The Performance Improvement Plan (PIP) That Will Transform Your Company

The Performance Improvement Plan (PIP) That Will Transform Your Company

Ayushi Somani
Ayushi Somani
Table of Contents
Table of Contents

If you ask a company owner what is the best asset they have in their company, they would tell you it’s their employees. Well, at least that is how it should be. But not all the employees are able to work to their full potential and show high performance on the scale.

With each performance review, the company has to look out for employees who are excelling and for the ones who are not. The reviews will show a clear result, but just because an employee is not performing really well does not mean they should be fired. Anyway, it costs much more for a company in finding and hiring a new employee and start the onboarding and training process all over again.

Here comes the one ultimate solution to boost up the performance of your employees for their as well as the company’s growth.

What is the solution? It’s the Performance Improvement Plan.

Let’s understand what a Performance Improvement Plan or a PIP really is.

What will you find in this article -

What is a Performance Improvement Plan (PIP)?

When any of your employees aren't performing well as you expect. But you believe that he can improve his skills and can be a better employee. In that case, you create a document in which you set some specific goals and levels with a deadline in order to improve his performance. The employee has to meet the expectations mentioned in the document within a given deadline. This whole process is known as a Performance Improvement Plan or PIP.

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Perfromance Imrpovement Plan 

PIP can also be understood as a review of the performance that is similar to the grade reports you would receive in school or your college.

The review of the process can point out a need for improvement in any place in terms of the company’s expectations. It could be adhering to the company’s culture better, completing due training, or simply detailed metrics on how to meet the targets better.

Three Steps to Create an Effective PIP

When your employees are making repetitive mistakes and not meeting the deadlines, it creates a chain of low quality work, a lack in meeting targets, and a drop in productivity, and the employee may prove as a liability to the team members as well as to the company.

So when you are working towards creating a PIP for an underperforming employee, the fundamental step is to sit with him and try to understand the reason behind his underperformance. That's where you realize the difficulties faced by the employee. Now there are some steps given below which will help you to create an effective PIP.

Expected Performance

There is an essential need for the employee to meet the company’s expectations. As the boss/HR you have to put the goals and the required level of achievement very clear. What are the areas where you want them to improve? You must set goals and levels which are specific, achievable, and time-bound. The guidance and PIP are only effective when the instruction and path to achievement are crystal clear.

Define your Support

Just mentioning a plan of growth and improvement is not enough for an employee. In the worst-case scenario, the plan will also become a task and the employee will fail it too. Since you have set smart goals and mentioned the areas of improvement, it's time to define your support as well. Yes, as the manager/ boss/ or in whatever position you are helping your employee, you must show your support alongside giving them the right plan. The reason behind creating PIP is to keep that employee on your team by improving their skills.

With PIP, also prepare a schedule for weekly 1-on-1 or a small group meeting working with the PIP plan to boost their energy and give them the help they may require.

Perfromance Imrpovement Plan 

The Consequences

No plan exists without consequences, and with a 100% guaranteed success. You may have put the employee on a PIP plan but they might fail to achieve the results you have been expecting. Prepare yourself for the same situation.

Make sure you have given your employee enough time to achieve the PIP. If the plan is built for 3 months, make sure the next review is taken after 3 – 4 months only.

Benefits of Using a PIP

Yes, companies can simply fire an employee and hire a new one. Yes, a company can put the underperforming employees on a pay cut or can transfer them to a different department. Yes, companies have a lot of ways to cut an underperforming employee. Then what is the need of using a PIP? Well, the answer is simple, every employee has the capability to grow, and they were fired in the first place because they had proved their capabilities in a way. There are some of the benefits of PIP that will help you understand how things can be better by simply using a PIP rather than getting a new team altogether.

Improvement of Company’s Culture

Using PIP acts as an educator for the employees by warning them what is to be done. A PIP states clear expectations from an employee. The employees also become aware that they need to step up with their game or they will be accountable for disciplinary action.

