performance improvement plan

How to Create an Effective Performance Improvement Plan

Want to build an effective team, retain high-performing employees, and make your business the best it can be? Implement a performance improvement plan.

At first glance, many managers may think that a performance improvement plan is only necessary as a form of discipline or to improve a glaring skill imbalance. But these plans can be used for so much more.

In this article, we help you understand exactly what a performance improvement plan is and how to implement it in your company.

Table of contents

What is a performance improvement plan?

performance improvement plan checklist

At its most basic, a performance improvement plan (or PIP for short) is a formal document that:

  • Defines an employee’s recurring performance issues and opportunities
  • Establishes goals they can work toward to build their skills
  • Sets a timeline for reaching said goals

Managers and HR departments often use PIPs to address an employee’s failure to meet specific job requirements or to correct behavior-related concerns.

In most cases, a PIP is a way to give an employee the opportunity to repair some aspect of their work activity before you let them go. But you can also roll out a PIP even when an employee is performing at their best or you see that they have the potential to do so.

In those cases, you’re not trying to build skills up to a basic level or rectify a behavioral issue. Instead, you’re trying to help the employee stretch, grow, and improve on a job well done.

When the performance improvement plan is rolled out in this latter manner, most businesses call it an employee development plan. Whatever name you give it, your goal is to help your employees improve the way they work.

Why use a performance improvement plan?

Coworkers working at shared in a community space

1) Improves engagement

The feedback and guidance you give in a performance improvement plan help your employees feel more valued and engaged in the business. It shows that you’re engaged in their growth and actively invested in seeing them improve.

This feeling motivates your team members to go above and beyond what you expect of them because they feel that they have a higher purpose — be it for their own well-being, the betterment of your clients and customers, or the success of your business.

2) Boosts morale

Creating a PIP for a disgruntled employee helps them build their skills, change their behavior, and also boosts morale — for the employee and for the team.

When your employees see that you’re willing to help them improve — rather than just firing them on the spot — they’ll be more likely to maintain a higher, and more stable, sense of overall morale.

With higher morale, your team will enjoy stronger bonds, a deeper sense of camaraderie, and a willingness to cooperate that wasn’t there before.

3) Raises job satisfaction

Engagement and morale are two important variables in the work-performance equation. Job satisfaction is another.

Rolling out a performance improvement plan gives employees something to work toward and provides a sense of fulfillment and enjoyment that may not have been there before.

4) Decreases turnover

As mentioned earlier in this article, creating a PIP for an employee is a way of helping them improve so you don’t have to let them go and then find someone to replace them (a.k.a. turnover).

When your turnover — and even your attrition — decrease, your team grows stronger, and your business improves. All of that from giving an employee the time and opportunity to improve the way they work!

How to create an employee performance improvement plan

performance improvement plan being discussed

1) Identify underlying issues

In this first step, try to identify and understand the underlying issues that the employee is facing.

You may have quality guidelines or standard operating procedures in place, but there could be fundamental obstacles that make those guidelines and standards difficult to achieve.

In other words, it could be more of a business problem than an employee problem. If you find that to be the case, don’t be afraid to address it right away and introduce a solution. Not only will the individual employee benefit, but your whole team will as well.

When you get to the core issue before you do anything else, the solution often presents itself making it easier to plan, write, and implement your performance improvement plan.

2) Talk to the employee

Before you start the process of creating a performance improvement plan, take some time to talk to the employee to see what’s going on.

This is a great way to get to the underlying issue they’re facing, and it can also help you understand whether the event that prompted thoughts of a PIP was a recurring thing or a one-time event.

If the latter, the situation may resolve itself and not require that you take any disciplinary action.

3) Set clear and achievable goals

There’s no way to know if your performance improvement plan is successful unless you set goals and benchmarks for your employee to meet.

These goals should be specific, clear, and achievable. In fact, it’s often better to set small, easy-to-measure goals rather than one or two big goals that are more difficult to measure.

Small, specific goals serve the purpose of providing a sense of accomplishment that isn’t there if you give the employee a main objective to shoot for without any intermediate steps (and successes to inspire them).

So, for example, avoid setting the goal for your employee to “get better at customer service.” They may wonder what better customer service looks like.

Instead, set small, clear, measurable goals — such as smiling, being patient, engaging in small talk, etc. — that add up to the kind of customer service you’re looking for.

4) Write your performance improvement plan

Woman writing her performance improvement plan

Now, it’s time to put pen to paper and write out the details of your performance improvement plan.

Be sure to include specifics, such as:

  • The performance issue you are addressing
  • The solution for improving
  • Goals to shoot for
  • Duration of PIP
  • Formal documentation of policies and standard operating procedures
  • Specific procedures put in place to deal with the issue
  • Team and individual responsibilities
  • And any other information that you and the employee need

Once you’ve finished composing the PIP, store the original in the employee’s personnel file. Then, make a copy and give it to the employee so they have something to refer to if they have questions or lose sight of their goals.

5) Monitor progress

After you turn the employee loose to work on the performance improvement plan, be sure to monitor their actions and behavior along the way.

Doing so can help you see if they’re making real progress, and it lets them know you’re serious about their improvement.

6) Review and revise the plan

During the writing of the performance improvement plan, you were encouraged to set a time limit during which the employee had the opportunity to work on and improve the issues involved.

Regardless of the duration, when that time period has elapsed, it’s time to examine the results.

Did the employee achieve the desired results? Did the PIP perform as intended? Was the issue resolved? Could the results be better?

Think of this as a repeat of step one, and try to get as full a sense of the underlying problem as possible.

If the employee has made progress, take the time to review and revise the plan so that they can continue improving. If the employee hasn’t made any progress, it may be time to investigate other options.

Improve employee performance with Sling

Woman working on her performance improvement plan

For your performance improvement plan to be successful, you must find time to focus on the details involved. Workforce management software, like Sling, can help.

The Sling app can help you carve out time during the busy workday to discuss, examine, build, and refine your PIP so that you can achieve the best results the first time through.

But that’s not the only thing Sling can do. With Sling, you can conduct all of your workforce management activities in one place instead of cobbling together separate apps that don’t integrate well with each other.

For more resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com today.

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