Performance Improvement Plan Template & Guide [Free Download]

With a performance improvement plan (PIP) template, you have a tool to create an individualized, action-orientated, step-by-step plan to improve the performance of employees who are either not meeting their manager or supervisor’s expectations or would benefit from a more structured action plan. 

Contents
What is a performance improvement plan?
Why use a performance improvement plan
When to implement a performance improvement plan
When to avoid a performance improvement plan
The benefits of a performance improvement plan
The disadvantages of using a performance improvement plan
Checklist: How to create a performance improvement plan
Free performance improvement templates
How to use metrics to track PIP objectives
Performance improvement plan examples
Performance improvement plan sample
Tips: How to effectively deliver a PIP to your employees
FAQ

Download the performance improvement template as a Word doc, and Excel sheet, or an editable PDF. Read on to discover how HR can implement and support the use of PIPs for positive results.

What is a performance improvement plan?

A performance improvement plan (PIP) is a document that helps employees understand their skills, identifies training gaps, and sets clear expectations for job roles. It is typically used when an employee is failing to meet job expectations. However, if implemented correctly, it can be a positive tool to align management and employees, improving job performance as well as job satisfaction.

Each PIP is unique to the needs of an employee. It identifies and lists gaps as well as the action steps that will lead directly to improvements aligned with job roles and expectations. This is not a one-size-fits-all approach and should be created with input from managers and supervisors, the employees themselves, and HR. 

HR’s role includes:

• Determining whether a PIP is appropriate for the situation
• Working with managers to create the PIP to prevent bias and achieve the best outcomes
• Guiding employees and managers throughout the process
• Regularly check that targets are being met, as PIP objectives should always include deadlines to ensure accountability.

Why use a performance improvement plan

Traditionally, a performance improvement plan (PIP) has been used as a last resort when an employee has failed to meet job performance goals. This has led employees, managers, and even HR professionals to view PIPs as the first step toward firing someone.

However, a PIP can also be a powerful communication tool that supports a growth-mindset culture of continuous learning and improvement based on a clearly defined process that identifies gaps between employee skills and performance and job roles. This gives employees a clear path on how to improve the quality of their work and assists them in goal setting and meeting growth numbers. It’s also a valuable tool for anyone who transitions into a new role.

 If PIPs are only used to address performance failures, there will always be a negative connotation associated with identifying performance gaps instead of promoting a positive culture that supports personal improvement.

On the other hand, employees will accept and expect PIPs if it’s the organization’s culture is to implement a performance improvement plan as soon as a performance issue is identified and employees are empowered to take control of their improvement.

Bear in mind that productive employees who feel like they are adding value to their organizations are happier employees. When someone knows what is expected of them, they can naturally be more productive. Gartner research reveals that employees want their value recognized on a human level. 

Purpose-driven work, a strong sense of community, and deeper relationships are important. If a valued employee is not meeting expectations, you have an ideal opportunity to turn the situation around through a targeted PIP that identifies the issues and highlights a plan of action.

What an effective PIP should entail: Tips from an AIHR’s subject matter expert

• Ensure that a PIP is the right solution for the performance issue. In some cases, poor performance is the symptom of other underlying problems. For example, an employee may be experiencing personal issues that impact their performance. Before starting a PIP, ensure that you understand the reasons for non-performance and that the objectives of the PIP align with this.
• PIPs are done with the employee, not to the employee. This should be a co-created plan of action based on mutually agreed objectives, with clear timelines and milestones to achieve. For any PIP to be successful, the employee must actively participate in the process.
• Be clear about the outcomes, both good and bad. A PIP should also clearly articulate the outcomes of successful or unsuccessful implementation. If the objectives are achieved, when will the next review take place? If the goals are not achieved, what are the next steps that need to be taken? Clarity upfront is critical for fair and transparent communication. 
• Create an environment that supports the PIP. Creating a supportive environment and the tools required for success is just as important as the plan – a PIP is not an ‘easy way out’ for the manager or organization. Often, employees don’t have the resources or support they need to reach their performance goals, and the organization must equip them with it.

Dr. Marna van der Merwe, HR Subject Matter Expert at AIHR

When to implement a performance improvement plan

There are few things more challenging for most managers than addressing poor performance. However, hoping that performance will improve without a plan of action rarely (if ever) works. This is where HR can play a valuable role in supporting both employees and managers.

The key is to understand if a PIP is appropriate and will add value. Start by asking these questions:

1. Is the employee’s performance impacting the performance and attitudes of colleagues?
2. Has the employee’s performance radically changed, or have they always missed performance targets?
3. Is the manager only trying to create a paper trail that will support the dismissal of an employee?

The PIP must be an individualized plan. So, for example, if a valued employee has historically been a good performer and is suddenly missing deadlines or seems distracted, a PIP could identify the problem so that it can be quickly resolved. It’s a targeted approach that will only identify the areas for improvement, acknowledging areas where the employee is performing well.

