How to Create a Performance Improvement Plan

If an employee has recurring performance issues, it may be time to put them on a performance improvement plan (PIP). Sometimes referred to as a performance action plan, employers often use this strategy to help underperforming employees understand the actions they’ll need to take to meet goals and remain in good standing with the company.

 

Although some employees may see a PIP as the first step in the termination process, it’s usually the opposite: you’re equipping the employee with a blueprint to help turn things around and perform at the level you expect. But if an employee does not meet the requirements outlined in the plan, you may need to take further disciplinary action.

 

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When is it time to administer a performance improvement plan?

When an employee receives a PIP, it should not come as a surprise. Often by this point, their direct supervisor will have had at least one documented conversation about performance issues. If you aren’t sure whether you should prepare a PIP, consider the following:

 

  • Does the employee have a habitual performance problem? A PIP should not be used for a one-off issue. If an employee makes a mistake, the direct supervisor should have a documented conversation to discuss their concern and give the employee an opportunity to make corrections. However, if the issue becomes chronic, it may be time for a PIP.
  • Can the issues be corrected with an action plan? Issues with work quality, meeting sales goals and completing work by deadlines are all examples of behaviours that can be corrected through a PIP. Insubordination or misconduct, on the other hand, should be addressed through disciplinary action.
  • Have you made all reasonable accommodations to help get the employee on track? Is the employee’s poor performance due to a lack of training or a known personal issue? If so, make sure that you’ve taken the necessary steps to bring them back up to speed. If you’ve made these accommodations and the issue persists, a PIP may be the course-correcting action they need to improve.

 

What should I include in the performance improvement plan?

Here are a few elements you should include in your PIP:

 

  • A description of the performance issue (including examples)
  • A statement describing the organisation’s performance expectations
  • An explanation of how the employee should correct their performance, including any resources the employer will provide
  • A timeline and end date by which the issues must be corrected
  • A statement listing potential consequences for failing to meet the outlined expectations

 

Performance improvement plan sample

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

 


 

John Smith Sales Account Executive 5 July 20XX
 

Performance improvement plan

This document serves to provide you with a plan to correct performance in the following areas:

 

  • Sales quotas: You are expected to meet a minimum of 80% of the quarterly quota.
    • You failed to meet your minimum sales quota for Q2 20XX
  • Customer retention: You are expected to maintain a quarterly customer retention rate of 50%.
    • You failed to meet the minimum customer retention goal for Q2 20XX

Action items to correct performance To correct performance, you must complete the following activities:

  • Commit to a minimum of 3 (three) hours of phone time, in the office, per day.
  • Secure no fewer than 5 (five) lead appointments per week.
  • Share your weekly lead list with your immediate supervisor every Monday by 9 am.
  • Secure a minimum of two in-person visits with existing clients per quarter.
  • Meet with your immediate supervisor every Friday at 9 am to discuss the lead list, completed appointments and pending deals.
  • Complete the ABC tier 2 sales modules to become certified by 30 July 20XX.
  • Ask your immediate supervisor for mentorship and assistance as needed.

By following this action plan, we are confident that you will be able to improve your performance and meet the expectations of ABC Company.
 
If you cannot meet 80% of your Q3 quota and cannot meet a customer retention rate of 50% by 1 September 2018, you will subject to disciplinary action, up to and including termination.
 
[SIGNATURES]
 
Being given a performance improvement plan can be difficult for employees, especially if they are highly engaged and dedicated to their role. Remember to assure the employee that you want to help them improve and are willing to offer the help and guidance they need to meet expectations and succeed in their job. While a PIP isn’t a guarantee that an employee will improve, providing a step-by-step action plan will ensure that you’ve made every effort to get them on the right track.

 

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