What is a performance improvement plan?

A performance improvement plan is a formal document that communicates performance concerns and outlines a structured process for resolving them. Employers often use PIPs to:

• Identify performance gaps.
• Set measurable goals and timelines.
• Provide resources or support for improvement.
• Document progress and outcomes.

Unlike informal coaching, a PIP is an official record that shows an employer took reasonable steps to help an employee succeed before considering further action, such as reassignment or termination.

Why use a performance improvement plan?

Employers turn to performance improvement plans when they need to balance accountability with support. A thorough PIP offers benefits for the employee and the organization, such as:

Clarifies expectations

A PIP outlines where an employee’s performance needs to improve. Rather than leaving feedback open to interpretation, it identifies specific behaviours or results that need to change. For example, you might outline that customer response times need to improve from 48 hours to 24 hours. This clarity can help employees understand not only what needs to change but also how you will measure their performance going forward.

Provides structure

Improvement plans establish clear expectations by providing employees with concrete steps and timelines. This structure enables employees to maintain progress and allows managers to evaluate progress consistently. For example, rather than broadly asking a sales representative to “increase sales,” you might set a requirement to meet a defined monthly quota for three consecutive months. This approach ensures that performance goals are measurable and achievable within a specified timeframe.

Supports fairness

By creating a written record of performance concerns and opportunities for improvement, a PIP demonstrates that the employer is taking a fair and consistent approach to addressing performance issues. Clear expectations prevent shock. Documented performance improves decisions, helping shield your business from claims of unfair or arbitrary dismissal.

Encourages accountability

A PIP makes progress visible for the employer and the employee. Regular check-ins and documented milestones keep the process transparent. Employees understand they’re responsible for meeting agreed-upon objectives, while managers have a clear system in place to track and evaluate improvements. This mutual accountability helps strengthen trust in the process and reduces the likelihood of miscommunication.

Protects the business

If an employee fails to improve, the PIP serves as documented proof that the company handled the situation fairly and consistently. This documentation can be significant if a termination leads to legal or compliance challenges.

Having a detailed record of performance issues, corrective steps and follow-up meetings helps employers prove that they acted responsibly and followed proper business management procedures.

When to use a PIP

Performance improvement plans are not appropriate for every situation. Employers generally use them when:

• An employee consistently underperforms compared to their peers.
• Informal feedback has not led to sustained improvement.
• The employee can reasonably correct performance gaps with support and clear goals.
• The behaviour does not involve severe misconduct that would warrant immediate disciplinary action.

PIPs typically work best when issues are related to productivity, accuracy, timeliness, communication or following procedures. They are often ineffective for serious violations of company policy or workplace safety.

Key elements of a performance improvement plan

A strong PIP is clear, specific and actionable. Employers might consider including:

Description of performance issues

Outline what behaviours, tasks or results are not meeting expectations.

Example: Employee has submitted three reports late in the past two months, delaying client deliverables.

Expected outcomes

Define measurable goals.

For instance: All reports must be submitted by the agreed-upon deadline for the next 60 days.

Timeline for improvement

Set a realistic timeframe, such as 30, 60 or 90 days, depending on the role and issue.

Support and resources

Note what assistance you will provide, such as additional training and development, mentorship or technology tools.

Consequences of not improving

Be open about potential outcomes if the employee does not meet your expectations. This may include reassignment, demotion or termination.

Progress checkpoints

Schedule regular reviews, such as bi-weekly or monthly meetings, to evaluate performance and adjust the plan if necessary.

How to implement a performance improvement plan

Implementing a PIP requires balance. The following steps can help you make it structured yet supportive:

1. Gather documentation

Review performance data, attendance records or client feedback to support the need for a PIP. Avoid relying solely on anecdotal information.

2. Draft the plan

Use clear, objective language. Focus on specific actions rather than vague terms such as “be more engaged.”

3. Meet with the employee

Present the plan in a private setting. Explain the concerns, walk through the document and allow the employee to ask questions. You might also consider asking about the employee’s job satisfaction. 

4. Provide resources

Offer access to training, job aids, mentorship or tools that support success. Demonstrate to the employee that your organization values their growth and development.

5. Monitor progress

Schedule check-ins to evaluate performance against the goals. Document each discussion to maintain your records.

6. Conclude the plan

At the end of the timeframe, determine whether the employee has met expectations, requires extended support or may transition out of the role.

Common performance improvement plan mistakes to avoid

Employers can maximize the effectiveness of PIPs by avoiding common pitfalls, such as:

• using a PIP as a signal of inevitable termination rather than genuine support
• setting unrealistic goals or timelines the employee has little chance of meeting
• failing to provide resources or guidance during the plan
• neglecting to document progress and follow up consistently
• allowing vague language that makes it unclear how you will measure success

Benefits of PIPs for employers

Implementing PIPs correctly can create stronger teams and a healthier workplace culture. Employers may observe benefits such as:

• reduced turnover costs by helping employees improve instead of replacing them
• stronger documentation for compliance and risk management
• improved productivity when employees align with expectations
• better communication between managers and employees
• enhanced reputation as a fair employer who invests in staff

Sample performance improvement plan template

Here is an example of a PIP that employers can adapt to their business:

Employee name:

Job title:

Manager:

Date:

Performance concerns:

Clearly outline the issues (missed deadlines, errors, communication problems, etc.).

Improvement goals:

List measurable expectations (e.g. reduce errors in reports by 90% within 60 days).

Resources provided:

Detail training, mentorship or tools the company will supply.

Timeline:

Specify the length of the plan and checkpoint meetings.

Evaluation criteria:

Define how you will measure and communicate success.

Consequences:

Note what will happen if the employee does not achieve their goals.

Signatures:

Employee and manager sign to acknowledge receipt.

A performance improvement plan is more than a compliance document. When used correctly, it empowers employees to grow while protecting the business from risk. By setting clear expectations, offering resources and tracking progress, employers can use PIPs to strengthen performance and foster a culture of accountability.