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How To Create A Performance Improvement Plan (PIP)

Why would a Manager/Supervisor consider a Performance Improvement Plan?

A Performance Improvement Plan can provide clear expectations for improvement and consequences if the employee does not meet the performance expectations required for the position they fill. For example, if an employee received a poor performance review or struggles to meet expectations for their role, an employer may want to provide clear criteria for improvement. On the other side, if an employee is seeking a promotion, a performance improvement plan can provide benchmarks for advancement.


What is a Performance Improvement Plan?

A Performance Improvement Plan is a written document that identifies how an employee is falling short of what needs to be done to improve (and stay employed). This PIP can be administered to any employee, at any time, when necessary. The PIP may refer to specific skills that are standard or even “soft skills”, such as leadership and professionalism. Additionally, a PIP may also be used if the employee is performing well but wants to advance to a new position, giving guidelines on how to reach that goal. The employee’s supervisor typically prepares the Performance Improvement Plan and submits it to HR. It should include timelines for meeting the expectations and next steps if the employee doesn’t meet the standards.


What are the benefits of a Performance Improvement plan?

  1. It promotes a positive company culture. When presenting a Performance Improvement Plan it is important to focus on the positive and what it takes to improve, rather than criticizing the negative.

  2. A PIP can help employees feel cared for. When managers take the time to prepare a PIP and outline the specific area for improvement or steps for advancement, employees feel cared for and supported. In addition, the PIP shows employees that managers are willing to take the time necessary to provide direct feedback and guidance instead of leaving it to the employee to draw their own conclusions.

  3. It saves Time and Resources. It takes time and money to go through the hiring process and on-boarding of a new employee. For this reason, employers may want to offer under-performing employees a chance to improve performance rather than terminating them. This can be especially true if the employee has strong “soft skills” such as friendliness, patience and a good attitude – but needs help with specific work-related skills, such as learning to use new technology.

What are the downsides of a Performance Improvement Plan?

  1. A PIP should include conversations and these conversations can be hard Writing the PIP and handing it to the employee isn’t enough. Managers should discuss the PIP with the employee and answer any questions and address any concerns. Unfortunately, PIP conversations are often complicated and even when the PIP takes a positive tone (which they should as often as possible) it can be hard to give and receive feedback.

  2. The PIP Might be Misinterpreted. Even if the Manager clearly explains the reasons for the PIP, whether it’s because the employee is struggling or wants to advance, there is a risk that the employee will misinterpret the PIP as a sign that termination is on the horizon. Be clear about the intent!!!

How do you Create a Performance Improvement Plan?

The process of creating a PIP does not have to be complicated. In short, start by first determining whether a PIP is the best course of action for your employee and business.

  1. Determine if the PIP is Appropriate. If, for example an employee is creating a toxic work environment and negatively affecting other employees, termination may be necessary. On the other hand, if an employee’s challenges are relatively minor, an informal conversation may be more appropriate.

  2. Come up With a Plan. The manager should consider what would a successful PIP include. How will the employee interpret and respond to the PIP? The manager should consider these questions. Once you have a plan the PIP should be discussed with the company’s HR department or whoever oversees employee relations.

  3. Meet With the Employee in Question. Now it is time for a conversation. Without a conversation an employee can easily misinterpret a PIP or make misassumptions. By having a conversation, the manager can provide context for the improvements outlined and answer any questions the employee might have.

  4. Monitor Employee Progress. A PIP is only as good as its accountability. If the improvements and consequences of the plan aren’t followed, it defeats the purpose and tells employees that they don’t need to take PIPs seriously. Including a timeline is critical in monitoring progress.

  5. Access Your employee. If the employee fails to meet the criteria listed in the PIP the manager will need to decide on the next steps. Ideally, the PIP should include a range of consequences, so there is some level of flexibility. Ultimately, the manager will need to decide whether it is worth the time and effort to keep working with the employee.

Performance Improvement Plans can be an effective management tool if they are used in the right way and under the right circumstances. They should be used as a tool to help staff understand that they are not meeting the expectations of the role and are now being given the opportunity to Improve. The PIP also helps in documenting the fact that this employee was given every opportunity to grow and succeed in the company before possibly needing to terminate their employment.


In the end the PIP provides the opportunity for employees to understand and overcome shortcomings within their role.

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