Navigating Performance Improvement Plans: A Comprehensive Guide for Managers and Employees

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Introduction

Many employees perceive receiving a Performance Improvement Plan (PIP) as a form of criticism or as something that came out of the blue. However, the aim of PIPs is not to degrade employees, in fact, it aims to help employees that are struggling with their roles.

Performance Improvement Plans are a great tool to ensure that the employees are reaching the desired goals or not. When PIPs are implemented and monitored effectively, they provide a valuable framework for both employees and managers to work toward success.

What is a Performance Improvement Plan?

Performance Improvement Plan, also known as PIP, at its core is a set of strategies or objectives that are designed to improve employee performance. These objectives are specifically designed by the manager to help employees meet their responsibilities of the job more efficiently.

PIPs are in a document format and they highlight the problems or drawbacks within an employee’s workflow, and the manager also includes their suggestions to tackle the situation. In general, PIPs are used to improve the performance of employees that are not meeting the company’s expectations. They are considered to be used as a last resort to get the employees right back on track before their termination. However, sometimes PIPs are used in a completely different way, such as preparing them for a new role.

Types of Performance Improvement Plans

There are two broad categories of a Performance Improvement Plan, one is the disciplinary and the other is the non-disciplinary type. As said earlier that PIPs are not always used to improve the performance of an employee, but it is also used for other reasons as well. The non-disciplinary type doesn’t include any disciplinary action, in that type the manager focuses on expanding the career horizon of the employee. The two categories are further divided into three types, and that includes:

Corrective Action Plan

This type of plan identifies and addresses the specific performance issues of an employee through training, coaching, or disciplinary action. The primary goal of a corrective action plan is behavior improvement and to facilitate performance, instead of enforcing punitive actions.

Developmental Plan

This type of plan provides relevant training and opportunities to employees so that they could grow in their current roles or they could be prepared for potential future roles in the organization. The primary goal of a developmental plan is to help the employee achieve their career and personal goals, and at the same time, also improve their performance.

Career Development Plan

This type of plan is considered to be a personalized roadmap that is designed for the employees so that they could achieve professional goals. The organization mainly focuses on helping employees develop skills that are needed to advance in their career path.
The Developmental Plan and the Career Development Plan are included in the non-disciplinary type.

Benefits of Performance Improvement Plans

If PIPs are implemented correctly, then it could lead to several benefits, such as:

Employee Retention Rate Increases

When an organization will invest in their employee, then that employee is most likely to stay loyal to the organization. Through PIPs, the employees whose performances are not up to par are given a second chance to work on themselves, and in this process, the manager also supports their employees. However, if we look at another scenario, if an employee’s performance is low and that employee is terminated by the manager, then that would create a bad impression of the organization, as well as the existing employees would feel insecure about their job. Performance Improvement Plans create a healthy work environment, which ultimately leads to an increase in employee retention rates.

Saves Time & Money

Every manager aims to minimize the cost and increase the benefits for a company. Experts say that hiring a new employee is twice as much costly than retaining an existing employee, and even if we ignore the cost, the time that is wasted in finding the ideal candidate is an additional non-monetary cost that the organization has to face. Through PIPs, managers tend to focus on the improvement of current employees, which saves the cost of firing an employee and searching for a new one.

Positive Outcomes

Since the primary goal of PIPs is to implement certain objectives that maintain a smooth workflow in the future, the short-term outcomes of these plans are also positive. Creating a Performance Improvement Plan also refers to setting an action plan for employees where the risks and rewards are clearly stated. In most cases, after conducting PIP, the performance of an employee usually gets better, which in turn helps the organization achieve its objectives more easily.

Effective than Reviews

Even though the manager aims to help the employees and tries to make them understand their drawbacks and pitfalls, still many employees tend to take reviews as destructive feedback. The worst part is that the feedback of managers is usually ignored and the employee works exactly the same as before. On the other hand, PIPs have an entirely different story, the employees are given objectives that they need to achieve in a prescribed time, and if they fail to do so, they would have to face punitive actions from the managers. Therefore, PIPs are highly effective when compared with reviews.

