How to Use Performance Improvement Plans to Create a Supportive and High Performance Culture

If your employees don't know they have a problem concerning their skills and competencies, how could they improve?

But if your employees can't do anything about their performance, this might prevent the company from achieving its objectives. 

And this is where a performance improvement plan (PIP) comes in.

Employees cannot read your mind. Sure, some might have a feel for their lowering productivity, but they might be struggling to find the right course of action. 

It's your duty to help employees improve their skills and knowledge. But don't treat PIPs as corrective measures spreading panic in the workplace. 

Effective PIPs are one of the many instruments at your disposal to create a positive workplace culture based on the values of constant learning and improvement, collaboration, and support. 

Struggling to get started? We have everything you might need: tips, examples, and a plan template.

🧰 What's a performance improvement plan (PIP)?

A performance improvement plan is a supportive tool for employees with performance deficiencies, aiming to help them overcome performance challenges. ‍

You can see PIPs as roadmaps that show employees how to get to their destination of increased performance. Some elements on this roadmap include: 

• training;
• upskilling or reskilling;
• coaching and mentoring etc.

PIPs enable employees to identify their weaknesses and negative behavioral patterns while providing guidelines for improvement to achieve specific performance standards.

Also, this documented tool lays out the individual employee objectives, relevant timelines for achieving the set goals, and consequences for various outcomes. Plus, it includes the available resources the organization will provide employees for their improvement. 

Tip #1:  The quality of a PIP and its implementation are central to the success of employee performance management. 

Tip #2: You don't want the employees you manage to feel that their review has been unfair. 

⚖️ Should you implement PIPs?

"I think it's very important to have a feedback loop, where you're constantly thinking about what you've done and how you could be doing it better." Elon Musk.

75% of employees value feedback systems. However, 85% of employees would consider quitting if they felt that their performance review was unfair. 

So, the question is: should you implement PIPs? 

There are multiple benefits to using performance improvement plans, but there are also some essential cons to consider. 

🟢 The Pros of PIPs

Below are some of the primary benefits of implementing employee performance improvement plans.

Improves company culture

Company culture is the way organizations do things. It includes informal behaviors and attitudes, as well as structured systems. 

PIPs enhance accountability, pushing everyone to work and meet the company's objectives. As a result, employees will have no issues learning new skills to do their job well. And that, in turn, will drive up productivity.

Improves employee performance

Seventy-four percent of employees are willing to re-train or learn new skills to remain employable. 

Since a PIP lays out a plan for addressing an employee's struggles, it will help them improve their skills at a personal level.

A well-trained employee will be more capable of doing their job and perform better. Then, you won't have to replace them. 

Also, investing in employees pays in the long term. They will be available if you need to fill vacant positions that arise when some retire or quit.

More effective than relying on annual reviews

About 64% of employees think the feedback they receive needs some improvement. 

Plus, 92% of employees want feedback more than once a year. 

So, performance improvement plans are an excellent alternative.

Typically, PIPs last from 30 to 90 days. This allows you to provide feedback to employees more frequently, enabling them to obtain more information about their growth and implement any suggestions faster.

Saves time and money

When an employee routinely falls short of expectations and doesn't change, you may have no choice but to fire them. But laying off employees means hiring and training more people to take those positions without knowing whether they will perform.

It's no wonder that the loss of an employee can cost your company 150 to 200% of their annual salary. 

You will need to spend money on advertising the vacancy, screening and interviewing applicants, and onboarding them. At the same time, overall team productivity will suffer until filling the position and even beyond until onboarding is complete.

Therefore, using a PIP to train and develop existing talent will save time and money. 

Plus, you can watch the employee grow their careers and promote them from within since the talent is already available. It's a win-win situation for everyone concerned. 

🛑 The Cons of PIPs

But PIPs are not all sunshine and rainbows. Many employees might panic when receiving a PIP, wrongly interpreting it as a prequel to their termination. 

Lowering employee morale

The average employee may consider following a PIP a personal attack on their capabilities. So, it may lower their morale, make them more disengaged in the workplace, and cause trouble.

