Surprisingly enough, employee performance improvement plans have nothing to do with general performance improvement of your average employee. Instead, they help problematic employees come up to a company standard. What a manager is saying to the employee with a performance improvement plan is, “You’re on notice. You have to improve if you want to remain here, and these are the guidelines to achieving that goal.”

A PIP (also called a performance action plan) can be used to give struggling employees the opportunity to succeed while still holding them accountable for past performance. It’s critical to allow for an open dialog and feedback from the employee to help determine whether the employee has been provided all the tools and resources necessary for him or her to be successful.

PIPs may be used to address either failures to meet specific job performance-related issues or behavior-related concerns. They can lead to several different outcomes, including improvement of overall performance, the recognition of a skills or training gap or possible employment actions such as a transfer, demotion or termination. They can also be a tool to communicate performance expectations.

How does a PIP work?

The first step is for a supervisor to document the areas of the employee’s performance that need improvement. Be objective, factual and specific, and provide examples. To develop the PIP, use an established format, ensuring consistency—thereby protecting employers should legal claims arise.

Here’s what to include in the format:

  • Employee information.
  • Relevant dates.
  • Descriptions of a performance discrepancy or gap.
  • Description of expected performance.
  • Description of actual performance.
  • Description of consequences.
  • Plan of action.
  • Signature of the manager and the employee.
  • Evaluation of a plan of action and overall improvement plan.

The second step is to develop an action plan for improvement. This may be adjusted based on employee feedback at the meeting. Making the process collaborative identifies areas of confusion or misunderstanding on the employee’s part and can encourage the employee to own up to the perceived deficiency.

The action plan should include specific, measurable objectives that are accurate, relevant and time-bound. Draw on the job description and HR policies to identify performance and behavior issues and expectations.

In a properly run company, a PIP does not have to be a prelude to a firing, although sometimes it may have to end this way. And it’s not suitable for employees who have shown egregious behavior, such as theft from the company. Rather, it’s a chance for a supervisor to give a struggling employee a chance to stay with the company.

The Society for Human Resource Management provides some resources to get you started, or you can give us a call, and we’ll help you set up a clear and consistent PIP policy.

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