve their performance or make arrangements to find another job. Ask the employee to review and approve the PIP with their signature, and give them a copy. Use this document to move toward a better future with the employee, reminding them that they must accept responsibility for the outcome.

5. Review Regularly and Measure Results

Performance reviews normally accompany the PIP process. As part of the goals set, establish a regular meeting time with the employee to discuss progress, obstacles and successes each week. Offer professional praise, recognition and incentives for meeting goals, as well as constructive criticism for failing to meet goals. Document everything and track progress with job-related metrics.

Keep the employee accountable for the performance improvement plan. Ultimately, they will need to make the effort in order to improve.

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