Performance Improvement Plan: Definition and How To

Every employer wants a strong team, but what if an employee is not meeting expectations?

Instead of firing them right away, a Performance Improvement Plan (PIP) provides a clear process to help them improve.

When done properly, a PIP can help both the employee and the company grow.

This article will explain what a PIP is, how to implement it, and the important details employers need to know.

What is a Performance Improvement Plan (PIP)?

A Performance Improvement Plan (PIP) is a formal document that outlines specific areas where an employee’s performance is lacking and provides steps for improvement.

Employers use a PIP when they believe an employee has potential but needs guidance to meet expectations.

A PIP usually includes:

Clear performance expectations that the employee must meet.
A structured plan with measurable goals.
A specific timeline (often 30, 60, or 90 days) to track progress.
Support from the employer, such as training, coaching, or feedback.
Possible consequences if performance does not improve.

A PIP is meant to help employees succeed, not punish them. It gives employees a chance to correct mistakes and improve their skills.

A PIP is useful when:

An employee consistently fails to meet performance goals.
There are frequent mistakes or missed deadlines.
The employee lacks certain skills needed for the job.
There are behavioral concerns, such as frequent absences.
An employee fails to meet company standards despite multiple warnings.

If the problem is due to a temporary issue, such as a personal crisis, offering support without a formal PIP may be a better option.

Why is a PIP Important?

A PIP benefits both employees and employers. Instead of immediately firing an employee, a PIP gives them a chance to improve while ensuring that employers have a fair and documented process.

It can improve trust between employers and employees and create a positive work culture.

For Employers

Creates a structured way to handle performance issues.
Provides legal protection if termination becomes necessary.
Encourages fairness and transparency, reducing bias.
Helps retain employees, reducing hiring and training costs.
Boosts workplace morale, as employees feel supported.

For Employees

Gives clear guidance on how to improve.
Provides training and support to help them succeed.
Encourages open communication with managers.
Offers a second chance to meet job expectations.

Components of a Performance Improvement Plan

A good PIP should be detailed, specific, and easy to follow. It should set clear expectations while offering realistic goals and support.

Clear objectives and performance expectations

Employers must define what success looks like.

For example, if an employee struggles with meeting sales targets, the PIP should specify the exact sales numbers they need to achieve.

Specific action plans and support measures

Employers should outline how they will help the employee, such as extra training, mentorship, or coaching.

Timeframes for achieving goals

PIPs usually last 30, 60, or 90 days. This should be enough time for improvement but not so long that it drags on.

Scheduled progress meetings help employees stay on track and allow managers to provide ongoing feedback.

Consequences of failing to meet the improvement targets

Employers should clarify what will happen if the employee does not improve, such as reassignment, further training, or termination.

How to Develop a PIP

To make a PIP effective, employers should follow a structured approach.

Assessing the employee's current performance

Before writing a PIP, managers must assess the situation carefully. Questions to ask:

Is the performance issue documented?
Has the employee received proper training?
Are there external factors affecting performance?
Can the issue be fixed through coaching and training?

If the issue is serious misconduct or a policy violation, a PIP may not be the right solution.

Identifying specific areas for improvement

Employers must clearly define what specific areas the employee needs to improve.

Vague feedback such as "Work harder" is not helpful. Instead, be specific:

"Increase sales from RM10,000 to RM20,000 per month."
"Submit reports without errors and on time for three months."
"Increase social media views to 15 million views in a month"

Setting measurable and achievable goals

A PIP should be fair and achievable. The improvement goals should match the job role and be measurable.

If the goals are unrealistic, the PIP will be unfair and ineffective.

Including employee feedback during the planning process

Employees should participate in their Performance Improvement Plan (PIP). Employers must discuss the plan with the employee and encourage their feedback.

This involvement fosters ownership and accountability.

Implementing a PIP: Steps for Employers

A PIP is only useful if it is implemented correctly. Here’s how employers can do it effectively:

1. Conducting a formal meeting to discuss the PIP

Schedule a private meeting with the employee to go over the PIP in detail.

