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5 Steps To Create A Performance Improvement Plan

Are you managing someone who’s underperforming? Have you been having open and honest conversations about their performance and not observing a change? If this is the case, it might be time to consider implementing a performance improvement plan. 

Performance improvement plans are an essential tool for any organization looking to ensure its employees reach business goals and objectives. These plans create clarity by setting expectations and outcomes, providing guidance, and implementing appropriate measures when needed.

They also help organizations track progress, measure success, and identify areas that can be improved upon over time. When done effectively, performance improvement plans provide a valuable framework for both employees and managers alike to work towards success.

In my 15 years managing people across industries, I’ve seen served as a mentor to people on a performance improvement plan and as a manager/writer/facilitator of plans.

In this step-by-step guide, I’ll equip you with the knowledge, skills, and information needed to get started using performance improvement plans in your organization (but only with the help and guidance of your HR representative and/or corporate counsel).

We’ll cover:

Let’s jump in!

What is a performance improvement plan?

A performance improvement plan (PIP) is a set of strategies designed to help improve an employee’s job performance. Typically, the plan outlines specific goals and expectations, timelines for meeting those goals, and regular feedback sessions to monitor progress. 

Additionally, the PIP will typically involve a range of strategies such as coaching, training sessions, and direct feedback. This helps employees make any needed adjustments to perform better.

PIPs are often used by managers to help team members clearly understand that they’re not meeting expectations, and are sometimes used as a last-ditch effort to get employees on the right track or face termination. 

This is a normal part of the performance management process, however, a PIP should never be a surprise if being leveraged for corrective action. 

In other cases, PIPs can be used in a much different way, focusing on the development of an employee to prepare them for a new role in the company. 

In these cases, a PIP is not considered disciplinary and does not include language about next steps if the PIP is not successful. These cases are much less common than disciplinary, action-related PIPs.

There are several different types of performance improvement plans that can be used to help improve an employee’s job performance. Generally, these plans are either corrective/disciplinary or focused on employee development. 

The types of plans include: 

1. Corrective Action Plan—this type of plan involves identifying and addressing specific performance issues through training, coaching, and/or disciplinary action.

2. Developmental Plan—this type of plan focuses on providing employees with training and opportunities for growth related to their current roles or preparing them for potential future roles within the organization.

3. Career Development Plan—this type of plan is focused on helping employees develop skills needed for advancement in their chosen career path. 

Pro Tip: Developmental and career-focused performance improvement plans are not typically associated with disciplinary action. Because of this, beware calling them a PIP! Socially, it's hard for employees to differentiate between disciplinary and non-disciplinary-type PIPs. Try an alternate name like “development plan” or “next-level performance action plan.” By using a different name, when the employee talks about it to other people they won’t have to defend that it's not disciplinary-related and can speak about it more confidently. 

For purposes of this article, the following information focuses on a disciplinary-related PIP as those are the most common and the most critical to be executed according to the correct protocols. 

Continue reading here if you want to learn more about disciplinary and performance-related PIPs. To learn more about employee development, there are a lot of handy resources here.

Why put someone on a PIP?

Performance improvement plans are typically put in place when someone isn’t meeting the job expectations of their current role. 

This strategy is designed to help the employee understand what needs to be done to improve their performance and provide them with the resources they need to do so. 

Additionally, having a documented performance improvement plan can ensure that everyone involved (employees, managers, etc.) is on the same page, and that the necessary steps are taken to address any issues. A PIP is a formal document of employee poor performance. 

In my personal experience, a few reasons why you would put someone on a PIP: 

  • The employee is not performing in their role and your prior attempts to correct the behavior have not been successful. This person requires a final warning with clear documentation and known consequences, typically including termination. This is a more wide-reaching PIP reason, but oftentimes it's not just one thing that’s not going to plan when an employee has reached the point of requiring a PIP. 
  • The employee engaged in unprofessional or inappropriate behavior. A PIP can be implemented to help the employee understand and address the issue. Of course, some unprofessional and inappropriate behavior is grounds for immediate termination. 
  • They’ve demonstrated an inability to follow standard procedures set by the organization. A PIP can provide guidance on how those processes should be followed correctly and outlines what will occur if processes continue to not be followed. 
  • The employee has continually demonstrated poor attendance and/or is negatively impacting business operations due to low productivity or is creating more trouble than value in the organization overall. 

Regardless of the driving cause, the decision to put someone on a PIP should not be taken lightly as it will likely alter the employee/manager relationship regardless of the outcome of the PIP. 

