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TL;DR: Performance improvement plans (PIPs) provide managers with a chance to coach underperforming employees and help them achieve their full potential. However, they require careful planning and execution or risk making performance issues worse, dampening morale, and even causing staff to leave. This playbook will show you how to develop a meaningful and effective PIP that supports development and drives positive change.
People-first companies want their employees to succeed and to feel like they are progressing and thriving. That means it can be difficult to know what to do when a team member stops meeting expectations and responding to feedback. To support your employees in getting back on track, a performance improvement plan (PIP) may uncover the underlying causes of suboptimal work and help employees find their footing again.
While PIPs can affect positive change, they’re also tricky to navigate. There is a chance that, if employees don’t understand why their manager is suggesting an improvement plan, the relationship can become uncomfortable or damaged. Team leads have to plan each stage of a PIP carefully to maintain trust and support their team properly.
A performance improvement plan is a document that outlines an employee’s areas of growth and what they can do to improve. PIPs are most commonly used to address ongoing issues where the team member in question hasn’t shown significant improvement after several rounds of feedback, guidance, and coaching. For instance, you might implement a PIP for an employee who consistently misses deadlines, fails to follow company policies, or displays unprofessional behavior.
Performance improvement plans usually include:
The main aim of a PIP is to allow the team member to address performance issues and succeed in their role. Although it may be a precursor to a formal warning, a change in that person’s role and responsibilities, or even termination, it shouldn’t be treated as a form of disciplinary action.
When implemented effectively, PIPs show employees that you’re invested in their success and are willing to provide them with the support they need to thrive. This can motivate team members to improve their performance and fosters a supportive work environment. PIPs may also bring the following advantages:
Although PIPs can be effective, they have some limitations and disadvantages. It’s important to be mindful that they have the potential to:
Use this playbook if you have an employee who’s struggling in their position and hasn’t responded effectively to feedback and coaching.
For instance, you might consider a PIP if you’ve discussed the team member’s areas of growth in previous performance reviews but haven’t observed any significant progress.
Performance improvement plans are especially helpful when you’re managing an individual who doesn’t seem to understand why they’re underperforming. The PIP can provide them with specific direction and enable them to understand where to focus their efforts. To pinpoint where employees need more clarity or where they are perhaps overestimating their abilities, you could ask them to write a self-assessment.
Appraisal forms enable you to evaluate an employee’s performance over time. These could comprise data ranging from sales figures and targets to client approval ratings and attendance levels. The data you collect is ideal for identifying areas of growth, and helps you to set measurable goals for improvement. The performance metrics you document in evaluations can also act as an effective basis for measuring an employee’s future progress with a PIP.
Clear, consistent, and ongoing communication is vital to an effective PIP process. Managers need to keep reports informed and provide them with regular feedback so they feel motivated and stay on track. That’s why it’s essential to invest in people enablement software like Leapsome. To facilitate those discussions, our Meetings module allows you to structure conversations with employees and send them a summary of what you talked about, along with key action points. Combine that with our modules for Instant Feedback, Learning, and Reviews to share continuous assessments, custom learning paths, and transparent performance review data.
Writing a PIP is easier if you’re using software like Leapsome to create development plans, set deadlines, and track progress. Our management, tracking, and reporting tools reduce the risk of errors and provide a deeper insight into employee performance. Plus, if your organization has pre-existing competency frameworks, you can simply check what skills and expertise team members need to acquire to improve.
A PIP should be part of an ongoing review process and dialogue between an employee and their manager. Before you consider implementing one, you should have already conducted a series of performance appraisals over time, discussed any issues with your report, and documented them in detail. There should be clear evidence the team member has been performing below expectations and received related feedback.
It’s essential to evaluate an employee’s performance and talk about the possible implications with them before you consider further action. A PIP should never appear suddenly or before multiple rounds of feedback have been exchanged.
“The greatest pitfall I've seen with performance improvement plans is when they’re a surprise. Managers don't always take the time to provide feedback and coaching on a consistent basis, or they get frustrated with the lack of change and want HR to jump to a PIP.
In these cases, I've rarely, if ever, seen an employee successfully complete a PIP and continue to succeed in the company. They’re typically incredibly demotivated.”
— Ayanna E. Jackson, Career & Leadership Consultant
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The next step is uncovering the underlying reasons behind the employee’s lower-than-expected performance. Depending on the cause, you may angle their PIP in a different way. For instance, if a team member lacks motivation because they don’t consider their work meaningful or important, you might set them tasks that demonstrate how their role contributes to the bigger picture. On the other hand, if an employee displays unprofessional behavior toward clients, you might provide them with a series of communication training courses.
