What is a performance improvement plan?

A performance improvement plan (PIP) is a proactive tool designed to support employees in overcoming performance challenges and meeting expectations. Rather than being a step towards termination, a well-crafted PIP provides clear guidance and actionable steps to help employees succeed in their roles.

By outlining specific goals and expectations, a PIP creates an opportunity for employees to improve while demonstrating your commitment to their development. 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?

A performance improvement plan (PIP) should be introduced with caution and only when appropriate. It’s not meant to address one-time mistakes but to provide structured support for ongoing performance challenges and ultimately, boost job satisfaction. Ideally, an employee receiving a PIP should already be aware of the issues, as their supervisor will have had at least one documented conversation in the form of constructive feedback beforehand. 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 one-off incidents, a direct conversation is usually sufficient to address the concern and offer an opportunity for improvement. 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. Behaviour like insubordination or serious misconduct, however, typically require disciplinary action rather than a PIP.
• Have you taken reasonable steps to support the employee? Before initiating a PIP, ensure you’ve made reasonable accommodations to support the employee and ensure there are no communication barriers. Consider whether their under-performance arises from factors like insufficient training, unclear expectations or personal issues. If you’ve already addressed these factors and the problem persists, a PIP may provide the structured approach they need to succeed.

What should I include in the performance improvement plan?

A well-written performance improvement plan (PIP) provides clear, actionable steps for the employee to address performance issues and meet expectations. Here are the key elements to include in your PIP:

• A description of the performance issue: Detail the specific performance problems, using examples where possible to ensure the employee understands exactly what behaviour or outcomes need improvement and eliminate any ambiguity.
• 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: Describe how the employee can correct their performance. Include actionable steps they should take and highlight any resources or support the organisation will provide, such as additional training, mentorship or access to tools.
• A timeline and end date: Set a clear timeline for the PIP, specifying key milestones and an end date by which the performance issues must be resolved. Regular check-ins during this period can help track progress and address any roadblocks.
• Potential consequences for non-compliance. Clearly state what will happen if the employee fails to meet the outlined expectations by the end of the PIP. This could include additional action, such as reassignment, demotion or termination, depending on the severity of the situation.

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

Performance improvement plan sample

Here is an example of a PIP you can adapt to create your own performance improvement plan template:

Performance Improvement Plan (PIP)

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

Objective:
This performance improvement plan outlines the steps necessary to address performance concerns and achieve the expected standards for your role. By following this plan, we aim to support your growth and success within ABC Company.

Performance improvement plan

• Sales quotas:
  • Expectation: Achieve a minimum of 80% of the quarterly sales quota.
  • Observation: You did 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

To meet the required performance standards, the following actions must be completed:

• Dedicate a minimum of three hours of phone time in the office per day.
• Secure at least five lead appointments per week.
• Share your weekly lead list with your immediate supervisor every Monday by 9:00 a.m.
• Schedule and complete a minimum of two in-person visits with existing clients per quarter.
• Attend a weekly meeting with your immediate supervisor every Friday at 9:00 a.m. to review your lead list, completed appointments, and pending deals.
• Complete the ABC Tier 2 Sales Modules and obtain certification by 30 July 20XX.
• Seek mentorship and assistance from your immediate supervisor as needed to support your progress.
• Ask your immediate supervisor for mentorship and assistance as needed.

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: Weekly meetings with your supervisor will monitor progress and provide ongoing support.

Consequences for non-compliance

If the outlined performance expectations are not met by 1 September 20XX, you may be subject to further disciplinary action, up to and including termination.

Acknowledgment and agreement

I acknowledge that I have reviewed and understood this performance improvement plan and its requirements. I commit to meeting the outlined expectations and taking the necessary steps to improve my performance.

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. It’s important to reassure them that the purpose of the PIP is to support their success and motivate them, not to single them out. Emphasise that you are committed to helping them improve by providing clear guidance, actionable steps and ongoing support to meet expectations.

While a PIP cannot guarantee improvement, it ensures that both the employer and employee are making every effort to address performance issues constructively. By offering a structured action plan, you create an opportunity for the employee to get back on track and thrive in their role.

FAQs

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

A PIP is a supportive tool designed to help employees address performance issues and meet specific goals, while disciplinary action is typically used for addressing misconduct or when attempts to improve performance have been unsuccessful.

How do you track progress during a PIP?

Progress can be tracked by setting clear, measurable goals and scheduling regular meetings with the employee to review achievements and adjust the plan if needed.

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

Yes, a PIP can also be used as a development tool for high-performing employees to refine specific skills, address areas for improvement or prepare them for more senior roles within the organisation.

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.

*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.