A PIP can also be extremely valuable if an employee does not clearly understand their job or what is expected of them or if they could be adding more value with the right support.

When to avoid a performance improvement plan

• A PIP should never be used as a tick-box exercise. A performance improvement plan takes a lot of effort and dedication to create and implement and should only be used when there is a belief that an employee’s performance will improve. Plus, if your other employees see PIPs being used as a termination tool, they will not only fear the process, they won’t respect measures designed to genuinely and collectively improve performance and outcomes for everyone’s benefit.
• PIPs can’t solve personal issues between employees and managers. Managers and employees do not need to be friends, but they do need to respect each other and be able to work with each other. If there is a personality misalignment, the solution may be to move the employee to another team or role where they are a better fit (and then a PIP can be a great tool to quickly get them orientated in their new role with clear expectations). Unfortunately, if an organization’s direction has changed and the employee’s competencies are misaligned with the new job requirements, a PIP will not be of any significant benefit.
• A PIP should not address matters left unattended for lengths of time. Some employees join organizations as mediocre performers, and this steadily decreases to under-performance. If this situation is quickly addressed, you could turn it around. However, if left unattended for years, your chances of sudden success are slim (to non-existent).
• A PIP is not designed for serious incidents. Such as theft, violence, or gross insubordination.

The benefits of a performance improvement plan

1. They are fair and promote good behaviors: Not every employee realizes they are not performing well, particularly if they don’t understand exactly what is required of them. PIPs reassure all employees that they will be provided with a fair process, feedback, support, and an opportunity to improve if there are performance issues rather than being involuntarily terminated without warning.
2. PIPs are empowering: Performance improvement plans allow employees to take ownership of their behavior and demonstrate their commitment to improving and correcting problem areas. In some cases, the employee becomes a stronger performer thanks to a high level of accountability that is engrained in the culture.
3. Reduce liability: If the employee’s performance doesn’t improve and termination occurs, an authentic documented process for improvement decreases the risk of litigation.
4. Save time and money: Gallup has found that poor-performing employees cost the world $78 trillion in lost productivity. Addressing performance issues quickly and effectively will boost your bottom line, and when your focus is on improving performance instead of letting employees slowly burnout and leave, you reduce turnover.
5. Improve communication: According to data from Clear Company, 86% of employees believe bad communication is driving poor performance, and this lack of transparency begins with the C-Suite. A culture that supports and consistently uses PIPs is naturally transparent, however, as all expectations are documented, communicated, and managed.
6. Better job roles: The act of creating a PIP often highlights where job roles and outputs are not clearly defined.

The disadvantages of using a performance improvement plan

1. They take time and effort: As mentioned, PIPs are not one-size-fits-all. They demonstrate a clear process is in place, but each plan must be individually designed with specific outcomes and objectives. This means they take effort – well worth it if used correctly, but a waste of time and resources if used incorrectly.
2. PIPs can distract from the regular workflow: However, the long-term productivity gains of correcting performance and identifying and aligning where there may be gaps in what an employee thinks their role is versus what management expects can be enormous.
3. Performance conversations can be uncomfortable: HR has an important role to play in this regard, first by laying down clear expectations around what a PIP is and what it can achieve (in a positive light) and then in supporting managers with the right tools and talking points to guide the process. Performance improvement plans can be very successful – and very unsuccessful if managers do not follow through or support the employee who is under performance review. Again, this should not be another tick-box exercise.
4. They can be viewed negatively based on past experiences: Once an employee is put on a performance improvement plan, there’s a risk that they (and their colleagues) will interpret it as the first step towards termination. When this happens, they will not accept or absorb feedback. Instead, they will feel that they are in an antagonistic situation and may become toxic or resign. How you frame PIPs within a culture of self-improvement will determine how employees view PIPs.

Checklist: How to create a performance improvement plan

Use this simple checklist when creating your performance improvement plan:

1. Assess whether the performance improvement plan is necessary 

PIPs take time to design, implement and follow and they distract from regular workflows. 

Ask yourself: 

• Is the employee valued?
  Can the performance issue be resolved? 
• Will the outcomes be positive? 

If these questions answer ‘yes’, then a performance improvement plan may be your best bet.

2. Involve the employee

Performance improvement plans should empower employees. Involving them in the entire process is an important step because it gets their buy-in from the beginning. They are invested in the outcome of the PIP and in meeting the objectives and deadlines you collectively set.

Do this: 

Outline the expected performance of a specific role, highlight where there are areas of improvement required, and ask the employee how they believe their performance can be improved, as well as what support they believe they need.

3. Draft the performance improvement plan

HR plays an important role in assisting managers to draft the improvement plan. Help managers to be detailed and specific when drafting the PIP:

• Define what is acceptable performance
• Unpack how a specific performance has not met this criterion
• Find the root cause of the issue
• Create measurable objectives that will allow the employee to meet performance criteria
• Set SMART goals that will give employees a roadmap to follow to meet these objectives – Find out more about how to set SMART goals.
• List the actions and define which milestones must be met
• List the criteria that will be assessed and the deadline dates
• Emphasize the positive outcomes that improved performance will result in for the employee and the business.

