What is a performance improvement plan?

A performance improvement plan, or PIP, is a positive tool that guides employees toward meeting their performance expectations. It typically outlines specific areas for improvement, measurable goals, available resources and timelines for achieving results.

PIPs help employees understand expectations clearly, track their progress and receive supervisor support. They also provide a consistent approach for employers to monitor performance and encourage professional growth.

When may employers use a performance improvement plan?

Performance improvement plans often address patterns of substandard work or documented performance issues you have previously discussed with the employee. Performance improvement plans are particularly beneficial for managing underperforming employees and providing them with structured support to help them meet expectations.

Sometimes, other measures, such as flexible work arrangements, may be more effective to address infrequent or one-time performance issues. Performance improvement plans also typically follow an employer’s reasonable accommodation offer and ongoing coaching.

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

Key components of a performance improvement plan

A well-structured performance improvement plan generally includes these components:

Explain your expectations

This section clarifies the company’s performance standards and supervisor expectations. It may also describe organizational results related to achieving goals. Clear expectations can guide employee development and support structured improvement.

Identify the problem

Identify areas where employees can enhance their performance using specific metrics and examples. If the PIP process is intended to help a valued employee advance to a higher-level role, highlight the skill gaps between current performance and the role requirements. Include supporting documentation and evidence to ensure clarity and fairness.

Use measurable objectives

List actionable steps that struggling employees can take to meet deadlines and performance standards. Objectives are measurable, so you can track and evaluate progress. Include milestones and an overview of available resources, such as training or coaching.

Define the timeline

Outline the time frame for improvement, including meetings or supervisor check-ins. The schedule ideally supports progress while minimizing workflow disruption. This structure can help employees focus on achieving goals efficiently.

Track progress milestones

Actively monitor the employee’s progress throughout the improvement plan. Hold regular performance reviews and provide timely, constructive feedback. Document achievements, note areas that need adjustment and offer guidance or resources to help the employee succeed.

Discuss the results and outcomes

Explain what will happen if the employee does not improve their performance within the allotted time. Highlight the importance of meeting company expectations and continuous growth. Include opportunities for positive reinforcement, recognition and motivation to support progress throughout the performance improvement plan.

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 has encountered a one-time personal circumstance, such as stress, mental health or external factors that may impact their ability to meet expectations.

Determine whether you’ve provided appropriate accommodations and training that might alleviate the performance issues without needing a performance improvement plan. Document the performance issues you’ve noticed to establish a pattern that justifies a performance improvement plan. Struggling employees may benefit from a PIP earlier in the process, as proactive intervention can help address ongoing issues so they can actively participate in their improvement.

2. Document basic information

Record the basic information relevant to the employee, employer and circumstances. This process can include the employee’s name, your name, the date and the subject of the document. Treat the employee’s PIP as a formal document that outlines poor performance and the steps for improvement.

Some businesses use a standard PIP template to improve efficiency and ensure they include all necessary information. Recording basic information helps maintain accurate administrative records. 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 overall employee performance. This strategy generally 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, noting that you can use performance reviews to monitor progress toward these objectives.

4. Describe the concerns

For an underperforming employee, document specific issues, such as missed deadlines, as these are measurable indicators of specific performance concerns. Refer to your notes on documenting their pattern of underperformance. You can also use customer feedback to support your conversation, whether it highlights complaints or recognizes positive interactions.

5. Identify goals

Clearly outline the performance level you expect the employee to achieve. Set measurable objectives and hold progress reviews. Goals might include reaching sales targets or achieving specific metrics relevant to the role.

Using the SMART framework (specific, measurable, attainable, relevant and time-based) helps make goals actionable and achievable. The purpose of these objectives is to guide employees toward growth, support their development and help them reach a higher level of performance.

6. Determine a time frame

Set a reasonable time frame for the employee to achieve their performance goals, considering the improvements needed and the company’s priorities. Many businesses use 30-, 60- or 90-day periods for their performance improvement plans. Include a performance review or meeting at the end of the period to celebrate and track progress, assess achievements against milestones and plan next steps to continue supporting growth.

Regular check-ins demonstrate that you value the employee, improve communication and encourage continuous learning.

7. Outline resources

Outline any resources you’ll provide to help employees reach their performance goals. This can include customer service training, coaching or additional support relevant to their role.

Necessary resources may be internal or external, such as customer feedback, workshops, online courses, ongoing guidance from managers or anything that improves performance. Include any instructions the employee needs to access these resources, ensuring they feel supported and empowered to succeed throughout the performance improvement plan.

8. Explain disciplinary action

Clearly explain what will happen when the employee achieves or does not meet their job performance goals in the PIP. Present these outcomes transparently so the employee understands the supervisor’s expectations and the potential impact on their role.

Communicating this information clearly can help guide improvement and keep the process efficient. Documenting these steps also ensures consistency and provides a clear reference for the employee and management.

9. Remember signatures

When explaining the performance improvement plan to the employee, ensure both parties fully understand it. Have the employee and supervisor sign the document to confirm agreement and clarity. Leave space at the end of the PIP for signatures to complete this step.

10. Revise and edit

Review the performance improvement plan and make any necessary updates to ensure clarity and accuracy. Edit carefully to remove any errors in grammar, usage or mechanics.

Regularly reviewing and refining your performance improvement plan can help create a consistent, actionable tool for employee development.

Performance improvement plan template

Some companies use a standard performance improvement plan template to streamline the process and maintain consistency across employees. Others create a customized PIP for each individual situation. If you’re trying to implement an effective PIP process or need help structuring your own performance improvement plan examples, the following PIP template can serve as a guide:

[Employee name]

[Employee title and department]

[Employer name/department contact]

[Date]

This performance improvement plan (PIP) is designed to support you in meeting the expectations of your role and achieving your full potential at [company]. It outlines the key responsibilities of your position, the resources available to help you succeed and the steps we’ll take together if challenges persist.

We aim to help you thrive and continue contributing to [company objectives]. By addressing these areas, you can maintain your maintain your positive performance within the team and support the success of the organization.

Here are areas in which we’ve observed specific 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)

To support your continued success at [company], we’ve outlined the following goals to focus on over the next [timeline]. Achieving these objectives will help ensure you continue to meet expectations and continue making a meaningful impact on our team and work environment:

• First specific improvement goal
• Second specific improvement goal
• Third specific improvement goal
• Include additional goals as needed to align with company standards

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

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

When employees do not meet their goals, it affects the team and impacts our shared objectives at [company]. To help you succeed and contribute fully, we need to address these areas within [specified time frame]. If challenges continue, we will take the following steps:

• Consequence #1
• Consequence #2
• Consequence #3
• Include additional steps as relevant to 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]

A performance improvement plan (PIP) provides a clear path for growth and success. With focus, support and accountability, employees can meet expectations and continue making valuable contributions to the team.

Performance improvement plan templates for PDF & Word

Use these performance improvement plan templates, which are designed to be customizable and easy to use, to document areas for improvement and the steps your employees may 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 labour or employment regulations.