Increasing employee turnover

When employees consider a performance improvement plan a warning or disciplinary action, they will likely become disengaged and begin searching for another job. 

Tip: It is your responsibility to communicate clearly and to convince employees that PIPs are a tool to help them. At the same time, however, you do need to be clear with your performance expectations. 

Under what circumstances is performance subpar?

🕖 When should you implement a PIP?

Due to the mixed reactions a PIP is likely to elicit, do treat it carefully. 

Of course, not every employee or negative performance will require one. But some situations do call for PIPs.

Here's when employees may need personal improvement plans.

When your company is pivoting

Significant organizational changes may make perfect sense to you. But many employees will likely resist them. 

Introducing performance improvement plans may work as the company pivots, especially if they involve several people. 

Tip: You could frame each PIP as redefining the company roles and ensuring that each employee is ready to handle the changes. 

Doing so will make employees less defensive and more likely to participate in the transformation while improving their skills.

When there's a dramatic shift in role requirements

Introducing new technology is problematic because it can completely change how everyone works. 

The great news is that 69% of managers who considered their digital transformations successful offered training before and after go-live. 

When a company embraces a new form of technology or experiences a technological breakthrough, that is the right time to introduce PIPs. 

Tip: You can redefine roles and areas of focus, create a development and growth plan, continuously provide feedback, and monitor the employees' progress.

When the employee's performance is really low

When an employee's performance deteriorates to such an extent that the company can't ignore it any longer, you must use a PIP to offer that employee the last chance to make things right and save their jobs.

🪜 Create your performance improvement plan in 7 steps

What does a good performance improvement plan look like? 

Here's a guide on creating an effective plan for your employees.

1. Determine acceptable performance

Start by defining what acceptable performance is for the employee and the position they occupy. 

What does success look like for someone in a particular position?

Tip: You can specify acceptable performance in terms of productivity, engagement, time, etc. 

For example, if your employee is a salesperson, you need to specify the average sales expected per week, month, or year. 

On the other hand, for a manager, some of the issues that may arise could relate to:

• whether they treat their juniors well, 
• the overall team performance under their watch, 
• whether they lead by example, etc.

2. Investigate root causes of unsatisfactory performance

When an employee's performance significantly drops, there could be a good reason why that person is no longer as productive as they should or used to be.

For example, your employee could have just adopted a child, been undergoing a divorce, or have a severe illness. 

Tip: Understanding the problem's root cause lets you determine the best action to take to improve their performance.

3. Create measurable objectives

Your objectives should be measurable. And they should also be specific to employee roles and personal situations.

Tip: So, use specific, measurable, attainable, relevant, and time-bound (SMART) goals.

For example, you could state that the employee should generate sales worth $200,000 of farm machinery within three months. 

Remember, if your goals are unrealistic and unquantifiable, it will be difficult for someone to achieve them. So, start by researching each role and understanding how it contributes to company goals. And factor in the company's existing resources and support systems.

➡️ Check out 14 examples of developmental goals and ways to achieve them.

4. Communicate clearly with the employees

Making the employee understand that a PIP is neither a disciplinary action nor a preamble to firing is vital. Employees shouldn't feel threatened when you place them under supervision. 

Tip: Ensure that your employees view PIPs as a tool to help them overcome deficiencies and enable them to perform at their best. 

5. Place emphasis on positivity

You should be as positive as possible at every stage of the performance improvement plan. 

Tip: Even when discussing a negative action, avoid attacking the person you review. 

6. Draft an action plan

Your performance improvement strategy must include an action plan with some essential elements: 

• Smart goals, as previously discussed.
• Milestones that employees can achieve and celebrate. Achieving milestones will allow employees to feel a sense of achievement, rendering the whole process more positive. 
• A timeline including each milestone until the employee achieves 100% of the set objectives. A performance improvement plan cannot go on forever. 
• A check-in schedule so you can offer relevant feedback and refine focus areas. 
• All available resources. For example, will they need to undertake online courses, or will the company provide peer and customer reviews? Alternatively, will someone offer one-on-one mentorship to guide the employee through the ropes?

