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How to Improve Work Performance With a Performance Improvement Plan (Plus PIP Templates)

Marisa Sanfilippo
Marisa Sanfilippo
at Fortune Web Marketing

A lot can be gained by giving struggling employees a clear path to improvement with a performance improvement plan.

Not every business is going to be filled with star employees who always meet or exceed all of the expectations placed on them. For employees who don't fall into that category, the responsibility of helping them boost their performance often falls on their managers.

A popular tool to set them on the right path is a performance improvement plan. This document sets expectations with the goal of helping the employee improve their performance. To get the most out of a performance improvement plan, managers need to have a clear understanding of what it is, what to include in it and how to develop it.

What is a performance improvement plan?

A performance improvement plan, or PIP for short, is a document created by a supervisor or manager that outlines what employees can do to achieve their performance goals. In many instances, these plans are meant for struggling employees, though they can be used for employees who are already doing an excellent job but have opportunities to grow.

 The document outlines the following:

  • The expected behavior and an objective or two

  • Resources available to achieve those goals

  • A timeline for improving performance (or, in the case of employees who are not struggling, the timeline to reach additional goals)

Since performance improvement plans can have a negative connotation, many human resources professionals have long believed that they were best implemented when employees' struggles became noticeable and action was needed to correct unsatisfactory performance.

However, as the workplace continues to evolve, some HR professionals are changing their tune. Seeing the benefit performance improvement plans can have on employees who are already doing an excellent job and have the potential for even better performance, these plans are no longer being used just for struggling employees.

"Employees who hear 'performance improvement' may assume that something isn't right or there are dire consequences as a result of being placed on a PIP," said Leanne E. King, president and CEO of SeeKing HR. "This is truly a negative reaction to what is often an attempt to correct or redirect the behaviors of an employee."

This is why King added that the preferred term is "development plan" for employees who are doing well and ready for a new assignment or responsibility.

"The catch is in the culture of the organization," King said. "It's all in how the process is communicated with employees. Using a single-document performance plan with a check box for improvement and development gives employees a better indication of what may be the next steps, step up or step out."

How a performance improvement plan works in 5 simple steps

Traditionally, a performance improvement plan follows a series of five steps:

  1. Determination of needs: The supervisor works on their own or with a member of the HR team to determine where the employee needs to improve.

  2. PIP write-up: The supervisor outlines these improvements in a templated PIP form.

  3. Formal meeting: The supervisor holds a formal performance review meeting with the employee to explain the document.

  4. Questions: The supervisor gives the employee time to ask any applicable questions to ensure they are on the same page.

  5. Signoff: The supervisor and employee sign the document as an acknowledgment that it was received, discussed and understood.

What are the benefits of performance improvement plans?

A performance improvement plan, or a development plan, can be beneficial for employers and employees. As an employer, you want to get the best from your employees. After all, higher-achieving employees can equate to a higher return on your business investment.

Simply telling employees they need to do better usually won't have the desired result. Instead of sending these underperforming employees off on their own to figure it out, managers need to be proactive by clearly identifying areas for improvement and laying out a path forward for the struggling team member.

At the other end of the spectrum, identify your high performers and set benchmarks for them as well.

"Research shows that significant value for the company can be easily generated by benchmarking the top performers in a structured way, seeing how they operate, and then building those outcomes, tasks, decisions, and methodologies into how everyone else can improve themselves," said Josh Rovner, an author and consultant in the space of building effective organizations. "This is how you can create and use a performance improvement plan for everyone in the company, not just the underperformers."

These are some additional benefits of offering performance improvement plans:

It helps employees take responsibility.

If staff members are not aware of how management sees performance, they can't take responsibility for it. A performance improvement plan equips team members with the information they need to take responsibility for their performance and work toward improving it.

It can increase staff retention.

As job roles evolve, your staff may not be aware of how their role affects the company or if it even matters. When employees know exactly what is expected of them, it can empower them by showing them they make a difference and give them goals to work toward, which can help you retain otherwise bored and unmotivated staff.

Feedback is valuable.

Offering a documented understanding of how employees are doing and where they can improve helps them feel engaged and improve within areas they may not have realized they were lacking in.

It removes the element of surprise.

If an employee ultimately needs to be terminated for poor performance, the process might be easier for both parties when the performance issues have been documented through a performance improvement plan. Workers who are terminated will already know their employers' expectations and have some warning of what's coming when they see they aren't hitting their goals. [Read related article: How to Fire an Employee the Right Way]

How to develop a performance improvement plan process and what to include

Developing and writing a performance improvement plan is a straightforward process.

Step 1: Identify if a PIP is needed.

Sometimes, having an informal conversation with a subordinate or documenting an issue by email is enough to improve performance. An example of when a PIP might be needed is with a sales agent who isn't meeting their sales quotas. If a PIP is needed, move on to step two.

Step 2: Focus on behaviors.

Outline the behaviors that need to improve and get to the root cause of the issue. These are some examples of actionable goals:

  • For a sales professional, it might be to make 50 sales phone calls a day.

  • For a customer service representative, it could be to address 95% of customers by their first name for two weeks straight to improve relationships.

  • For a marketing specialist, it might be to respond to all Facebook messages within 48 hours.

Step 3: Provide proof with specific examples.

If you don't have specific examples of the problem to give the employee, hold off on submitting the performance improvement plan and start documenting them as you see them. Provide as much detail as possible in the examples. Outlining specific examples with dates is the best way to avoid legal issues.

Step 4: List your expectations.

As part of the performance improvement process, specify your expectations in the areas where the staff member needs to improve. Expectations are different from job duties; do not pull these expectations from the employee's job description. Instead, as noted by Winston-Salem State University, "the basis of an effective performance plan is developing and communicating clearly defined performance expectations to assist the staff member in understanding how the duties and responsibilities should be performed. Performance expectations should focus on end results, not just activities." [Read related article: Setting Clear Expectations for Employees]

Step 5: Offer resources.

Expecting workers to improve on their own is not always realistic, especially if they have been struggling for a while and clearly aren't sure where to turn for help. Offering resources can put a positive spin on the performance improvement discussion and give employees a way to succeed. These are some examples of resources you could include in the performance improvement plan:

  • Connect them with other staff members whom they can lean on for guidance.

  • Give them access to an online course they can take to improve their skills.

  • Give them a book they can read to learn something new about their position's subject matter.

Step 6: Create a timeline.

A defined timeline can help team members achieve their goals in a reasonable time frame and track their progress. A typical timeline for performance improvement is 30, 60 or 90 days. Your timeline should provide structure and offer realistic, achievable goals.

Step 7: Sign off on it.

Your performance improvement document should conclude with a place for all parties involved to date and sign.

Free performance improvement templates

You can find a wide selection of templates online to help you develop your PIP. These are some free templates to guide you in laying out the PIP:

Image Credit: fizkes / Getty Images
Marisa Sanfilippo
Marisa Sanfilippo
business.com Contributing Writer
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Marisa is an award-winning marketing professional and contributing writer. She has worked with businesses large and small to help them drive revenue through integrated marketing campaigns and enjoys sharing her expertise with our audience.