What is Performance Improvement Plan?

Meaning & Definition

Performance Improvement Plan

A Performance Improvement Plan (PIP), also known as a Performance Action Plan, is a structured and documented process used by employers to help employees whose job performance is not meeting the expected standards. The primary purpose of a PIP is to provide employees with a clear path for improvement, set specific goals and expectations, and offer support and guidance to help them achieve the desired level of performance. PIPs are typically used when an employee’s performance issues are serious or persistent and other informal methods of correction or coaching have not been successful.

Key components of a Performance Improvement Plan typically include:

• Clear Objectives

The PIP outlines specific performance goals and expectations that the employee must achieve within a defined timeframe. These goals should be realistic, measurable, and achievable.

• Timeline

A PIP includes a defined timeline during which the employee is expected to meet the set goals. The duration of a PIP can vary but is often 30, 60, or 90 days.

• Feedback and Support

The plan should specify the level of support and feedback the employee will receive during the improvement period. This may include regular meetings with a supervisor or mentor to discuss progress.

• Resources and Training

If additional training or resources are necessary to help the employee improve, these should be identified in the plan.

• Consequences

A PIP may outline the consequences of failing to meet the established goals, which can range from additional training or coaching to more severe actions like demotion, reassignment, or termination.

• Signatures

Both the employee and the manager typically sign the PIP to acknowledge their understanding of the plan and their commitment to its implementation.

Performance Improvement Plans serve several important purposes:

• Clarity

PIPs provide a clear and documented path for improvement, ensuring that employees understand what is expected of them and how they can achieve better performance.

• Legal Protection

By documenting performance issues and the steps taken to address them, PIPs can help protect employers from legal disputes related to termination or discipline.

• Employee Development

PIPs can offer employees an opportunity to improve their skills and performance, potentially leading to career growth within the organization.

• Accountability

PIPs create accountability for both employees and managers. Employees are held accountable for achieving the set goals, while managers are accountable for providing support and feedback.

It’s important to note that while PIPs are a tool for addressing performance issues, they should be used in a fair and consistent manner. Employers should ensure that the goals and expectations set in the plan are realistic, and the process should be carried out in a way that does not discriminate or unfairly target specific employees. PIPs should be approached as a way to facilitate employee growth and improvement rather than as a punitive measure.