Performance Improvement Plan: Best Practices and Examples for Employers
UK HR Skills Gaps Survey 2024
When handled correctly, a performance improvement plan (PIP) can turn a tough situation around.
Often underutilised, this performance management tool is actually designed to facilitate change and improve outcomes when applied correctly. In fact, PIPs can be a positive tool and an integral part of your performance and development strategy.
In this blog post, we'll explore what a performance improvement plan is, the benefits of a PIP, and how to implement one in your workplace. We’ll also offer some best practices and examples for getting your PIP right.
What is a PIP?
In the UK, a performance improvement plan, commonly referred to as a PIP, is a formal document and process used by managers to address and improve an employee's underperformance. Think of it as a proactive strategy to guide someone back on track. It's about setting up a structured support system to help them thrive in their role.
It typically outlines specific areas where performance is lacking while setting achievable goals and a timeline for improvement. Remember, a PIP isn’t just a tool for correction but also an opportunity for an employee to better align their efforts with the company's expectations and standards.
Can performance improvement plans really work?
A quick search might reveal that PIPs don’t have the best reputation on the HR block. But this can be a false narrative. When run well, a performance improvement plan can be good for both HR and employees. It establishes clarity and transparency around performance. Rolling out a PIP process can actually help employees feel more clear and comfortable about their goals, even if it’s a little uncomfortable for both parties at first.
After all, more feedback can be a good thing and is something employees are increasingly asking for in the workplace. In fact, receiving inadequate feedback can be one of the leading causes of high turnover.
When Should an Employer Use a PIP?
It can be tricky to know when a performance improvement plan is appropriate to use within performance management. In other words, it should only be deployed in specific situations - not for every mistake or slip-up. A PIP is perfect for when you notice a consistent pattern of underperformance that’s out of character for one of your staff members. Using a PIP to document issues before terminating an employee isn’t its best use.
Here are a few examples of instances when a PIP could be right:
Minimum sales targets consistently missed
Poor quality of work
Regular tardiness or absence
Deadlines are consistently being missed
Complaints or poor feedback from clients or customers
It’s important to keep in mind the nuances. For instance, you need to be able to distinguish between poor performance versus issues around behaviour. It’s much harder to set attainable goals around behaviour (here, a staff hearing might be more appropriate).
In other cases, poor performance could be due to a personal problem. This can affect how an employee ‘shows up’ at work and may not necessarily be about their skills or competency. In this case, an employee may benefit from taking some approved leave. You should also consider providing them with increased mental health support in these instances instead of placing them on a PIP.
Benefits of a Performance Improvement Plan
There are several benefits to implementing a PIP both for you, the employer and your employee:
Clarifies Expectations: A PIP lays out what’s expected in black and white, removing any confusion and aligning your team member’s efforts with company goals.
Professional Growth: It provides a structured way for employees to regain their footing with the support they need to succeed.
Enhances Engagement: Shows employees that the company is invested in their success and willing to spend time and resources on their development.
Prevents Turnover: By working through challenges together, you reduce turnover, saving your company from the high costs of recruitment and training.
Documentation: A well-documented PIP process protects both the employee and the company, ensuring fairness and clarity in how performance issues are handled.
How Should You Roll Out a Performance Improvement Plan?
Implementing a PIP should be done thoughtfully to ensure it is effective. Here are some key steps for HR leaders and managers to consider when setting up a PIP:
Take a step back and evaluate
Before you even get started on putting together a PIP, you need to assess whether or not the situation you’re faced with calls for one. Reflect on wether or not the employee’s underperformance is due to personal problems or if it’s more of a behavioural issue.
Identify the issues at play
It’s important to define exactly where an employee is underperforming. Are they struggling to meet business targets? Are they failing to meet deadlines or turning up late to office days? Start with clear, factual statements of where things are going off track.
Gather data and insights
In order to ensure a smooth process and avoid any hearsay, you’ll want to back up your claim with specific insight and data. Start gathering a record of their performance challenges, including any documents or data to support this. If an employee has received previous warnings, you’ll want to include these in the file as well.
It might also make sense to have a look at their training history. What guidance and support have they received from their manager and their peers?
Remember, this should never be about shaming or making the employee feel guilty. Instead, you should emphasise how valuable and important they are to the business and, therefore, why their potential to perform better matters.
