What is a performance improvement plan?
In some workplaces, simply mentioning a “performance improvement plan” can fuel rumours of termination or employees being “coached out.” This reaction reflects the negative reputation of performance improvement plans (PIPs), which are occasionally misused to document poor performance and build a “case” for termination. But a PIP should never be the first step toward dismissal. It should be leveraged as a genuine coaching tool designed to improve performance, support employee retention, and preserve the employment relationship. When used effectively, a PIP is an effective tool to help underperforming employees.
What is a performance improvement plan?
PIPs should be viewed as agreements between the employee and management to work collaboratively to improve the employee’s performance. Clear Company reported that 92% of employees want more frequent feedback. Yet 77% of human resources leaders say annual reviews do not accurately reflect employees’ work. It’s clear there’s a substantial gap between effective feedback and delivery. But it’s not that employees don’t want this feedback. While coaching and ongoing feedback from management can and should be used in the right settings, there are many benefits to taking a formal approach.
A good performance improvement plan provides a roadmap for addressing the employee’s performance issues, providing feedback, and setting goals. Those goals are used to determine whether an employee has successfully completed the PIP or whether, at the end of the plan, more needs to be done. All employees deserve the chance to improve their performance before being terminated or receiving some type of discipline. It’s time to break down PIPs and discuss how they can help bring about the needed change.
How does a performance improvement plan work? What are the steps to prepare?
Discuss poor performance before starting a PIP
The first step in implementing a performance improvement plan is to determine whether it is the right solution to the issue. Maybe there have been some changes in the company that directly affect the employee in question, and they’re still adjusting. Maybe you’ve had an employee for several years who hasn’t been given the training needed to perform a new task, and they’re struggling. In these cases, a PIP may not be what’s needed. If there have been some consistent problem areas, or a once-great employee has become an underperformer, consider a PIP. If you do implement a PIP, it shouldn’t be a surprise to the employee. No one’s going to take kindly to suddenly being put on a PIP when they believe everything is going smoothly.
Before introducing the plan, you should meet with the employee. Discuss instances of poor performance when they arise, not weeks after. Communicating expectations gives the employee a chance to understand that their performance fell short. Explain what’s happening on their end. Perhaps they didn’t know something wasn’t up to standard. If performance is lacking, let them know that there is an issue and give them an opportunity to fix it. While a PIP can serve as documentation if you eventually need to terminate an employee, a paper trail shouldn’t be the sole motivation.
Performance improvement plans: Frame them positively
Even with ongoing discussions about performance, being put on a PIP can still create negative emotions and reduce morale. How a PIP is handled can help mitigate those feelings. Positively framing PIPs in a Performance Management Policy as support for an employee’s performance can help reduce the resentment an employee might feel after being placed on one. Having a company policy around the issue proactively lets employees know the potential actions that can be taken, while reassuring them that the primary goal is to help them improve, not get them out the door.
Set attainable goals
For a performance improvement plan to be effective, there must be a clear goal. If something wasn’t being achieved by the employee, communicate not only that it needs to change, but also how and when that change will occur. Don’t just tell an employee they’re on a PIP and that they need to fix the problem by an arbitrary deadline. Even if the goal is attainable, it can lead to a lot of confusion and frustration if it’s too vague. Guide the employee and help them reach expectations. Poor performance in an employee who shows potential is typically an easier problem to solve than replacing them.
To best achieve the goals you establish in the performance improvement plan, break them down into steps. What would success look like? What actions do you think might help remedy the situation? When should these goals be met?
Goal setting
Big changes take time, commitment, and a shared vision. Using an Employee Goal-Setting Template is a good way to establish desired outcomes and the actions needed to achieve them. Working with the employee to set achievable goals will help them engage with the plan and support their success. Working with the employee also shows that you want them to succeed and that you believe they can. Using a Management Goal Assessment Form can also help define, measure, and monitor goals. It also documents previous goal achievements.
Check in to review progress
Once you’ve identified the problem and the potential solution, regular check-ins with the employee are key to achieving the goal. Meetings about performance aren’t always the most comfortable, especially when performance has been an issue. So prepare and hold these meetings properly. This isn’t a time to scold an employee—it’s a time to review progress by having an open discussion. Come prepared to the meeting by identifying successes and challenges in each problem area. The employee should make similar preparations and provide thoughts on the challenges they are facing.
Giving this feedback allows the employee to take ownership of their work and share their opinion. Ownership and engagement go hand in hand: employees who feel a sense of ownership in their work tend to be more engaged, and this engagement improves their chances of success. Mutual feedback may lead to a more effective performance improvement plan. Getting the employee’s feedback on how the plan is going can help identify proposed solutions that might not be working as well as they could, so you can make changes to improve the plan’s effectiveness. Always remember to document each performance meeting and what took place by sending out a Discussion Follow-Up Letter to the employee.
Don’t hold it against them
Performance improvement plans are just that: plans to improve performance. They document an employee’s performance, both positive and negative, and can serve as a tool in multiple ways. However, if an employee succeeds at their performance improvement plan and puts their ship back on course, celebrate that achievement. Don’t search for new things to justify any negative beliefs you may have held. If you look for problems, you will find them. But exaggerating lingering, insignificant issues will reduce morale and hurt working relationships. The best advice here is to focus on mindset. The employee has demonstrated that they are tenacious, capable of change, and receptive to feedback. These are all great qualities to have in an employee! Be grateful for them, not resentful.
How to create a performance improvement plan: Key takeaways to remember
In the right circumstances, done with proper communication and feedback, PIPs can effectively bring about change in employee behaviour and performance. Their effectiveness as a tool depends on the angle you take when you approach them. If approached negatively or carelessly, the odds of success are lower. When approached with a positive, collaborative attitude, employee performance is far more likely to improve. Slowly but surely, you can shift your perspective toward the positive side of PIPs.
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