Fosters Accountability

The best part of PIP is that an employee is fully held accountable for whatever they do. Managers just set realistic objectives for the employee, and the employee simply has to fulfill those objectives within time. From the start to the end, the employee is accountable for every task, which automatically fosters accountability. This would also increase their decision-making power and time-management skills

Drawbacks of Performance Improvement Plans

Everything has its own pros and cons, some of the drawbacks of PIPs are:

Time Consuming

Some employees respond quickly under PIP, while some employees take time to get hold of things. Since PIP includes an additional task on the checklist of an employee, in the beginning, the employee might face difficulties in understanding the tasks and/or managing them effectively. Furthermore, the additional tasks might distract the employee from their regular tasks. Therefore, the manager needs to state the objectives clearly and realistic.

Hostile Responses

Not everyone takes criticism positively; some even respond aggressively or in a hostile manner. These kinds of employees bring negativity to the workplace by exhibiting toxic traits, such as taking continuous leaves to look for a job, hindering other employees, reducing morale, etc. This not only makes PIPs lose their credibility, but it also creates a negative work environment.

Manager’s Perspective

Since every Performance Improvement Plan has two perspectives:

• Manager’s Perspective
• Employee’s Perspective

Lets dive into both perspectives in detail.

When to Implement Performance Improvement Plans?

Managers implement PIPs when they want to boost the efficiency of employees which could create a ripple effect across the organization. As said earlier, PIPs are used for several reasons, and they are:

The most common reason is when the employee is not performing up to the organization’s expectations. When an employee is not performing well, managers do not instantly put them on PIP, instead, they make several attempts to correct their behavior, but when none of their attempts work, the final warning that is given to them is PIP, and if they again fail to meet the organization’s expectations, then the last option left is termination.

Another reason to put an employee on PIP is when they are engaged in unprofessional or inappropriate behavior. Implementing a PIP could help them understand the morals and ethics of the workplace, which helps them address the issue so they can be mindful of their behavior in the future. However, some inappropriate behavior leads to immediate termination, so the manager needs to know where the boundary lies.

A PIP is implemented when an employee is unable to follow standard protocols set by the organization. A PIP gives them the ultimate guidance on the processes which need to be followed and the consequences of it when not followed.

A PIP is also implemented when an employee is negatively impacting the business because of low productivity. This is also one of the most common reasons for the usage of PIPs. When an employee creates more trouble than profit for the organization, the manager acts proactively to put the employee back on his track.

Tips for Writing an Effective Performance Improvement Plan

While writing a PIP, the manager has to sound precise and unbiased, and they also need to maintain a professional language, in order to create an effective PIP, the manager must follow these tips:

Tip #1 – Make the ‘Why’ Clear

Generally, people react better when they understand the ‘why’ clearly. Mentioning what caused the manager to put a PIP on the employee can make the employee understand the reason more clearly. This would also give the employee a chance to look back at his performance and see how much he is progressing.

Tip #2 – Make SMART Goals

Always make SMART Goals.
S – Specific: Be specific on what needs to be achieved.
M – Measurable: Create goals that could be measured or are quantifiable.
A – Attainable: Set goals that are accessible and easily attainable with available resources.
R – Realistic: Never set those objectives which seem nearly impossible to achieve.
T – Time-Bound: Set a time limit for every objective.

Tip #3 – Include Supporting Resources

The manager must make one thing clear that PIPs should not be used as a means to punish the employees, in fact, they are implemented so that an employee could enhance their productivity. Keeping that in mind, if a manager is suggesting the employee to attend any sort of training, conference, workshop, etc., then the manager should also include some supporting documents so that the employee could know beforehand what the event is going to be about and what will be its outcomes.