Once a team member is placed on a PIP, they will often seek out alternative employment and may exit the organiation prior to the completion of the PIP, especially if they do not believe the PIP is reasonable or that it is easy or realistic for them to achieve success. 

PIPs are often the last step in performance management before termination of an underperforming employee. According to Mark Carey, a partner at an employment law firm, “only about 5%-10% of PIPs result in the employee staying” with the company, so use this tool carefully!

Related read: Best Productivity Tracking Software for Hybrid Teams

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How to create a performance improvement plan

how to create a performance improvement plan infographic

You’ll want to craft a plan that is achievable, synced with the individual/team role and goals, and ensures that the team member receives proper support throughout the process. 

This can be done in a few simple, but critical steps.

Step 1: Consider if a PIP is appropriate

The first step in creating a PIP is confirming that a PIP is the right tool for the job. A PIP should never be a surprise.

The team member should have already received feedback and coaching from their manager (often many times) regarding the issues that have been festering and must now be addressed in a PIP. 

If you’re a manager that has not yet discussed performance with the team member you want to put on a PIP, it's not time to use a PIP yet. If the team member you’re considering placing on a PIP is newer to the organization, reflect on their onboarding experience (Were they trained effectively? Would additional training fix the problem?). 

The first step to implementing a PIP is having a conversation with the team member about performance and your expectations first, and always follow up with an email to document the conversation and confirm your expectations (HR will love you for this).

Once your conversations and follow-ups have proven unsuccessful over time, then it's right to consider using a PIP.

There are some exceptions to this rule, but that’s typically in the inappropriate behavior category—you’ll know these moments when they happen, they will be obvious (in a bad way). 

Keep your HR representative informed along the way. Your request as a manager to put an employee on a PIP should also not be a surprise to HR. 

Pro Tip: A PIP is not the right tool when you need someone removed from the organization immediately. Instead, consult your HR representative and/or corporate counsel if you find yourself in a situation where an immediate change is required. 

Step 2: Create the plan

The first real documented step to putting someone on a PIP is to talk with your HR representative about their performance, your prior attempts to provide feedback and coach the employee, and that you believe now is the time to place the team member on a performance improvement plan. 

HR should acknowledge your request and will hopefully provide a template for the PIP that is specific to your organization and approved by the company’s employee relations lawyers. 

Do not write and deliver a PIP without the involvement of your company’s HR representative. If done incorrectly and the employee experiences any harm, you may be personally liable. Consult your company’s HR representative and/or corporate counsel.

If you’re lucky enough to receive a template from your HR representative, start there and do not use alternative templates—always align with your organization.

Talk through the template with your HR representative and ensure you understand what is expected to be documented in each area of the template. Next, it will usually be up to you, the manager, to create the documented plan in the template.

PIP templates typically include the following sections, all of which will require your input as a manager: 

  • Areas of concern—what’s not working, what happened, use metrics and data if possible
  • Observations, previous discussions and counseling: what you’ve seen and done about it so far
  • Expectations or performance goals—what is expected related to the areas of concern and the job role e.g. metrics, behaviors, outcomes, project delivery and more (be specific).
  • Recommended changes—what you expect the employee to change to meet the expectations outlined in the plan and the job role
  • Resources—what is at the employee’s disposal to meet the expectations of the plan and the role
  • Management support—what will you do as a manager to support the employee in their improvement plan
  • Progress checkpoints—when will you and the employee talk about the PIP specifically in the future? How will the employee’s progress be monitored?
  • Timeline and milestones: how long is the PIP, and when will it be over? 30, 60 or 90-days is normal. I prefer 60 days as that’s enough time to see a change but short enough that it doesn’t feel like it goes on forever. 
  • PIP period expectations and consequences—during the PIP timeframe, what are the conduct expectations and consequences during the PIP period? Are they altered? List the consequences (often up to and including termination).
  • Acknowledgement: always have the employee, manager, and HR representative sign the document after it is delivered to the employee. The document is not considered complete and delivered until signatures are received. 

When creating a PIP, be sure to review the job description of the underperforming employee and be sure what it is you are asking them to do is clearly described and they have had enough time in the role to learn how to be successful. You will use the job description in the PIP itself, so keep it handy! 

Consider how the employee is and is not meeting the expectations of their role and reflect to consider if you can identify the root causes of the issue. Be ready to describe the specific areas of their effort and behaviors that contribute positively to effective performance and those that do not. 