Setting specific aims is critical to the success of a PIP. This helps everyone involved in the process to understand what they need to accomplish and how you’ll measure progress. Ideally, you should set SMART goals, which are:
For example, a sales agent that is repeatedly not hitting their monthly target might be given the initial goal to reach 70% of the target, with a timeline to improve that percentage month-by-month. There’s no ambiguity about what success looks like in this instance, and having such clear aims will give the individual a sense of purpose and direction.
Team members may feel more positive about their PIP if you work on their goals collaboratively. That way, you’ll give them more ownership and accountability over the milestones they’re meant to reach and the plan overall. According to Gallup, one of the five conversations that drive performance is one in which managers and employees ”collaboratively set goals that stretch employees to achieve their best performance” and “collaboratively define what success looks like in the individual's role and connect that success to the employee's goals.”
To show staff that you’re invested in their development and want to give them the best chance of accomplishing their PIP, you have to play an active role in the process. That means offering team members whatever resources they need to achieve their goals. You might include a combination of the following:
If your company has a pre-existing framework for training and development, you can refer to it when crafting a PIP. Imagine your employee needs to undergo sales training to help them close a higher percentage of deals. You should be able to look at your usual development strategy and see what training sales staff usually need to reach an optimal level of proficiency.
🪜 Show employees how to take their performance to the next level
Leapsome’s Competency Frameworks visualize all possible development pathways through your organization.
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One resource you should never overlook is time. Employees will likely still have many of their original job responsibilities to consider alongside their PIP-related tasks. Plus, no matter how well you handle the process, most people will experience some extra stress and anxiety when they know they’re having performance issues and need to improve.
That’s why it’s essential to account for timing in PIPs and either create extra room in the employee’s timetable or break the plan into manageable chunks. You should establish exactly what you expect to happen week by week and consider the employee’s other obligations.
Additionally, you should establish a formal deadline for the PIP so the team member has an idea of how long the process will take. They may be more motivated when there’s a clear end in sight. You also need to communicate who will decide on the next steps so there’s no confusion when the performance improvement plan comes to a close. If you have to extend the PIP or even introduce more disciplinary measures, you don’t want the employee to mistakenly believe they can negotiate.
Once you’ve created a PIP with your employee, you need to check in with them regularly, monitor their progress, and exchange continuous feedback. There may also be unforeseen circumstances that require you to adjust the plan. For example, if the team member is absent with sickness for more than a couple of days, you may need to extend their PIP’s deadlines.
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That’s why it’s best to arrange a series of regular meetings during the implementation stage. These can be opportunities to check whether the employee is on track and provide them with extra guidance. However, feedback doesn’t only have to take the form of constructive criticism — you should also celebrate their successes and cheer them on.
After the deadline for a PIP has passed, your next steps depend on the outcome:
Since PIPs come into play as a result of less-than-optimal performance, it can be daunting for reports to learn their manager wants to put them on one. They may lose morale or worry about termination. However, the following advice can help people to make the best out of the experience:
Performance improvement plans shouldn’t be taken lightly. If you’re considering implementing one within your organization, ensure you have all the tools you need for a clear, fair, and transparent process.
Holistic performance management software like Leapsome can support your people before, during, and after a PIP. You can uncover signs of struggling employees quickly with our Goals and Reviews modules. Then, use our Meetings module to collaborate with employees on a plan that works for everyone. If you use our Competency Framework feature, you’ll have a basis for any development plans you create. Finally, you can use the Learning, Reviews, and Instant Feedback modules to guide employees and lead them on the path to success.
🚨 Address and resolve performance issues early on
Leapsome’s Instant Feedback, Reviews, and Meetings modules allow managers to maintain open communication with all their reports.
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What you should include in a performance improvement plan (PIP) depends on your business and the employee. However, PIPs usually include the following:
The exact period a performance improvement plan should last depends on the severity of the issues at hand and your company’s internal policies. However, it‘s usually between 30 and 90 days, which allows enough time for meaningful progress but isn’t so long that it becomes discouraging or draining for the employee.
Yes, a performance improvement plan can lead to termination of employment. Although the aim of a PIP is to help employees improve their performance, companies may consider disciplinary action if it isn’t successful. The PIP may also serve as proof the company had just cause for termination.
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