Tip #4 – State the Results

A PIP document must include the outcomes after the completion of the plan. The manager must include what consequences the employee will have to face if the employee fails to meet the criteria, and they should also be clear that after the PIP’s probation is over, what outcomes they will receive. The manager shouldn’t forget to include the dates of check-ins and what milestones are expected to be seen accomplished by the employees.

Steps to Write a Performance Improvement Plan

While writing a PIP, a manager must include the following steps:

Step #1 – Considering the Appropriateness of PIP

The first step of writing a PIP is to confirm whether it is the right tool for the task or not. The manager does not have to impose a PIP on an employee, they first need to have a conversation with the employee regarding performance and the organization’s expectations. If conversations and feedback have not yielded any positive results, then a PIP should be used as a final attempt to improve the productivity of an employee.

Step #2 – Create the Plan

Every employee’s productivity level is different, so the manager should make sure that while creating the plan, every plan is customized according to the employee’s productivity levels, interpersonal skills, roles, level of nonseriousness, etc. The plan should highlight all the necessary details, such as:

• Areas of Concern
• Observations & Previous Discussions
• Counseling
• Expectations or Performance Goals
• Recommended Changes
• Resources
• Management support
• Progress checkpoints
• Timeline and milestones
• PIP period expectations and consequences
• Acknowledgement

After the entire document is created, the manager must review it thoroughly to check whether any changes are needed or not. It’s advisable to send the document for review to another person.

Step #3 – Explain it to Employee

After creating the plan, never impose the plan directly on the employee. The manager must explain the entire PIP to the employee. The main goal is to explain every aspect of the document to the employee so that he is clear with the objectives and the consequences as well. The manager can also relate to the document if any issue arises in the future.

Step #4 – Monitor

The second last step is to monitor the plan. A PIP needs to be monitored closely by the manager, or else the desired results will not be achieved. The manager doesn’t have to sit back after creating the plan, they have to keep supporting and motivating the employee and keep giving him feedback. The manager is also expected to have honest conversations with the employee, so that if the employee is facing any sort of issue, that could be addressed and solved quickly.

Step #5 – Assess the Results

After the PIP probation period is complete, then it is the manager’s duty to assess the results. They need to check whether the desired results were achieved or not. They also need to look closely at the progress report of the employee.

Employee’s Perspective

How to Respond to a Performance Improvement Plan?

When an employee receives a PIP, they usually get offended. However, instead of taking it negatively, the employee should perceive this as an opportunity to polish their skills. Here are a few ways an employee could react to a PIP:

Don’t Panic

When the manager puts an employee on PIP, their first reaction might be panic. Multiple thoughts would be coming into the employee’s mind; however, the employee should remain professional and should not think about any negative outcomes. The employee should take it in a good way considering that they have been allowed to improve their skills.

Take it Positively

Working on PIP with a positive attitude can help the employee reach the goals more easily. With a positive and determined mindset, the manager will also take the employee’s suggestions seriously.

Ask for Help

Many employees are afraid for asking for help from the manager, thinking that it might instigate the issue, however, that is not the case in PIP. Asking for help from the manager can provide valuable insights on how to fulfill the job responsibilities and that also shows that the employee is seriously working on enhancing his skills.

Setting Own Goals

The manager is going to give the employee an ultimate goal, which may or may not be broken down into steps. In this case, the employee should make their own goals, maybe daily or weekly goals, this helps the employee work hard towards achieving the goal and completing the deadline more easily.

Check in Regularly

Even though managers monitor the employee’s progression closely, but when an employee regularly shows the manager their progress update, it shows the manager that the employee is dedicated to work. Checking with them regularly could also help the employee gain valuable insights from the manager’s perspective, which could be incorporated into the employee’s methods.

Conclusion

Performance Improvement Plans (PIPs) are a great way to ensure that workplace goals and objectives are met. When implemented and used correctly, it could be helpful for both employees and managers in achieving the desired outcomes.