Employee Performance Improvement Plans: Template & Tips

This post on employee performance improvement plans was published in April 2019. It was updated in December 2021 and July 2024 with new information.

Even with the most effective hiring process and performance management strategy, sometimes, employees won’t meet expectations. Regardless of what’s causing an employee to miss deadlines or fall short of goals, you want to address why they are struggling and help them improve. In that case, you might choose to put employees who are having problems on a performance improvement plan (PIP). 

Much like formal performance reviews, PIPs often get a bad reputation. But rather than being a sure sign of impending termination, PIPs can help get employees back on track and grow their skills. PIPs can also serve as an opportunity for managers to flex their coaching muscles. Ultimately, PIPs don’t have to incite fear — they can be a path to greater success. 

Learn how to use PIPs as tools to build strengths, prevent larger issues, and help your business achieve its goals. 

🗝️ What’s the key to a great PIP? Dive into our blog for a step-by-step guide and valuable tips on crafting effective employee performance improvement plans, then get your PIP template:

What Is a Performance Improvement Plan?

A performance improvement plan, or PIP, is a tool for addressing recurring and/or serious issues with employee performance. PIPs are meant to help employees resolve performance failures or deficiencies and succeed in their roles. They’re formal documents that outline exactly what an employee needs to do to meet performance standards for their role. PIPs take place over a set period of time, usually 90 days, when employees are evaluated again.

PIPs are for situations in which an employee fails to meet their goals consistently or makes serious mistakes. If they are underperforming despite receiving proper training and support and getting chances to correct their behavior, and they aren’t affected by external factors in their work environment or personal lives, a PIP can help them get back on track.

How Do Performance Improvement Plans Work?

According to SHRM, these are the most common outcomes of performance improvement plans:

• The employee’s performance improves
• Discovering a training or skill gap that can then be resolved
• Other actions including role transfer, demotion, or termination

SHRM also notes that performance improvement plans should be a genuine “commitment to help the employee improve” rather than as a disciplinary action or precursor to termination. They’re sometimes called performance action plans, a term that may serve your organization if you want to avoid the negative connotations associated with PIPs. 

Consider these questions when determining whether an employee would benefit from a PIP, if it’s unlikely to make an impact, or if you should take another course of action:

• What specific performance issue is being addressed? 
• Is the issue recent or a recurring problem? 
• Has the employee’s manager attempted to address the issue to prevent a PIP?
• Do you feel the manager truly wants to help the employee improve, or does it seem like the plan is the first step toward terminating the employee?
• Will a PIP be sufficient to address the performance issues that are occurring, or are the performance concerns outside the scope of what a PIP can address?
• Has the employee received all the training they need to be successful? 
• Are events in the employee’s personal life affecting their performance? 

Employees who pass or complete their PIP return to work as usual, with some additional follow-up from their managers. However, if an employee does not pass or complete their PIP, your company might choose to transfer, demote, or terminate them.

Key Elements of an Effective PIP

Performance improvement plans that inspire improvement instead of irritation share some key characteristics:

• Clear expectations about what needs improvement and goals the employee needs to meet.
• A structured action plan, including a timeline, for meeting those goals.
• Regular check-ins and feedback with HR and managers to stay on top of PIP progress.
• Employees are engaged and involved in the creation of their PIP. 
• Managers offer coaching and support to help their employees succeed. 
• Consistent, open communication is encouraged. 

PIPs don’t have to be scary — they can be tools for growth! 🌱 Get the ultimate guide to creating impactful performance improvement plans and empower your team to reach their full potential:

5 Steps to Create a Performance Improvement Plan

A PIP gives employees a concrete roadmap of goals to meet to resolve performance issues. When you approach PIPs as opportunities to coach your people, you can leverage them for performance improvement, too. Professional coaching is a collaborative effort between managers and their team members that includes setting goals and sharing feedback. When managers act as coaches, employees are seen, heard, and supported, which helps them reach their full potential. 

