What is a performance improvement plan?

A performance improvement plan (PIP), sometimes called an employee performance action plan, documents areas in which an employee needs to improve and steps they must take in order to reach the employer’s standard of performance. These plans occur over a set period of time, usually 30, 60, or 90 days. A performance improvement plan can be used to document the consequences if an employee does not improve their performance to the level their employer requires.

Performance improvement plans are also sometimes used to help structure an employee’s growth and development toward a higher level of employment or a move into a different department. When used this way, a performance improvement plan can also help the employee decide whether they wish to pursue the new role they are considering.

How do you know when to use a performance improvement plan?

Performance improvement plans usually follow a pattern of substandard performance or documented instances of performance issues that you have already addressed with the employee. Sometimes, other measures are more effective to address infrequent or one-time performance issues. Performance improvement plans also usually follow an offer of reasonable accommodation and training by the employer.

It is also important to consider whether a PIP will be effective for a particular kind of performance problem. Because they are a structured document, performance improvement plans tend to work best for issues that are measurable. Examples include challenges with productivity, attendance and timeliness, and goal achievement.

What elements should a performance improvement plan include?

A good performance improvement plan usually includes the following elements:

Explanation of requirement

This section addresses the company’s standards of performance. It also usually explains any results a company might face as a result of underperformance. This section provides important context for the rest of the document.

Problem identification

This section explains ways the employee’s performance doesn’t meet the organization’s requirements. If the PIP is being used to help an employee reach a higher level, it might also describe the difference between the level of an employee’s current work and the new role requires. This explanation usually includes evidence and documentation.

Measurable objectives

This section lists steps the employee should use to improve their performance. These objectives are most effective when they are measurable, so that the employer and employee can compare results before and after implementing the PIP. This section also usually includes an overview of employer resources, such as training opportunities.

Clear schedule

This section outlines the length of time during which the employee can work to improve their performance. A review of improvements made during this time follows the original assessment. The schedule section of a PIP might also include scheduled one-on-one meetings or supervisor check-ins during the allotted time, besides other benchmarks for increased productivity or performance.

Results and consequences

This section explains the consequences that will occur if the employee’s performance doesn’t meet expectations within the allotted time. This might include disciplinary action. Consequences for performance issues at the end of a PIP are sometimes determined at the organizational level or sometimes particular to each PIP.

How to create a performance improvement plan

If you notice that an employee’s performance is posing challenges for your business, consider implementing a performance improvement plan. Try using these steps to create a PIP for your situation:

1. Consider the circumstances

Before implementing a performance improvement plan, consider the relevant details. Notice whether the employee in question has shown consistent performance issues or if they’ve encountered a one-time challenge. Determine whether you’ve provided appropriate accommodations and training that might alleviate the performance issues without needing a PIP. Be sure to document the performance issues you’ve noticed as well, to establish a pattern that justifies a PIP.

2. Document basic information

Next, record the basic information relevant to the employee, employer, and circumstances. This includes the employee’s name, your name, the date, and the subject of the document. Some businesses use a standard template to make this part of the process more efficient. Including basic information can prove important later for enforcement purposes. This information can also remind the employee who to approach with questions regarding their performance improvement plan.

3. Explain the company’s standards

Outline the company’s expectations for employee performance. Usually, this serves as a reminder of information that you have already communicated to the employee. Refer to documents such as the company’s goals, objectives, and mission. Describe the relationship between these objectives and employee performance.

4. Describe the concerns

Next, explain the ways the employee has shown underperformance. Refer to your notes from documenting their pattern of underperformance. Mention specific conversations such as coaching and mentoring sessions in which you previously addressed your concerns, as well as any other resources and training you’ve offered them.

5. Identify goals

Detail the level of performance required to meet the company’s standards. Be sure these objectives are measurable so you can compare outcomes at the end of the PIP to the employee’s performance beforehand. Try using the SMART goal framework to establish goals that are specific, measurable, attainable, relevant, and time-based.

6. Determine a time frame

Based on the improvements needed and the company’s priorities, determine a reasonable time frame for the employee to achieve their performance goals. Many businesses use 30, 60, and 90-day periods for their performance improvement plans. Outline the action that will occur at the end of that time, such as a meeting or review.

7. Outline resources

Explain any additional resources you’ll provide the employee to help them reach the performance goals outlined in their PIP. This might include training materials and coaching relevant to their performance challenges. These resources may include internal or external content. Include any specific details the employee might need to access the listed resources while working through their PIP.

8. Explain consequences

Clarify the outcomes that will occur if the employee’s performance doesn’t improve to the standard indicated in the PIP. Be sure to communicate these consequences clearly. Doing so can make the PIP process more efficient and might also help motivate the employee under PIP. Documenting the consequences of underperformance following the performance improvement plan can also make it easier to implement those results if necessary.

9. Remember signatures

When you discuss the performance improvement plan with the employee, it’s important for both parties to understand the plan correctly. For this reason, make sure you both sign the document to indicate that you’ve conferred and understand the terms. Remember to leave space for signatures at the end of your PIP document.

10. Revise and edit

Finally, review the performance improvement plan and make any changes necessary. Edit carefully to ensure the document is free of errors in grammar, usage and mechanics. Consider asking another individual to review the document and suggest changes if necessary. If you ask someone else to help revise the performance improvement plan, be sure to choose someone in an appropriate role to help preserve the employee’s privacy.

Performance improvement plan example

Some companies choose to use a standard template for performance improvement plans. Others use a customized document for each PIP they administer. If you’d like to implement a standard PIP, or if you’d like help structuring your own, here is an example you can use for guidance:

[Employee name]
[Employee title and department]
[Employer name/department contact]
[Date]

Explanation of Improvement Plan

This Performance Improvement Plan (PIP) is intended to address issues in the performance of your work duties. This document will clarify the expectations of your role, resources available to help you meet them, and consequences in the event of continued performance problems. Addressing these issues will allow you to remain in good standing at [company.] Note that our mission is to [company objectives]. Employee underperformance can [explain broad effects of underperformance].

Improvement Plan Details

Here are areas in which we’ve observed performance issues, and the dates when your supervisor discussed those challenges with you:

• [Performance issue #1, with explanation and attempt to address]
• [Performance issue #2, with explanation and attempt to address]
• [Performance issue #3, with explanation and attempt to address]
• (Include as many examples as necessary or relevant)

Performance Improvement Plan Goals

At this time, you must accomplish the following goals in order to remain in good standing with [company] within [timeline]:

• First specific improvement goal
• Second specific improvement goal
• Third specific improvement goal
• (include as many as needed and relevant to meet company standard)

Resources To Improve Performance

To support you in reaching these performance goals, [company] will provide the following resources:

• Resource #1
• Resources #2
• Resource #3
• (Include as many as necessary and helpful to improve employee performance)

Consequences for Continued Performance Problems

Employee underperformance can affect our company by [reiterate effects of employee underperformance]. As a result, we must take action if the above goals aren’t met within [specified time frame]. Consequences for continued performance issues will be:

• Consequence #1
• Consequence #2
• Consequence #3
• (include as many as relevant for the circumstances)
  

Employee signature
[space for employee to sign]
Date
[space for today’s date]

Employer signature
[space for employer to sign]
Date
[space for today’s date]

Performance Improvement Plan Templates for PDF & Word

Use these performance improvement plan templates to document areas for improvement and steps your employees must take to be successful.

*Indeed provides these examples as a courtesy to users of this site. Please note that we are not your HR or legal adviser, and none of these documents reflect current labor or employment regulations.