During this meeting, the manager should clearly explain the reasons for the PIP, outlining the performance issues, specific goals, and expectations for improvement.

Present the PIP as a developmental tool rather than a punishment. This allows the employee to express their concerns or ask questions.

The employee should leave this meeting with a clear understanding of the objectives, timeline, and consequences of not meeting the improvement targets.

2. Providing ongoing support and resources to the employee

After discussing the PIP, employers need to actively support the employee in meeting the required performance standards.

This may include providing additional training, adjusting workloads, assigning a mentor, or offering extra resources to help the employee succeed.

The goal is to give the employees the necessary tools and guidance so they can focus on improvement.

Managers should also be available for regular check-ins and open discussions, encouraging employees to share any challenges they face.

A PIP is most effective when employees feel supported rather than isolated throughout the process.

3. Regularly reviewing progress and offering constructive feedback

Consistent monitoring is crucial to the success of a PIP.

Employers should schedule weekly or bi-weekly review meetings to evaluate the employee’s progress against the outlined goals.

These meetings serve as opportunities to provide constructive feedback, highlight improvements, and address any areas that still need work.

Documenting these sessions ensures that both the employer and employee have a clear record of the progress made and any challenges encountered.

If the employee is struggling, adjustments can be made to the plan, such as offering additional support or extending deadlines if necessary.

The goal is to keep the employee motivated while maintaining accountability.

How to Monitor and Evaluate Progress

Monitoring and evaluating progress during a Performance Improvement Plan (PIP) is essential to determine whether the employee is making improvements and meeting the required goals.

Below are the key steps to effectively monitor and evaluate a PIP.

Setting check-ins and evaluation milestones

Regular check-ins should be scheduled throughout the PIP period to assess how well the employee is progressing.

These meetings allow both the employer and employee to review completed tasks, discuss challenges, and make adjustments if necessary.

Employers should set clear evaluation milestones, such as weekly or bi-weekly reviews, to measure progress in smaller, manageable steps.

Tracking performance metrics aligned with the PIP goals

To measure improvement objectively, employers should track specific performance metrics related to the PIP goals.

This could include sales numbers, work accuracy, deadlines met, or any other relevant benchmarks.

By comparing current performance against these predefined targets, employers can identify areas of improvement and those that still need work.

Using data-driven assessments removes subjectivity and helps make fair evaluations.

Documenting progress and challenges throughout the process

Keeping a detailed record of all PIP-related discussions, evaluations, and feedback sessions is essential for transparency and accountability.

Employers should document both positive improvements and ongoing issues, as this will serve as proof of the employee’s efforts and progress.

This documentation can also help in decision-making at the end of the PIP, whether it results in the employee successfully completing the plan or facing further action.

What Happens After a PIP?

After the PIP period, employers must review the results and decide what happens next.

They need to handle the post-PIP phase carefully to maintain fairness, document decisions, and take appropriate action.

The outcome of a PIP depends on whether the employee meets the set expectations.

1. If the employee meets the goals:

The PIP is closed, and the employee returns to normal performance reviews. Employers should recognize the improvement and set long-term expectations.

2. If some progress is made but goals are not fully met:

The PIP may be extended with additional support. Assess whether modifications, such as additional training or mentorship, are needed to help the employee improve.

3. If the employee fails to improve:

Employers may need to reassign, demote, or terminate the employee. The documentation from the PIP process will support any termination decision.

FAQ

Should I quit if I get a PIP?

Not necessarily. A PIP is an opportunity for improvement, not an automatic termination. Employees should try to meet the expectations outlined in the PIP.

Is a PIP a warning?

A PIP is more than a warning—it is a structured plan that provides employees with the chance to improve.

Should I accept PIP or resign?

Employees should discuss the PIP with their manager to understand expectations.

If the PIP seems fair and achievable, working through it is the best option. If it seems unfair, seeking HR support or legal advice may help.

What does PIP mean?

A PIP (Performance Improvement Plan) is a structured plan used by employers to help employees improve their performance.

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