How to Create & Implement a Performance Improvement Plan

TL;DR: Performance improvement plans (PIPs) provide managers with a chance to coach underperforming employees and help them achieve their full potential. However, they require careful planning and execution or risk making performance issues worse, dampening morale, and even causing staff to leave. This playbook will show you how to develop a meaningful and effective PIP that supports development and drives positive change.

People-first companies want their employees to succeed and to feel like they are progressing and thriving. That means it can be difficult to know what to do when a team member stops meeting expectations and responding to feedback. To support your employees in getting back on track, a performance improvement plan (PIP) may uncover the underlying causes of suboptimal work and help employees find their footing again.

While PIPs can affect positive change, they’re also tricky to navigate. There is a chance that, if employees don’t understand why their manager is suggesting an improvement plan, the relationship can become uncomfortable or damaged. Team leads have to plan each stage of a PIP carefully to maintain trust and support their team properly.
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What is a PIP (performance improvement plan)?

A performance improvement plan is a document that outlines an employee’s areas of growth and what they can do to improve. PIPs are most commonly used to address ongoing issues where the team member in question hasn’t shown significant improvement after several rounds of feedback, guidance, and coaching. For instance, you might implement a PIP for an employee who consistently misses deadlines, fails to follow company policies, or displays unprofessional behavior.

Performance improvement plans usually include:

A description of the performance issues
Specific goals for improvement and a timeline for achieving them
The resources and support the organization will offer
What will happen if the employee does or doesn’t make meaningful progress

The main aim of a PIP is to allow the team member to address performance issues and succeed in their role. Although it may be a precursor to a formal warning, a change in that person’s role and responsibilities, or even termination, it shouldn’t be treated as a form of disciplinary action.
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The benefits of a performance improvement plan

When implemented effectively, PIPs show employees that you’re invested in their success and are willing to provide them with the support they need to thrive. This can motivate team members to improve their performance and fosters a supportive work environment. PIPs may also bring the following advantages:

Greater transparency and fairness as these are based on objective, specific, and measurable goals and milestones.
Lower turnover as companies retain talent they might otherwise lose due to performance issues.
More clarity and therefore less frustration over why some individuals aren’t eligible for raises or performance bonuses at certain moments.
Increased levels of feedback, which can quadruple engagement levels.

Two professionals having a conversation in a casual work environment. — *Performance improvement plans (PIPs) can make your rewards management process more transparent.*

Are there any drawbacks to PIPs?

Although PIPs can be effective, they have some limitations and disadvantages. It’s important to be mindful that they have the potential to:

Cause further demotivation if an employee feels singled out or unfairly treated.
Be ineffective when the causes of poor performance are beyond the team member’s control.
Negatively impact morale if individuals feel anxious about being put on a PIP.

Use this playbook if you have an employee who’s struggling in their position and hasn’t responded effectively to feedback and coaching.
For instance, you might consider a PIP if you’ve discussed the team member’s areas of growth in previous performance reviews but haven’t observed any significant progress.

Performance improvement plans are especially helpful when you’re managing an individual who doesn’t seem to understand why they’re underperforming. The PIP can provide them with specific direction and enable them to understand where to focus their efforts. To pinpoint where employees need more clarity or where they are perhaps overestimating their abilities, you could ask them to write a self-assessment.

Performance appraisal data

Appraisal forms enable you to evaluate an employee’s performance over time. These could comprise data ranging from sales figures and targets to client approval ratings and attendance levels. The data you collect is ideal for identifying areas of growth, and helps you to set measurable goals for improvement. The performance metrics you document in evaluations can also act as an effective basis for measuring an employee’s future progress with a PIP.
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Communication tools

Clear, consistent, and ongoing communication is vital to an effective PIP process. Managers need to keep reports informed and provide them with regular feedback so they feel motivated and stay on track. That’s why it’s essential to invest in people enablement software like Leapsome. To facilitate those discussions, our Meetings module allows you to structure conversations with employees and send them a summary of what you talked about, along with key action points. Combine that with our modules for Instant Feedback, Learning, and Reviews to share continuous assessments, custom learning paths, and transparent performance review data.
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Planning and tracking software

Writing a PIP is easier if you’re using software like Leapsome to create development plans, set deadlines, and track progress. Our management, tracking, and reporting tools reduce the risk of errors and provide a deeper insight into employee performance. Plus, if your organization has pre-existing competency frameworks, you can simply check what skills and expertise team members need to acquire to improve.

