What is a performance improvement plan?

A performance improvement plan (PIP) is a structured document that some organisations use to outline expectations and describe steps related to performance concerns. Approaches can vary, and many organisations adapt the format based on their internal policies and practices.

A PIP typically outlines goals and expectations, describing how performance requirements are communicated within an organisation. However, if the plan’s objectives aren’t met, further steps may be necessary to address the situation.

When to use a performance improvement plan?

Some organisations use a performance improvement plan (PIP) when ongoing performance issues have been documented. A PIP is generally focused on recurring or sustained concerns rather than isolated, one-off errors, though individual organisations decide how to address different types of issues under their own policies.

In many organisations, employees are already aware of concerns before a PIP is introduced, as prior conversations may have taken place. If you’re unsure whether a PIP is the right step, consider these key questions:

• Is the performance problem ongoing? A PIP is designed for addressing recurring or chronic issues, not isolated mistakes. For isolated incidents, many organisations address concerns through direct feedback rather than using a PIP. However, if the same issues persist over time, a PIP may be necessary to provide clear, actionable guidance.
• Can the issues be corrected with an action plan? PIPs work best for performance issues that are correctable through specific actions, such as improving work quality, meeting sales targets or deadlines. 

What should I include in the performance improvement plan?

Many performance improvement plans (PIPs) outline clear steps related to performance concerns and how expectations are communicated within the organisation. Here are the key elements to include in your PIP:

• A description of the performance issue: This section typically outlines the specific performance concerns, using examples where possible to clarify which behaviours or outcomes are being referenced.
• A statement of performance expectations: Clearly explain what the employee is expected to achieve and how their performance will be measured to meet the required standards.
• Plan for improvement: This section often outlines steps related to improvement and notes any resources the organisation will make available.
• A timeline and end date: PIPs commonly include a timeline with key milestones and an end date. Regular check-ins during this period can help track progress and address any roadblocks.

Related: What is speak-up culture in the workplace?

Performance improvement plan sample

Here is an illustrative example of what a PIP document may look like in some organisations.

Performance Improvement Plan (PIP)

Employee Name: Jamie Thompson
Position: Sales Account Executive
Date: 5 July 20XX

Objective:
This performance improvement plan outlines expectations and steps related to identified performance concerns, based on ABC Company’s internal practices. This document reflects how expectations and required actions are communicated within ABC Company.

Performance improvement plan

• Sales quotas:
  • Expectation: Achieve a minimum of 80% of the quarterly sales quota.
  • Observation: You did not meet the Q2 20XX minimum sales quota.
• Customer retention:
  • Expectation: Maintain a quarterly customer retention rate of 50%.
  • Observation: You did not meet the Q2 20XX customer retention goal.

Action plan for improvement

Example actions that an organisation might include in a PIP could involve:

• Setting a target number of hours for outreach activities
• Establishing weekly lead-generation goals
• Sharing weekly lead lists with a supervisor

Evaluation and timeline

• Review period: Q3 20XX (ending 1 September 20XX).
• Performance expectations: Achieve 80% of the Q3 sales quota and maintain a quarterly customer retention rate of 50%.
• Check-ins: Some organisations schedule periodic meetings with a supervisor during the review period, depending on internal practice.

Consequences for non-compliance

If performance expectations are not met, some organisations may take additional steps as outlined in their internal disciplinary or performance-management procedures. These steps vary by organisation and policy.

Acknowledgment and agreement

I acknowledge that I have reviewed and understood this performance improvement plan and its requirements. My signature confirms that I have reviewed this plan and understand how expectations are being communicated.

Employee Signature: _________________________ Date: _______________

Supervisor Signature: ________________________ Date: _______________

Being placed on a performance improvement plan (PIP) can be challenging for employees, particularly those who are otherwise committed in their role. Some organisations communicate that the purpose of a PIP is to outline expectations and document steps related to performance concerns. PIPs often include documented expectations, outlined steps for improvement and regular check-ins during the review period.

A PIP can provide a structured way for organisations to document expectations and track progress, depending on their internal performance-management approach. Organisations vary in how they use PIPs and how they support employees during the process. A structured plan can outline expectations and describe the steps an organisation may reference when addressing performance concerns.

FAQs

What is the difference between a PIP and a disciplinary action?

Some organisations use PIPs to outline performance expectations and document recurring concerns. Disciplinary processes are typically used for issues involving conduct or policy breaches, depending on internal guidelines and any applicable official requirements.

How do you track progress during a PIP?

Many organisations track progress through measurable goals and periodic check-ins, depending on internal practice.

Can a PIP be used for high-performing employees who need development in specific areas?

Some organisations may also use a PIP as a development tool for employees who are strengthening specific skills or preparing for more advanced roles.

Related articles:

• How to conduct an employee evaluation
• Exit interview form
• What is a toxic workplace and how to avoid it?

Performance Improvement Plan Templates for PDF & Word

Use these templates to create a plan that equips your employees with a blueprint to improve their performance.