How to Effectively Use a Performance Improvement Plan

Posted on July 16, 2018

Performance Improvement Plan

Often when discussing employee performance issues with clients, I ask them if they want to go the progressive discipline route with this employee or do they want to do a performance improvement plan (PIP). Usually when I ask this question I get a confused, look: “what’s the difference between a verbal or written warning and a PIP?”

A PIP is more of a commitment from the manager to help their employee improve, not just a way to begin documenting the termination process.

Performance improvement plans (PIP) are best used in situations where: 

• There an actual performance or behavioral issue that can be documented with a list of performance issues, including dates, specific data or detailed explanations, and any previous counseling given to the employee. 
• The manager is committed to helping the employee improve rather than beginning the process of termination. 
• The performance issue can be improved through a formal plan. Quantifiable problems such as sales goals, quality ratings and quantity objectives are better suited to a PIP than issues suchs as insubordination. 

The employee has not received proper training to succeed and additional training goals can be set to help correct the oversight.

Effective elements of a PIP should include:

• How the employee’s current performance is unacceptable; 
• What acceptable performance levels are; 
• SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) objectives. Typical timeframes for PIPS are 30, 60, or 90 days; 
• Commitments from management on how they will assist employees in achieving their goals. This can include additional training and coaching; 
• Details on how often the manager and employee will meet to discuss progress; and 
• Clear consequences for not meeting the objectives of the plan. 

Once a PIP has been created and discussed with the employee it is now up to the manager to monitor the plan’s progression. The manager should ensure all progress meetings are scheduled and occur on time. Progress toward goals should be documented and discussed, seeking to identify why improvements have or have not been made.

If an employee responds positively an meets all plan objectives, possibly before the expiration date of the plan, the employer should formally close the PIP, recognize the employee’s success and allow the employee to continue employment.

If an employee is unable to improve or if his or her performance worsens, the PIP should be closed, and a possible reassignment, demotion or termination should be considered, based on the specific circumstances.

Properly planned and executed PIPs can be an effective way to retain an employee who may have potential but falls short in certain areas and can be an important piece of an employee discipline program.

Lauren Sims is the article’s author and the Director of Human Resources.

Whenever you require professional Human Resources or Payroll guidance to navigate the ever-changing landscape of California and Federal Employment Laws & Regulations, contact us for a no-obligation consultation.

eqHR Solutions provides professional, tactical and strategic human resources support; ADP payroll product implementation/training and payroll processing services for businesses throughout Southern California.