As PIPs are a last resort, the best strategy is to avoid them in the first place. Holding regular performance reviews can help you spot and address issues before they become bigger problems.
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Another way to prevent performance issues before they grow is to foster a feedback culture within your organization. That means colleagues feel confident about exchanging constructive criticism and have more regular, informal opportunities to improve.
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When discussing the reasons for a PIP, present employees with objective data and ask them how their performance impacts them, their colleagues, and the company. This may help them draw their own conclusions and understand why the plan is necessary.
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As many employees see PIPs as negative, respect their confidentiality and only include essential personnel in the process.’
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Collaborating with employees on PIPs will prevent it from appearing like you are imposing the plan on them. This can strengthen your relationship and help maintain trust.

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1. Evaluate employee performance

A PIP should be part of an ongoing review process and dialogue between an employee and their manager. Before you consider implementing one, you should have already conducted a series of performance appraisals over time, discussed any issues with your report, and documented them in detail. There should be clear evidence the team member has been performing below expectations and received related feedback.

It’s essential to evaluate an employee’s performance and talk about the possible implications with them before you consider further action. A PIP should never appear suddenly or before multiple rounds of feedback have been exchanged.

“The greatest pitfall I've seen with performance improvement plans is when they’re a surprise. Managers don't always take the time to provide feedback and coaching on a consistent basis, or they get frustrated with the lack of change and want HR to jump to a PIP.

In these cases, I've rarely, if ever, seen an employee successfully complete a PIP and continue to succeed in the company. They’re typically incredibly demotivated.”

— Ayanna E. Jackson, Career & Leadership Consultant

💬 Never leave too much time between check-ins
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Leapsome allows users to schedule and manage review cycles, so team leaders will always be up to date with employee progress.
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👉 Learn more

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2. Identify the root causes of issues

The next step is uncovering the underlying reasons behind the employee’s lower-than-expected performance. Depending on the cause, you may angle their PIP in a different way. For instance, if a team member lacks motivation because they don’t consider their work meaningful or important, you might set them tasks that demonstrate how their role contributes to the bigger picture. On the other hand, if an employee displays unprofessional behavior toward clients, you might provide them with a series of communication training courses.
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3. Determine clear goals for improvement

Setting specific aims is critical to the success of a PIP. This helps everyone involved in the process to understand what they need to accomplish and how you’ll measure progress. Ideally, you should set SMART goals, which are:

Specific
Measurable
Actionable
Realistic
Timebound

For example, a sales agent that is repeatedly not hitting their monthly target might be given the initial goal to reach 70% of the target, with a timeline to improve that percentage month-by-month. There’s no ambiguity about what success looks like in this instance, and having such clear aims will give the individual a sense of purpose and direction.

Team members may feel more positive about their PIP if you work on their goals collaboratively. That way, you’ll give them more ownership and accountability over the milestones they’re meant to reach and the plan overall. According to Gallup, one of the five conversations that drive performance is one in which managers and employees ”collaboratively set goals that stretch employees to achieve their best performance” and “collaboratively define what success looks like in the individual's role and connect that success to the employee's goals.”
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4. Decide on training & support

To show staff that you’re invested in their development and want to give them the best chance of accomplishing their PIP, you have to play an active role in the process. That means offering team members whatever resources they need to achieve their goals. You might include a combination of the following:

Training and development programs
Coaching and mentorship
Technology and equipment
Review and feedback sessions
Counseling

If your company has a pre-existing framework for training and development, you can refer to it when crafting a PIP. Imagine your employee needs to undergo sales training to help them close a higher percentage of deals. You should be able to look at your usual development strategy and see what training sales staff usually need to reach an optimal level of proficiency.

🪜 Show employees how to take their performance to the next level
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Leapsome’s Competency Frameworks visualize all possible development pathways through your organization.
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👉 Learn more

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5. Create an achievable timeline

One resource you should never overlook is time. Employees will likely still have many of their original job responsibilities to consider alongside their PIP-related tasks. Plus, no matter how well you handle the process, most people will experience some extra stress and anxiety when they know they’re having performance issues and need to improve.

That’s why it’s essential to account for timing in PIPs and either create extra room in the employee’s timetable or break the plan into manageable chunks. You should establish exactly what you expect to happen week by week and consider the employee’s other obligations.