Start developing a plan
Once you’ve gone through these first few steps, you can start to put together a plan. It’s important to bring together both the manager and employees as stakeholders in this process. Make sure their manager is onboard and that you’re aware of their expectations and goals, as this can have a big impact on success.
Use our performance improvement plan template
Collaborate with the employee and their manager to set realistic, measurable goals and the resources available to the employee for support. You can use the following template to outline all of this: PIP template
Background and details
Employee’s name
Job title and description
Responsibilities
Record/history of underperformance (include specific examples, dates and any documents to back this up)
Goals and timeline
Timeline laying out scheduled progress meetings
List of (realistic) and attainable goals with reasonable deadlines (e.g. hitting a certain sales target, improved attendance record, or record of missed deadlines)
An outline of how your company is planning to support (e.g. by providing training courses, coaching, etc.)
The outcome if goals aren’t met (or the plan is not completed)
Review and finalise the plan
Before you send the employee and manager off with this new plan, it’s important to review it from an HR perspective. If you’re an HR manager or leader, then you’ll want to ensure the plan is fair, isn’t biased in any way or hasn’t been developed to intentionally set the employee up to fail. You’ll also want to ensure the employee has all the tools and guidance they need to succeed.
Set a meeting to discuss and kick off the plan
To make sure everyone is aligned and on the same page from the get-go, we recommend setting up a meeting for the employee, manager, and HR representative to review what’s being agreed upon and the timeline for the plan.
While you want to keep the setting of this meeting positive, you also want to establish a safe space that allows either party to be open and honest. Re-emphasise that your role is to encourage and support the employee in order to help them reach their full potential.
Getting feedback and input from your employee is vital at this stage. They should feel comfortable to ask questions and discuss any blockers or problems they might have with the plan.
Feel free to make any final modifications to the plan before asking the manager and employee to sign it.
Execute the plan
Now that the plan is approved, the employee and manager can move on to executing the plan. Be sure to check in from time to time in case either has any questions or concerns along the way.
Schedule a closing meeting
Once the plan has come to an end, it’s time to arrange one final meeting with the employee and their manager. During this, you can review the employee’s progress, and the goals they’ve managed to hit and clarify what comes next.
If the outcome has been positive, and the employee has hit their goals, it’s important to acknowledge this. Appreciation can go a long way in improving overall long-term engagement.
PIP Best Practices
For those involved, initiating a PIP can often feel like a cold corporate move. So let's break down how you can introduce a PIP so it’s effective but fair:
Be clear in defining the issue: It’s hard to improve on something when the goal isn’t clear. Clearly define what the problem is and base the plan on objective performance metrics.
Offer support: It’s important to make the employee feel like they’re set up for success. Provide the necessary tools, training, and advice that the employee needs in order to succeed.
Maintain an open dialogue: During this process, it’s vital to keep lines of communication open and flowing and encourage to honest feedback from both the employee and manager involved.
Focus on the positives: A PIP can be a challenging and sometimes stressful experience both for the employee but also for their direct supervisor. Keep to focus on the plan’s role in personal and professional growth rather than as a disciplinary action.
PIP Examples
Consider these simple examples of how to structure a PIP int he following circumstances.
Example 1: Failing to meet sales targets
An employee in sales has not met their quarterly targets. The PIP could set specific, smaller weekly sales goals, offer additional training in sales techniques, and schedule regular check-ins with a mentor to discuss progress.
Example 2: Providing poor customer service
A staff member is receiving negative feedback on a regular basis from customers who are unhappy with their communication skills, attitude and problem solving. The PIP could set up additional customer service training, role-playing scenarios and a system for collating and reflecting on customer feedback.
Keeps tabs on performance with PayFit
Keeping track of performance and initiating certain processes like a PIP can be a drag when you’re a small business, but with PayFit it’s never been easier.
Create, schedule and run performance campaigns - Firstly, you can keep track of overall employee performance by setting up performance review campaigns. Managers and employees get automatic reminders, so you can make the whole process official.
Use prebuilt and customisable templates - Whether it’s an annual performance appraisal or creating a fully customised PIP plan our templates can flex to your liking.
Run dedicated 1-to-1s for managers and employees - Often, poor performance often comes down to a breakdown in communication. Our 1-to-1 feature makes it easy for employees and managers to schedule regular time for catch-ups so everyone stays aligned.
Book a full product demo to see these features (and more) in action!