7. Ensure that the employee understands performance expectations and possible repercussions

You must explain how the company will help employees achieve the set PIP objectives. That means clearly communicating the company's expectations and the possible repercussions when they fail to achieve the set objectives. 

Tip: Remember, the clearer you are about the company's expectations, the better off you will be if there's legal scrutiny later. 

💡 7 Tips for effective PIPs

The success or failure of your performance improvement plans will largely depend on how you structure and implement them. Below are seven tips for effective PIPs. 

Be direct and specific when communicating the results of the performance analysis

You should clearly explain to every employee under review what their issues are.

You also need to shed light on any specific patterns of behavior that need tackling.

Tip: Include the previous performance reviews and peer feedback so they understand what they should work on. 

Draft a preliminary schedule for check-in and feedback sessions. 

Also, communicate how you will measure the employee's progress. For example, you could use team reviews and feedback surveys.

Have a positive and constructive attitude

Give customized constructive criticism when developing the employee's skills by offering praise for things done correctly while clearly stating the areas the employee still needs to improve. 

Tip: Remember to criticize the action, not the person. This will help you prevent demoralization and defensiveness.

In addition, you should offer realistic and practical solutions for fixing the employee's problems. Also, avoid micromanaging the employee, so they can have room to work on the challenges they face.

➡️ For more best practices and tips for using feedback to create an engaging workplace culture, check out our 20 best practices for employee feedback.

Embrace two-way communication

Solving employee problems requires the participation of all stakeholders, including the employee whose performance is under review. So, listen to them and ask for their side of the story and suggestions on what to do. 

Tip: People are more likely to embrace change when they can proactively deal with their issues. And since they have first-hand information about their problems, they could offer insights you can include in the action plan.

Be upfront about expectations and repercussions

We cannot stress how important it is to share your expectations for performance and improvement. And the more specific you can be, the better.

Tip #1: Let employees know what you expect from them after they access the available resources. 

For example, what are the expectations of performance output after training?

Tip #2: Also, be as factual as possible when communicating your expectations so that they don't take things personally, but understand the gravity of their situation. 

Tip #3: Also, remember to clearly state the outcomes if they don't meet the objectives, including termination, transfer to a different department, and demotion.

Document the conversations as check-in meetings take place

PIPs can come back and haunt you. 

For that reason, you need to document the discussions during check-in meetings. 

Tip: Any meeting notes will be an excellent reference point for you and the employee under your supervision.

Evaluate the plan's progression

Without feedback, performance improvement plans won't work. 

So, use 360-degree performance reviews to distribute the burden of providing criticism across the board and from top to bottom. Therefore, managers, colleagues, and even customers will offer feedback.

You can conduct 360-degree performance reviews via one-on-one check-in meetings where you will have personal discussions with the employee. Also, you can include surveys and peer and performance reviews. 

Tip: Every part should offer feedback independently to prevent bias.

You can then work with the employee to refine the focus areas based on the feedback. And once they complete one stage of the improvement plan by improving their behavior, productivity, and skills, they can progress to the next.

Reward success at the end of the plan

Effective recognition and rewards programs increase the average employee's performance by 11.1%. So, rewarding success at the end of the plan is something you cannot skip.

Of course, one of the most significant rewards at the end of the PIP period is the freedom the employee gets from scrutiny from their supervisor. 

But there is more you could offer them in terms of rewards.

Tip: Consider giving public and private recognition of the excellent work done, a free lunch, paid trips with their peers, gift cards, handwritten thank-you notes, etc. 

🏢 Performance improvement plan examples

Here are some performance improvement plan examples worth emulating.

Improving customer service

If you want an employee to improve their customer service, provide mechanisms to enable customer feedback. These could be in the form of surveys, online reviews, and testimonials.

In addition, train employees and empower them to be empathetic and proactively find solutions to the customers' problems. 

