Navigating Performance Challenges: When to Implement a Performance Improvement Plan

When a worker keeps having problems doing their job well, you may consider creating a Performance Improvement Plan (PIP). Also called a performance action plan, employers often use PIP to help employees who are not doing well figure out what they need to improve and stay in good standing with the company.

Now, it is time for you to explore when to start helping employees improve their performance.

What Is a Performance Improvement Plan?

A performance improvement plan is a structured guide that points out where an employee is not doing well at work and suggests ways to get better.

Simply put, when someone is not doing their job well, a PIP (Performance Improvement Plan) tells them exactly what they need to work on—such as being more productive or improving certain skills. The plan sets specific goals and deadlines for them to meet. PIP helps the employee do better overall, whether that means boosting performance, learning new skills, or improving behavior. But, when the employee does not achieve the goals in the given time, it can lead to profound consequences, even losing the job.

Companies typically use PIPs for employees who are not performing well, but they utilize them for individuals aiming for a promotion as well. In such cases, a PIP offers clear steps to help these employees reach their goals.

When Is a Performance Improvement Plan Needed?

When an employee is not performing well but has the potential to improve, a performance improvement plan (PIP) becomes necessary. Think of it like a roadmap for improvement, as it establishes clear and achievable goals for the employee to follow.

Common situations where a performance improvement plan can be helpful include:

• Poor sales or results: Employee is not meeting targets.
• Mediocre quality of work: The work produced is not up to the required standards.
• Consistent tardiness or absences: Employee is frequently late or absent.
• Low productivity and missed deadlines: Tasks are not completed on time.
• Poor client/customer feedback: Negative feedback from clients or customers.

But a performance improvement plan may not be the best solution for issues related to behavior or conduct, such as insubordination or harassment, as it is challenging to set specific goals for such issues. In these cases, other approaches such as disciplinary meetings or verbal warnings may be more appropriate.

To add, when the performance issue is due to personal problems affecting the employee, rather than a skills or training issue, they can benefit more from approved leave or increased mental health support rather than a performance improvement plan.

Benefits of a Performance Improvement Plan

• Promotes a Positive Company Culture

A performance improvement plan (PIP) helps create a positive company culture by making expectations clear and holding employees accountable for their performance. Knowing they have support when facing challenges or needing guidance fosters a positive work environment. PIPs focus on improvement rather than criticism, reducing defensive reactions from employees.

• Helps Employees Feel Cared For

Managers invest time in preparing a PIP and outlining areas for improvement demonstrating care and support for their employees. The plan signals that managers are willing to provide direct feedback and guidance, showing a commitment to helping employees grow.

• Saves Time and Resources

Implementing a performance improvement plan saves time and resources compared to the hiring and onboarding process of a new employee. Instead of terminating underperforming employees, offering them a chance to improve is more cost-effective. This is particularly true when an employee possesses strong soft skills and needs assistance with specific job-related skills.

Disadvantages of Using a Performance Improvement Plan

• Time and Effort Intensive

Crafting individualized performance improvement plans (PIPs) requires time and effort since there is no one-size-fits-all solution. While worthwhile when used correctly, a poorly designed or misapplied plan can be a drain on time and resources.

• Potential Workflow Distractions

PIPs may divert attention from regular work tasks. But the long-term benefits of improving performance and aligning employee understanding with management expectations can significantly enhance overall productivity.

• Uncomfortable Performance Conversations

Discussing performance issues can be uncomfortable. HR plays a crucial role by setting clear expectations for what a PIP is meant to achieve in a positive light. Providing managers with the right tools and talking points is essential for guiding the process effectively. Success hinges on consistent follow-through and support for employees under review.

• Negative Perceptions Based on Past Experiences

When employees find themselves on a performance improvement plan (PIP), they may see it as a sign that their job is at risk, leading to a negative atmosphere. This perception makes it difficult for them to accept feedback and may turn the situation adversarial. To avoid this, it is important to frame PIPs within a culture of self-improvement. Doing so is crucial for shaping a positive view among employees.

How to Create a Performance Improvement Plan (PIP)

Creating a performance improvement plan does not need to be complicated. Follow these five steps to establish an effective PIP:

• Assess Appropriateness

Evaluate whether a Performance Improvement Plan (PIP) is the right solution for the situation. For severe issues like creating a toxic work environment, termination may be necessary, while minor challenges can be addressed through informal conversations.

• Develop a Plan

Before crafting the PIP, a manager must create a plan outlining the key elements. What constitutes a successful PIP? What does success look like for the employee? How will the employee perceive and respond to the plan? Addressing these questions is crucial. Managers must check whether the company has used PIPs before and develop an implementation strategy.

Discussing the plan with the HR department is beneficial. HR may provide sample PIPs as templates and offer guidance on creation and implementation. They can maintain copies of the PIP as well and track progress.

• Set Clear Goals and Expectations

Define specific goals and expectations in the PIP. Be clear about what success means and establish a timeframe for improvement—usually within 30 to 120 days (about 4 months), depending on the role.

• Communicate the Plan

Schedule a meeting with the employee to discuss the PIP. Communicate the identified areas for improvement, the set goals, and the period. Ensure the employee understands the plan's purpose is to support their development.

• Provide Support and Monitor Progress

Offer necessary support for the employee to achieve the goals outlined in the PIP. Regularly monitor progress and schedule follow-up meetings to discuss advancements and address any challenges. Adjustments to the plan may be needed based on feedback and evolving circumstances.

In conclusion, performance improvement plans can serve as a powerful management tool when employed appropriately and in suitable circumstances. Typically utilized by businesses, these plans aim to communicate to employees that their performance falls below role expectations, offering a structured pathway for improvement. For employers, PIPs play a crucial role in retaining valuable workers, while employees benefit by gaining insights into their shortcomings within the role and an opportunity to overcome them. When implemented correctly, performance improvement plans can contribute to a positive and constructive approach to professional development and workplace success.