What is a PIP in employment? (And how to write one)

By Indeed Editorial Team

Updated 22 June 2022 | Published 3 January 2022

Updated 22 June 2022

Published 3 January 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Performance plans, designed for employers, are a method of assisting employees who are struggling in their current position. Unlike direct reprimands or dismissals, they lay out a useful plan with supporting materials to supplement this. Knowing how to use a PIP can help you deal with poor performance or behaviour in the workplace and ensure employees adhere to your expectations. In this article, we discuss the definition of a performance plan, offer tips on how to write one, and plan out a template to further illustrate how to produce a successful one.

What is a PIP in employment?

A PIP in employment stands for a Performance Improvement Plan. They are precise business documents that outline the set targets for specific employees. PIPs also outline potential issues with an employee's performance and behaviour that may prevent them from reaching their goals. Performance plans have a stigma attached to them, as they may be a sign of approaching termination, but ultimately these performance plans aim to encourage employees to improve their working habits and self-reflect on their current situation.

Related: How to get motivated and reduce stress in 10 steps

How to write a PIP

Below are five useful steps to follow when writing your performance improvement plan:

1. Determine which issues require improvement

Managers present a PIP to highlight current problems with an employee. Problems are usually performance-related, behaviour-related or a combination of both. When producing a performance plan, it's crucial that you identify and address specific issues for intervention. For example, if your employee is falling behind on deadlines, then you identify if it's an administrative performance-based issue or an issue based on their attitude towards their role. Doing so can allow you to handle the problem efficiently.

2. Clarify the expected level of performance and behaviour

Alongside identifying a specific problem, it's also necessary to set specific and practical goals the employee can work towards. This can give them a sense of purpose and a set of palpable targets to reach within a given time. For example, if the employee isn't meeting the standards of an assignment, set a minimum of what they are to achieve before a certain date. As long as your employee has a specific goal to reach, they can work keep working to improve their performance.

3. Provide suggestions for the employee to improve

After setting specific expectations, the next step is to provide beneficial resources to encourage the employee's improvement. Types of resources include:

  • further training

  • refresher courses

  • educational resources

  • manuals

  • work tools

The types of resources you use may depend on your industry and your own personal choice. Be sure that the resources are relevant and help the employee achieve the specific goals you have outlined for them.

4. Timetable progress meetings

Progress meetings are an opportunity for the employee to ask you for advice and guidance towards achieving their goals. They're also a good way for you to remark on their progress and praise the employee if appropriate. Alternatively, you can hand out warnings if they fail to meet the requirements you have set for them. It's important to be specific with both your praise and criticisms. In this way, the employee is fully aware of the implications of their performance.

5. Explain the consequences if the employee falls below standards

A time frame is immensely useful for performance improvements. Explain the ramifications of not meeting the requirements in full to your employee. Remember to further illustrate these so that employees know what to expect if they fail to meet the standards. For example, using absolute phrases and firm wording can make employees more aware that they are working on a strict time frame and motivate them to improve.

Related: Areas of improvement to help with employee performance

Performance plan example

Below is an example of a performance plan in a realistic workplace scenario:

Supervisor Name: John Doe, Human Resources Manager

Employee Name: Brenda Higgins, Motor Vehicle Salesperson

Date: 11th November 2021

Reason: As a result of poor performance on the sales floor, I am issuing this performance improvement plan. Your sales output has drastically decreased over the last three months. As of last month, your sales figures were down 30% for the entire month of October.

Expectations: You have one month, starting from 17th November and ending the week of 18th December, to increase your sales output to the minimum of 80% of the required target for all employees. Beyond this performance improvement period, you will be expected to sustain your average sales above that of 70%. Note that all motor vehicle salespersons are held to the same standards.

Suggestions: Below, you will find several links to helpful articles outlining effective sales tactics and persuasive psychology techniques. In addition, there are two dates for refresher courses on sales techniques you must attend in the coming weeks. My office is open to you throughout this review period if you require any further guidance.

Schedule: As sales opportunities are statistically slower in the morning, I suggest we schedule meetings every Friday as soon as you arrive at work. Report to my office at 8 a.m. on the following dates: 21st November, 30th November, 7th December and 14th December. Please inform me at least a day in advance if you cannot attend any of these meetings, and we can reschedule if necessary.

Consequences: Failure to meet objectives laid out within this plan by 18th December will result in instant termination. If you meet the requirements by 18th December, an additional review period will follow to monitor your continued progress. After this review period has ended, no further action will be taken.

Manager signature: John Doe

Employee Signature: Brenda Higgs

Things to remember when writing a PIP

Below is a list of pointers to help with the structure and language of a performance review:

  • Include the reason first: The employee needs to know what the performance issue is so that they can address it.

  • Use absolute language and firm, unambiguous wording: You want to warn the employee and then motivate them to achieve their goals.

  • Ensure the review period is one month plus a day: For example, from 7th March to 8th April. This gives the employee ample time to reflect on your comments and implement changes.

  • Provide useful statistics and percentages, especially for sales jobs: Be sure to include these if relevant and use them in the targets you set.

  • Include links to articles and seminars: This saves time and leads to fewer questions afterwards. It also gives the employee some structure to their improvement and lets them know what the plan involves.

  • Be firm and specific with the consequences: The employee needs to feel that there are consequences if they do not meet the targets.

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Frequently asked questions about PIPs

The following list details some of the most commonly asked questions about performance improvement plans:

When is a PIP necessary?

Performance improvement plans are not usually mandatory in most businesses, but they're very useful for tracking issues of employee accountability. If an employee has a temporary lull resulting in diminishing quality and work performance, then a PIP is ideal for addressing these issues. The plans are accessible to all levels of management, presenting them with an occasion to intervene and provide help. PIPs are usually the last attempt to save an employee from dismissal.

What is the difference between a reprimand and a PIP?

The general goals and contents of a PIP are similar yet different to a formal reprimand or write-up. The latter act as warnings that companies place on record, and their main purpose is to solely address the situation, ensuring that the employee is aware of the behavioural or performance issue. PIPs outline the issue and look at what those involved can do next. They are more pragmatic with regards to how they address the employee and make sure that they improve their situation.

What if performance drops again after the completion of the PIP?

As a safeguard against this, a lot of employers use a two-phase PIP process. The first phase involves drawing up the initial plan for the employee to follow, while the second phase involves additional monitoring after the completion date. The second phase allows more time for additional evaluation, with fewer meetings. In this way, the full performance plan period ends when the employee has met all of their targets.

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