Review their most recent performance review and look for specific instances where you previously provided feedback, coaching, or counseling on the issues that have driven you to write a PIP. Consider if the employee’s lack of work performance is measurable and, if so, be sure they’re aware of the measurement. 

Struggling employees are often aware of their underperformance, especially when their manager has been giving feedback along the way. Clear communication around expectations is essential for ensuring a PIP is not a surprise and employees can engage with managers to facilitate an effective performance improvement plan. 

If an employee is surprised or describes feeling blindsided by a PIP, take that as a warning sign and discuss with your HR representative immediately. 

Once you have all of these items reviewed throroghly, document the PIP in a written format. You can try our PIP template as a starting point but, of course, always review with your HR representative and/or corporate counsel. 

Pro Tip: If you’re aware of personal issues occurring with an employee, mention your awareness of these to your HR representative and/or corporate counsel when discussing the PIP.

In some cases, personal issues may place the employee in a protected class which is a consideration when implementing any performance improvement plan or disciplinary action. 

Step 3: Explain the plan to the employee

Once you have authored the PIP, review it with your HR representative, make any required changes or clarifications, and talk through how you and the HR representative will work together to deliver the PIP to the employee live/in-person or on a video call.

In my personal opinion, it's best when you as the manager and author of the PIP present it to the employee with HR’s support and presence throughout the conversation. It’s important that you have HR with you in this conversation as a witness and signal to the employee that this is a serious matter with real consequences.

Oftentimes, just the presence of HR in a conversation about performance will help an employee wake up and see that what they’re doing is not working and they must change. 

You might hear an employee say: “Am I getting fired?” as soon as they see HR in the room. If this happens, calmly respond with “No, we are here to discuss your performance and implement a performance improvement plan.” Plain, simple, and factual answers will be your friend as you progress through the conversation. 

As you begin the conversation, frame the discussion and talk through each element of the document you prepared ahead of time (present a printed copy to everyone present in-person and/or share screen if video call). Stick to the document as best you can. You could almost read through it line-by-line if prepared well. 

By sticking to the document you ensure everything you talk about is documented and the employee can refer to the document later as they recall the conversation and try to process what happened (often it often turns into a blur or fuzzy time because of the body’s natural threat or shock response, so stick to the script!).

As you close the conversation of delivering the PIP, be sure the employee understands they will receive a copy of the document presented and that they’re required to sign the document to acknowledge

  1. They’ve received it
  2. It has been discussed with them
  3. They understand the contents and corrective action required along with acknowledgment of the potential consequences of noncompliance.

Put a due date on the signature, typically less than 3 days. 

You might also consider sending them home or offline for the rest of the day after delivering a PIP as it can be a rather emotional process. 

Step 4: Monitor progress

After you’ve delivered the PIP to the employee, things are sure to feel a little weird, maybe even tense. 

As the employee’s manager, you’re invested in their performance and improvement. Position this to the employee and try to get back to a positive, growth-oriented mindset. 

In my experience, PIPs that are growth-oriented, and where the employee actively engages, are much more successful than those that are ignored for one reason or another. 

The most successful plans I’ve experienced were where the employee reached out to close colleagues or mentors for help in achieving their PIP.

Throughout the PIP duration, regular check-ins between the manager and the employee and the manager and the HR representative are essential elements to facilitating an effective performance management process. 

Be active in measuring and monitoring progress. As a manager, this is not a time to sit back and see if the employee can change, you are required to participate in their growth.

Remember the resources and manager support documented in the plan, it’s your job to be sure you hold up your end of the deal (and yes, there can be legal consequences for failing to do so). 

I suggest committing to reviewing the PIP documentation directly with the employee every 2-weeks, in addition to the (hopefully) weekly one-on-ones you are already holding. 

This allows for some conversations to directly include the PIP and some not. Create a cadence that keeps the employee engaged and thinking about their growth without holding the PIP document over their head in every interaction during the PIP duration. If your document includes specific sign-off of follow-ups, be sure they are documented correctly. 

Pro Tip: As you monitor progress, if things are not changing or you’re seeing a negative change in the employee, call that out. Give feedback fast. Ask the employee how they feel they’re progressing towards the goals of the PIP. Have honest conversations about how it’s going—this will help as you reach the end, especially if consequences are required. 

In some cases, you may experience a curveball where the employee states they simply don’t want to do the PIP or continue in the role.