Applying a collaborative coaching strategy makes for a far more effective PIP process that truly works as a performance improvement tool. Take these steps to create PIPs that spark progress instead of panic.

1. Gather, Analyze, and Interpret

Before developing a performance improvement plan, managers must first gather, analyze, and interpret the employee’s past performance data. These insights allow managers to uncover underlying performance gaps and hone in on individuals’ key strengths and weaknesses. 

Performance issues that may warrant a PIP include but aren’t limited to:

• Poor time management or scheduling of work priorities
• Lack of understanding of the job’s outcomes/expectations
• Failure to meet goals even after additional training
• Hours worked or attendance issues

Once these issues have been identified, managers can create a detailed plan to improve poor performance. They can utilize employee KPIs to measure improvement and determine the length of the PIP. Setting these standards allows managers to focus on aligning employee behaviors with measurable factors linked to business success.

2. Set Clear Objectives

Managers should strive to be transparent in order to be effective coaches and create effective performance improvement plan processes. Be specific about the issues the performance improvement plan is designed to address. Discuss exactly what the employee will do to work toward their PIP goals.

Start small with two to three objectives that the employee should focus on for the duration of your performance meetings. For example, if an employee has trouble completing some daily responsibilities, you might set a goal for the employee to prioritize those tasks and complete them consistently throughout a 90-day PIP.

But don’t just stop at goal-setting — give continuous feedback to your employees. It’s a welcome strategy: 83% of employees want your feedback regardless of whether it’s positive or negative. Make sure your feedback is specific and timely to help employees successfully meet the objectives of their PIP. For example, if your employee is struggling to manage tasks, suggest designating time to work on each task on their daily calendar.

3. Open the Floor

Being an effective leader for your employees requires both encouragement and empowerment, especially when they’re struggling. During performance improvement meetings, employees are likely to have a lot of input, questions, and feedback. It’s important for HR managers to listen to what they have to say and encourage them to ask questions and share their opinions.

Remember, coaching is a two-way street. In the end, it takes both the manager and the employee to be fully dedicated to improving performance.

4. Document Progress

Once objectives have been set, sit down with your employee to document an action plan. HR managers need to ensure that specific, measurable performance goals are included to aid employees throughout their improvement process. As the performance improvement plan proceeds, managers can view and follow the employee’s progress to determine if goals are being met according to schedule.

5. Monitor and Follow Up

A PIP is not a one-time evaluation but an ongoing process. Set check-in meetings with your employee throughout their PIP. By regularly checking in with the employee, you can determine if additional critical feedback is needed or if the PIP is having a positive impact.

As employees continue on their path to improvement, offer positive reinforcement along the way to show your support and commitment to helping them reach their goals. When providing critical feedback, propose an objective. For example, if your employee has trouble managing their tasks, ask them to list six top-priority tasks to complete each day.

As you continue to monitor your employee’s progress, provide specific employee feedback throughout the process. For example, “I can see that by organizing your top priority tasks for the day, your productivity has increased by 20%. Keep up the great work!” 

Recognition and encouragement are beneficial for engagement, so it follows that recognizing the accomplishments of employees on a PIP can boost engagement. Make sure your employees understand what you expect and that you’re there to guide them toward their path of success.

Employee Performance Improvement Plan Template

This PIP template outline helps ensure you create an actionable, effective plan that encourages employees to take ownership of their performance outcomes. 

Proactive Performance Management Software

At ClearCompany, we are committed to ensuring that your managers have the tools they need to achieve top productivity and engagement on their teams. Our modern Performance Management software gives managers insight into their employees’ work so they can identify strengths and weaknesses and provide real-time feedback. With performance records, managers can spot performance trends and help employees reach their full potential.

Ready to learn more about how ClearCompany enables better performance improvement plans? Sign up for a personalized demo of our Performance Management tools today.