4. Define the resources, training, or coaching that will be provided

• HR and the manager can work together to determine what support the employee needs and what support the manager needs. 
• Employees should also be given the opportunity to request the type of support they believe will most benefit them.
• Is there a budget available, and has this been defined according to the benefits of improved performance?

5. Schedule regular check-ins to ensure milestones are met

• HR should check in with the manager to understand how the employee is progressing.
• HR should also ensure that the manager is scheduling regular check-ins with the employee.
• These check-ins should be clearly defined in the PIP with specific deadlines.

Free performance improvement plan templates

The free performance improvement plan template is also available as an editable PDF and in an Excel sheet.

Performance improvement plan template: Editable PDF

Performance improvement plan template: Excel

How to use metrics to track PIP objectives

Performance improvement plans are all about defining the problem, the solution, and the action points that will result in success. It’s, therefore, imperative for managers to track employee performance through the right metrics.

As HR, you can help your managers implement successful PIPs by leveraging these key metrics:

1. 360-degree feedback: 360-degree feedback, also called multi-rater or multisource feedback, is an instrument to get performance ratings and feedback from subordinates, peers, customers, suppliers, and/or supervisors. Read our comprehensive guide on 360-degree feedback to help you leverage this excellent tool.
2. 180-degree feedback: This is a simpler version of the 360-degree feedback tool that focuses on the employee’s direct colleagues and manager.
3. Net Promoter Score (NPS) (for customer interfacing staff): One of the key components of a 360-degree feedback is ensuring you also ask the customer about their experience with an employee. A Net Promoter Score metric ensures that this remains top of your list and that you create a way to receive valuable feedback from customers.
4. Training metrics: Implementing training and not measuring its effectiveness on an employee’s performance wastes time and resources. Even if you have implemented a PIP, you don’t necessarily know if it has been successful or if the resources provided in the plan are impactful. This comprehensive guide delves into the various training metrics to track.
5. Performance reviews: Performance reviews are still the most common metric that most managers follow. We highly recommend utilizing additional metrics to ensure a robust PIP meeting your key objectives.
6. Rank performance on scales: Ranking performances according to pre-defined scales is a great way to quantify performance versus expectations. Remember that this exercise is not only about gathering data – data needs to be tracked and analyzed for it to be used effectively to drive changes in behavior and improvements in performance.

Performance improvement plan examples

Example 1: Chronic absenteeism and lateness

Example 2: Persistently missing design deadlines

Example 3: Poor team performance

Example 4:  Poor customer service

Example 5: Consistently missed sales targets

Performance improvement plan sample

Here is a sample view of a performance improvement plan based on the above example to provide you with an idea of how to complete your PIP document: 

Tips: How to effectively deliver a PIP to your employees

This article has unpacked when to use a PIP, and its benefits and provided you with some examples. But, successful PIPs come down to the details.

Here are some key tips to ensure your PIPs add real value to employees, managers, and the organization:

1. Initiate an open dialogue: Before implementing a PIP, have a candid conversation with the employee about observed performance issues. Encourage them to share their perspective and listen actively to understand their side.

2. Make sure the PIP is worth the effort: What is causing the poor performance? Can it be fixed, and will the resultant outcomes add value to everyone involved? Yes? Excellent, then pull the trigger.

3. Create measurable objectives: SMART goals are a great way to ensure that employees know exactly what they are working towards and how success will be measured.

4. Provide the necessary resources and training: Offer tools, training, or resources needed to address skill gaps or performance barriers. This could include workshops, mentoring, or access to learning materials.

5. Focus on support: PIPs are just documents that highlight problems, list objectives, and then send employees on their way. They should clearly unpack what support the employee will receive, why that level of support (this is linked to root cause analysis), and how outcomes will be measured.

6. Take a collaborative approach: Performance improvement plans should empower employees and be collaborative. Set up regular check-ins to track progress and address any issues that might crop up. Employees should not feel like they are going at it alone.

7. Be clear about the consequences: The goal is to shift and improve behavior, so you want to keep your PIP positive and highlight the benefits of improvement, but the consequences of not achieving goals should also be clear. Transparency and communication are key. The secret is to focus on improvement and not punishment, however.

To conclude

HR plays an important role in determining whether a performance improvement plan is necessary, as well as whether it can be used effectively to bring about positive change. When done right, a PIP can be a tool to help employees make positive improvements that can benefit the business.

FAQ

Nadine von Moltke

Nadine von Moltke was the Managing Editor of Entrepreneur magazine South Africa for over ten years. She has interviewed over 400 business owners and professionals across different sectors and industries and writes thought leadership content and how-to advice for businesses across the globe.

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