The hard-working employees take this as appreciation and understand every single employee in the company is bound to work hard and they are not the only ones putting a lot of energy into it.

On the other hand, the employees who are struggling are comforted that they are not alone. With PIP they are offered guidance, an opportunity to grow, and support from the manager of the boss. It also keeps the employees understand that they need to seek help if things are not working fine for them or they will be accountable for an action against them.

A Performance Improvement Plan is a growth plan that helps employees from all departments and positions with their growth. This plan is not restricted to employees who are underperforming or struggling. This plan also works wonders for employees who have the potential to grow to take higher positions. It works for employees who can be a better fit in a different department in a different position. It also works for employees willing to stay in the same position but wishing to grow their numbers even though they are doing well.

Performance Improvement Plans are not only for the growth of the company but for the growth of individual employees as well. It acts as a safety net for employers who are willing to achieve long-term goals with their growth along with the support of their seniors to guide them through.

It helps both the company and the employees with growth and keeps the employee force motivated with no toxicity in the workplace.

More Efficient

Firing an existing employee and hiring a new employee requires effort, time, and money. Naturally, all these are company resources that can be spent somewhere better. This is the prominent reason rather than firing the employees away in the blink of an eye, companies should focus the resources in helping the employees out.

This is where the Performance Improvement Plan can help. It helps the company in saving the cost of firing and hiring new employees, and in saving time that will be used to call for applications, sort the right applications, arrange and take interviews, and finally settling on the employees coming as the best fit. Again, this also includes the risk if the newly selected employee would take and stick to the job or not.

It also helps in saving efforts of taking interviews and starting the training process of the new employees from scratch. Yes, training is needed for the existing employees performing below expectations, but it will still cost much less since they already are aware of the working process, culture, systems, and a lot more than the company follows.

Gives Better Results than Reviews

Performance reviews are great for understanding who is performing right and who is not. However, it is not the right way to announce that an employee has to get better. Not every employee is able to take criticism in the right way. Also, not everyone believes in the authenticity and accuracy of a performance review. It also never educates the employees on how to get better at their job or what are they exactly lacking.

To correct this situation, rather than announcing a performance review, a Performance Improvement Plan can be the right alternative. With performance reviews, the employee will most likely dismiss the results, and continue work with the same pattern and strategies, which is defiantly not what a manager or a company is looking for.

A PIP comes with a clear understanding of where the employees are lacking and the steps to be taken to improve.

Performance Improvement Plan also has a personal touch that makes the employees feel they are not alone and helps them in growth with the help of their seniors. What is a better way to encouragement for an employee?

Examples of Performance Improvement Plan

We have talked a lot about what is a Performance Improvement Plan and why is it important for companies as well as employees. Now let’s take a look at what exactly is to be taken care of in a Performance Improvement Plan with some examples. Here are some examples to give you a better understanding.

Customer Service Performance Improvement Plan

Customer service needs patience, training, and positive behavior. The right combination of all three of them is what a customer service executive needs. If your customers are complaining about the behavior of your staff or are coming up with management complaints, you know what is needed to be done.

Here is an example of a PIP that will help you out.

Aim

The aim of this PIP will be to improve the attitude of the staff and communication and approach towards the customers.

Objective

The objective of such a PIP would be to better customer retention and engagement with the company and the staff for longer and better relationships.

Plan of Action

The plan of action needed to improve this situation should be associated with the customers themselves. The associate can be working closely with the customers, before taking a training program on how to treat the customers right, how to solve the issues, what is the code of discipline for dealing with customers, etc.

Metrics

The metrics of improvement come directly from the customers. Check if the customer satisfaction rate is improving. Check whether the customer retention rate is improving. Check the number of customer problems solved. Etc.

Low quality Performance Improvement Plan

Low quality of work happens in different processes. This problem certainly arises away from customer dealing. But the problems can become a liability to the team and the company since low quality work produced can hamper the company’s reputation.