If this happens, change the tone of the conversation slightly to be more consultative. Acknowledge that the employee is on a PIP with an end date. If the performance goals are not met by the end date, the employee will experience consequences up to and including termination. 

Next, inform your HR representative about the slight shift in events and consult with them on what is best to do next. By taking this course of action, you continue to manage performance and have cause to remove the employee at the end of the PIP, but maybe there’s a better path either within or outside of the organization—partner with HR, they can help.

Related read: Best Remote Employee Monitoring Software Systems

Step 5: Assess options

As you near the end of the PIP period, you and the employee should have a clear understanding as to if the PIP expectations and goals will be met or not. 

If the expectations have been met, then great! Celebrate success and acknowledge the hard work the employee has put into meeting the goals of the PIP. Next, continue on with planning and executing greatness for months and years to come. 

It should be obvious if the goals of the PIP have not been met. As the PIP comes to an end, discuss with the employee that the goals have not been met and that, at the end of the PIP period, a decision about next steps will be made and implemented. 

Prior to the end of the PIP, meet with HR to talk through how it has gone, the coaching and check-ins you have had with the employee along the way, and what you would like to do as an outcome of the PIP. 

If you come to a decision that it’s time to end employment, work with HR to determine how to facilitate the exit.

Typically, a conversation with HR/manager/employee is required to acknowledge that the PIP was not successful and that the employee’s employment has been terminated. At this point, all normal termination procedures should be followed. 

Considerations when developing a performance improvement plan

considerations when developing a performance improvement plan infographic

Navigating employee Performance Improvement Plans can be a complex and intimidating task for both managers and employees.

It's important to ensure that all parties involved are well informed about the expectations, objectives, and rights of the PIP process in order to ensure successful implementation and completion. 

When developing a performance improvement plan, it's important to keep some key details in mind, such as:

  1. Protected classes—ensure that all team members are treated fairly and with respect regardless of race, gender, ethnicity, or any other protected class.
  2. Country laws—abide by the applicable labor laws of your country when creating and implementing PIPs. Consult with your HR representative and/or corporate counsel. 
  3. Discrimination and harassment—ensure that PIPs do not lead to discrimination or harassment of any employees based on their protected classes.
  4. Due process—provide team members with appropriate due process when establishing and evaluating progress towards a PIP's objectives.
  5. Textual documentation—document every stage of the process in writing to ensure there is no misunderstanding between parties involved in the implementation of a PIP.
  6. Specificity—outline every expectation and objective in detail while avoiding ambiguity.
  7. Fairness and consistency—ensure that expectations and objectives are applied fairly across all team members and ate consistently monitored within each department or team.
  8. Rights of appeal—give employees the right to appeal if they disagree with any decisions made regarding their PIPs.
  9. Adaptability—allow for flexibility within the PIPs to accommodate schedule changes or unforeseen circumstances which may arise during the course of completing an employee’s performance improvement plan.
  10. Employee input and feedback—invite feedback from employees during the process of implementing their PIP, as well as after completion to ensure it was effective and achieved desired results.

Use PIPs wisely 

Performance improvement plans can be an effective and efficient means of ensuring workplace goals and expectations are met. 

When utilized correctly, they can help managers and employees both reach their desired outcomes while keeping fairness, consistency, and performance goals aligned and in context with your company culture.

It’s important to keep these details in mind when developing a PIP and ensure all parties involved have the necessary information before implementation. With clear objectives and expectations, navigating PIPS can be a beneficial exercise for everyone involved.

Bonus: Consider this PIP template when starting to think about a PIP. Remember, don’t use this template without consulting your HR representative or corporate counsel. 

Double-Bonus: If you’re an HR professional, there’s a guide for HR’s involvement in PIPs, written by our friends at SHRM. Also check out the short and sweet version with even more resources from SHRM. 

Have you successfully used PIPs in your business? I’d love to hear your tips and tricks, so leave a comment. For regular expert articles and resources to help with employee development, subscribe to People Managing People.

Some further reading: 
By Liz Lockhart

Liz Lockhart is an Operations Leader heading up strategic change, alignment, and growth projects. She holds a Master of Business Administration from the University of Portland (where she now teaches as an Adjunct Professor) and is pursuing a Doctorate in Organizational Change and Leadership at the University of Southern California. Liz is certified as a Senior Professional in Human Resources (SPHR) by HRCI and has 15-years of experience leading people and teams across education, consulting and technology firms. The best place to reach Liz is on LinkedIn.