Additionally, you should establish a formal deadline for the PIP so the team member has an idea of how long the process will take. They may be more motivated when there’s a clear end in sight. You also need to communicate who will decide on the next steps so there’s no confusion when the performance improvement plan comes to a close. If you have to extend the PIP or even introduce more disciplinary measures, you don’t want the employee to mistakenly believe they can negotiate.

An infographic showing all the stages involved in creating an effective performance improvement plan.

Implementing a PIP

Once you’ve created a PIP with your employee, you need to check in with them regularly, monitor their progress, and exchange continuous feedback. There may also be unforeseen circumstances that require you to adjust the plan. For example, if the team member is absent with sickness for more than a couple of days, you may need to extend their PIP’s deadlines.

A manager and their report having a check in during the implementation stage of a PIP. — *A successful performance improvement plan requires managers to check in with their reports regularly.*

That’s why it’s best to arrange a series of regular meetings during the implementation stage. These can be opportunities to check whether the employee is on track and provide them with extra guidance. However, feedback doesn’t only have to take the form of constructive criticism — you should also celebrate their successes and cheer them on.

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Following up on performance improvement plans

After the deadline for a PIP has passed, your next steps depend on the outcome:

Meeting or surpassing the goals — If the employee achieved all the objectives you defined together, they can likely resume their normal responsibilities and you can discuss further development opportunities. However, you may want to monitor their performance for a period afterward to help sustain and expand on their improvements.
Falling short of the aims — The employee may have made progress, but still not fulfilled all the aims that were outlined in the PIP. In this case, you may extend the improvement plan and continue to offer resources and support.
Showing no or few signs of improvement — When the employee has made minimal progress or failed to meet the PIP’s aims, consider probation or even termination. Assuming you ruled out personal difficulties to begin with, this is a sign that this person’s priorities no longer align with your organization’s, and they may be happier elsewhere.
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How to support employees

Since PIPs come into play as a result of less-than-optimal performance, it can be daunting for reports to learn their manager wants to put them on one. They may lose morale or worry about termination. However, the following advice can help people to make the best out of the experience:

Help them maintain a positive attitude — Show employees you’re on the same side. If you’re putting them on a PIP, it means you see potential in them and want to help them improve. Explain that solving issues together will help them unlock their full potential and grow as a professional.
Encourage them to seek support when needed — When employees discover they’re not performing as well as they’d hoped at work, it can cause low mood, stress, and anxiety. These are all natural responses, so let them know what resources are available and how to access them. Be sure team members know to talk to their manager or another leader if they feel demoralized or overwhelmed by any aspects of the PIP or need to consult mental health support.
Show them how to use the experience to develop — It may be helpful for the employee to see their PIP as a step in their development toward future goals. Although they may not currently be where they’d ideally like to be, everyone faces setbacks, and they’re still progressing on their chosen career path.
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The benefit of performance management software

Performance improvement plans shouldn’t be taken lightly. If you’re considering implementing one within your organization, ensure you have all the tools you need for a clear, fair, and transparent process.

Holistic performance management software like Leapsome can support your people before, during, and after a PIP. You can uncover signs of struggling employees quickly with our Goals and Reviews modules. Then, use our Meetings module to collaborate with employees on a plan that works for everyone. If you use our Competency Framework feature, you’ll have a basis for any development plans you create. Finally, you can use the Learning, Reviews, and Instant Feedback modules to guide employees and lead them on the path to success.
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🚨 Address and resolve performance issues early on
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Leapsome’s Instant Feedback, Reviews, and Meetings modules allow managers to maintain open communication with all their reports.
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👉 Book a demo

What you should include in a performance improvement plan (PIP) depends on your business and the employee. However, PIPs usually include the following:

Details of the performance issues
Specific aims for improvement (and a timeline for achieving them)
Available resources and support
The consequences if the employee doesn’t make meaningful progress with their PIP objectives

The exact period a performance improvement plan should last depends on the severity of the issues at hand and your company’s internal policies. However, it‘s usually between 30 and 90 days, which allows enough time for meaningful progress but isn’t so long that it becomes discouraging or draining for the employee.

Yes, a performance improvement plan can lead to termination of employment. Although the aim of a PIP is to help employees improve their performance, companies may consider disciplinary action if it isn’t successful. The PIP may also serve as proof the company had just cause for termination.