What is a PIP at Work? Definition, How To, and Tips

When an employee isn’t meeting expectations, it’s never an easy situation for them or the company. But instead of jumping straight to termination or harsh warnings, there’s a better way to manage underperformance, which is a Performance Improvement Plan, or PIP.

How to structure and implement a PIP can be the difference between a recovering employee and a disruptive exit. A well-crafted PIP not only supports your workforce but also protects the company from legal risks and keeps documentation clear.

What is a Performance Improvement Plan (PIP)?

A Performance Improvement Plan (PIP) is a formal document created by employers to help employees improve their job performance. It outlines areas of concern, sets measurable goals, provides a support structure, and tracks progress within a specific timeline (usually 30, 60, or 90 days).

PIPs are often used when an employee is struggling to meet key performance indicators (KPIs), failing to deliver consistent results, or displaying workplace behaviours that affect team productivity. It’s important to note that a PIP is not a punishment. It’s a structured effort to give the employee a clear path to success before making any termination decisions.

Purpose of Implementing a PIP

At its core, a PIP is designed to help both the employee and the employer. It gives employees a fair chance to improve by identifying clear expectations and offering targeted support. Employers can reduces legal risks by documenting the performance process and showing that reasonable steps were taken before disciplinary action.

A PIP can also provide transparency during exit situations and serve as evidence if the company is ever challenged on termination decisions. When used correctly, it becomes a valuable HR tool to improve individual accountability and support growth.

When Should a PIP Be Used?

You don’t issue a PIP just because of one bad week. PIPs are typically introduced when underperformance has been ongoing and informal coaching or feedback hasn’t helped.

Some common triggers include:

Repeated failure to meet KPIs or work deliverables.
Quality issues that affect clients or internal teams.
Negative behaviour that disrupts the workplace environment.
Lack of progress in a new role after a reasonable adjustment period.

Before jumping into a PIP, managers should rule out external factors like unclear instructions, lack of training, or personal challenges affecting performance.

What Should a PIP Include?

A good PIP includes clear and trackable information. At minimum, it should contain:

Employee details: Name, job title, department, and reporting manager.
Performance concerns: Specific tasks or behaviours that are falling short.
Improvement goals: What exactly the employee is expected to achieve, with timelines.
Support and resources: Any training, mentorship, or tools the company will provide.
Follow-up schedule: Weekly or bi-weekly check-ins to monitor progress.
Consequences: What will happen if improvements are not made (e.g. termination, demotion, reassignment).

All of this should be documented and signed by both the employee and their supervisor to show mutual understanding.

How to Create a PIP for Employees in Malaysia

Start by sitting down with the employee for an open and honest discussion. Tell them where they’re falling short, but frame it in a way that invites improvement rather than fear.

Then:

Identify the performance gaps using data and direct examples.
Set measurable and time-bound goals. For example, “Improve call resolution rate to 80% within 30 days.”
Create a realistic timeline, usually 30, 60, or 90 days depending on the issue.
Offer support such as mentoring, additional resources, or technical training.
Monitor progress regularly. Schedule check-ins to review goals and provide feedback.

Throughout the process, maintain documentation for all meetings and updates. If the employee improves, celebrate that success. If not, follow the appropriate next steps outlined in the PIP.

Tips for Employers to Implement a PIP Effectively

Implement these tips below to make the PIP smooth and not negatively impact to both employee and you as employers:

Be specific about what needs to improve. Vague goals like “be better at teamwork” won’t help.
Keep your communication objective and supportive, not punitive.
Include HR in the planning and review process to avoid bias or legal missteps.
Stick to the timeline and document everything. This helps if the situation escalates.
Respect confidentiality. Discussions and records around the PIP should be limited to authorised personnel only.

What Happens After the PIP Ends?

There are typically three outcomes:

The employee meets the targets. They return to their role without further action.
There’s some progress, but not enough. You might extend the PIP or revise the goals.
No improvement is shown. The company can proceed with termination or demotion based on the documented process.

Always wrap up the PIP with a final meeting to discuss the results and next steps.

FAQs

Is PIP the same as a warning letter?

No. A warning letter is a disciplinary action. A PIP is more of a structured coaching tool.

Can a PIP lead to termination?

Yes, if the employee fails to improve after the agreed period and support has been given.

How long should a PIP last?

Most PIPs run for 30 to 90 days, depending on the complexity of the job and the performance issues.

Can an employee refuse to sign the PIP?

They can, but the refusal should be documented. You can proceed with the PIP regardless.

What industries in Malaysia commonly use PIP?

PIPs are used in both white-collar and blue-collar sectors, especially in banking, tech, manufacturing, and retail.

Can probationary employees be put on PIP?

Yes, especially if they are underperforming and still within their trial period.

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