And it never hurts to introduce technological tools that help everyone work more efficiently. 

For example, a data center may create a PIP for a customer service representative who has attracted multiple customer complaints. Customers were unhappy with the solutions given to their product problems and rude behavior, so you need to address these issues. 

The PIP will include: 

• A refresher course on product details and client handling.
• A goal of getting at least four positive customer testimonials within 60 days.

Improving productivity

When employees are not producing as much work as they should on any given day or week, having them follow a performance improvement plan may be helpful. 

For example, suppose you run a content marketing agency. One of your best writers begins to lag significantly. Instead of writing the standard 15,000 words weekly, they only submit 5,000. Yet, you require more productivity. So, you ask the employee what's wrong, and they tell you they just adopted a baby and are struggling to cope.

In deference to the writer's additional responsibilities as a new parent, you could set a 10,000-word limit per week, order them to submit 2,000 words of work to the supervising editor by the end of each day, and schedule a bi-weekly check-in for at least three months. 

If the writer succeeds, they get to keep their job. But if they fail, you may need to let them go or demote them to lower-paying work.

Improving role-specific skills

The example below is for a content marketing writer with low productivity and poor SEO and grammatical skills.

Areas of improvement: 

• Low writing output
• Excessive Grammatical Errors
• Poor SEO skills

Main objectives of the performance improvement plan: 

• Increase writing output. 
• Acquire SEO skills.
• Incorporate new tools to improve writing quality.

Improvement milestones:

• Increase writing output from 5,000 words to 10,000 words a week.
• Each article should achieve at least 90% on Grammarly.
• Learn how to use Clearscope to incorporate relevant keywords in the content and meta description.

Additional support required: 

• coaching session on best practices for successful content. 
• Grammarly and Clearscope premium accounts.

Action plan and deadlines:

• Submit 2,000 words by the end of each weekday by 11/19/2022.
• Create articles with minimal errors and plagiarism incidences by passing them through Grammarly Premium.
• Watch the Clearscope training video provided via email by the editor. Complete Clearscope training by 9/29/2022.
• Create the first article on the Clearscope platform and ensure it scores at least a B+ by 5 October 2022. 
• Incorporate Clearscope into daily workflow by 11/19/2022.

Follow-up schedule:

Weekly 1:1 check-in – every Friday at 8.00 pm via video conference.

📝 Performance improvement plan templates

We have created a performance improvement plan template to help you. You can easily customize it for each individual employee.

Below you will find the performance improvement plan template in an editable pdf format.

We also created a word version of our template.

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➡️️️ Enable a high-performance workforce with Zavvy

With the right tools, you can put employees in the driver's seat of their growth and development. 

Our Employee Development Software enables seamless growth and development cycles. All your employees can benefit from a competency framework (our role cards): 

• understand their roles, and 
• what they need to do to fulfill their responsibilities successfully.

And for every employee whose performance needs improvement, there's always our 360 Feedback Software. You can use it to get feedback from all relevant parties at all levels of the organization, enhancing engagement, performance, and growth.

Collect actionable and meaningful feedback and link it back to employee development objectives. This is a winning formula for an engaged and high-performing team.

Get in touch for a 30 minutes free demo to see our solutions in action.

❓ Performance improvement plan FAQs

Is a performance improvement plan a disciplinary action?

PIPs are not meant to discipline employees but can serve as formal support for underperforming employees.

Is a performance improvement plan required?

PIPs are not always required unless an employee's poor performance is significant and affects the company's goals and bottom line.

Are performance improvement plans effective?

Well-structured PIPs that outline specific objectives and provide comprehensive resources are effective. 

So, to be effective, you need to clarify: the employee goals, timelines, supportive materials, checking-in schedule, etc.

When should a performance improvement plan be used?

You should use PIPs when an employee's poor performance significantly impacts the team morale, company productivity, and bottom line.

How long should the performance improvement plan last?

Most PIPs last anywhere from 30 to 90 days, depending on the severity of the issue.

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