Aim

To improve the quality of work produced by the employee

Objective

Correct the irresponsive manner of working, producing error-free work while meeting deadlines. Putting more focus on work quality.

Plan of Action

The objective is certainly very clear here. First, make sure to check the strategy and approach of working. A lot of time the process used to work might not be giving out the required results.

Second, producing error-free work within the given deadline. For this, an easy timeline can be set; the work can be broken down into parts and can be completed in steps.

For error free work, the employee can work alongside a senior for a while to understand the process of working. The senior can at the same time supervise the work done and help the employee in understanding how to make things better.

Metrics

Number of failed and successful deadlines recorded. The quality of work submitted (This must be subjective and should be checked by the seniors).

Productivity Performance Improvement Plan

As the name suggests, this PIP focuses on the improvement of productivity. The problem mostly affects employees in middle management positions.

Suppose an employee is in charge of growing the employee force or increasing the number of leads for the business and there is no growth as such.

Aim

Growth in the number of employees or leads for the business.

Objective

To grow the number of employees or leads for the business by strategizing the process to increase productivity.

Plan of Action

Improvise the existing process and strategies to get better results. Work on lead magnets and better filter for the prospects. Arrange campaigns and workshops to attract qualified and high skilled applicants to join the company. To manage and plan a retention strategy for the employees.

Metrics

Employee hiring in the last few months. Employee retention. Lead generation. Quality lead management. Keep a track or check these metrics after a span of 3 to 6 months.

Behavior Performance Improvement Plan

Unprofessional behavior can bring an employee down to 0 no matter how amazingly talented and skilled they are. Unprofessional behavior is never acceptable.

This PIP can solve a lot of issues for a company. It is for employees failing to show the right attitude, not reporting on time, mistreatments and anger issues with colleagues, teammates, and juniors, absence without notice, etc.

Aim

Change behavioral patterns to be more professional.

Objective

To implement the right values and correct behavioral characteristics to follow professionalism by reporting tasks on time, anger management, using the right channel, and discipline to communicate with other employees.

Plan of Action

This PIP will only be successful if the employee is personally willing to make changes. Starting with behavioral training in the workplace can be a great beginning. Deciding and sticking to taking no offs without any advance notice if there is no medical reason or emergency. Anger management on personal and professional levels can prove to be a great help.

Metrics

Measuring behavioral patterns can be subjective. But observing the employee can give outright metrics. See how they behave and treat other employees (especially their juniors) around them. Checking the attendance sheet and observing the time of arrival and departure. Checking if the employee is reporting the tasks as per the protocol of the company or not. Etc.

Performance Improvement Plan Structure

In this article, we have read about what is a PIP, the purpose of PIP, how to get the right results from a PIP, and what are the requirements for a result oriented PIP.

The only thing left to understand is how to structure a PIP for the right usage and efficient results.

Here is a structure of how to create a Performance Improvement Plan. This works for all kinds of plans and is highly result oriented.

Expected and Acceptable Performance

This should be the beginning of a Performance Improvement Plan. To begin with a PIP the employee must be made aware of what the company exactly is expecting from the employee. Then it should be clearly mentioned what is acceptable and what is not when it comes to the performance of the employee.

Mention where their performance is lacking. Mention the areas they need improvement in.

Measures to Take – Don’t drop a bomb on the employee. Make sure to make the employee feel comfortable and helped rather than criticized. The best way to do that is by organizing meetings with the seniors like HR, Manager, CEO, team leader, supervisor, etc. The employee, as well as the seniors, should be equally engaged in troubleshooting.

This way the problem is highlighted and help is offered to manage the problem at the same time as well.

Set Practical Objectives with the Right Metrics to Check

If you cannot check the progress of performance of your employee, the Performance Improvement Plan will bring no good result.

To ensure the employee is improving, make sure to establish appropriate metrics to check the progress of the objective.

Mention the framework of the metrics being used to judge the performance of the employee.

Measures to Take – Analyze and understand the reason for poor performance.

Start from the root cause. Analyze the problems and the gaps that cause a lack in performance.

The problem at times may be related to a lack of skills r understanding of the work.

But there are other possible reasons as well. An employee can be facing personal problems or mental health issues. The employee might also be planning to leave the company and hence they do not have to focus on the work.


Support for Employee

The employee needs to know where and how to find the right support. In this section, mention all the channels of communication, the managers, the HR, the team leaders, etc. Also mention how the employees can get in touch with the seniors in order to seek support from them.

Measures to Take – Find ways to provide better and more frequent support to the employees.

A PIP is prepared and followed to encourage and help employees in the best way possible. The employee has to achieve their target but expecting them to do it on their own is not fair. Arrange meetings, arrange training sessions, arrange workshops, and prepare tutorial videos for the employees to watch whenever they need them.

Some fun activity sessions with seniors can also ease down the channel of communication between the employee and seniors.

Schedule and Reporting

Scheduling makes the employees feel secure and on time and keep them on track. Mark a schedule for everything the employee may need. Schedule everything from the beginning to the end. Reporting is another aspect that helps in measuring the amount of improvement an employee has been able to achieve.

Measures to Take – Deadlines are good. Schedules keep things on track. Make sure to include a lot of scheduling and reporting.

Start from recording the time of the beginning of the PIP and the time of re-review of the performance of the employee. Schedule and mention the meetings with the seniors and other colleagues beforehand. Schedule and mention the reviewing of performance beforehand with a reasonable timeline.

Reporting is again important to look after. If the employee is not reporting in the required order, analyzing performance levels will be extremely difficult.

Setting deadlines also improves productivity and rapids up the entire process.

Consequences of Failure

There are consequences if the plan does not work out. Ensure the employee understands the consequences if there are no apparent results out of the PIP plan.

This has to be the last entry in the structure of the Performance Improvement Plan. The purpose to include this in the PIP is to give the information to the employee about the consequences. The information prepares the employee for their future with the company as well as gives them a deadline to make sure they bring improvement within a valid period of time.

Measures to Take – The concentration has to be on performance to keep it positive rather than on the punishment.

The motive of this section in the Performance Improvement Plan is not to tell the employee that they will be fired soon. It is to see the employee perform.

Before handing over the Performance Improvement Plan to an employee and introducing them to this section directly, the better approach is to discuss the consequences while introducing the PIP.

Build confidence for your employee and let them know you only wish to see them improve. Give them minor and major goals to achieve. Give them solutions to their problems. Show them the right way to work for their improvement. Mention the punishment, but do not make them believe it is what they are going to achieve.

Reward on Success

It goes without saying that a reward always brings out the best performance in people. Adding to it, rewards also show appreciation from the company that acts as a motivator for the employee.

Rewards can be in any terms. It can be a promotion, a salary hike, a trip, a project they really wanted, or any other reward that might fit right for the employee as well as the company.

Measures to Take – Announce the reward in advance to show the company cares.

Offering rewards not just give motivation but also helps the employee to connect with the company better.

While punishments are important, so are rewards. It should be announced in advance to ensure that the employee is aware of it and so that other employees who are not on PIP understand the company supports and cares about their individual growth as well.

How Deskera Can Assist You?

As a business, you must be diligent with the employee payroll system. Deskera People allows you to conveniently manage payroll, leave, attendance, and other expenses. Generating payslips for your employees is now easy as the platform also digitizes and automates HR processes.‌‌‌‌‌‌‌‌

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Key Takeaways

We have covered everything you need to understand about Performance Improvement Plans, build one, and use one successfully to get the right results. If you have read it to the end, we are sure you will successfully achieve your goal. If you missed out on anything, here are some of the key takeaways you need to keep in your mind while preparing and working on a PIP.

  • A performance Improvement Plan is a plan to motivate the employee and improve their performance in a positive way.
  • Constructive criticism is likely to help an employee but may backfire as well. Performance Improvement Plan on the other hand has very high chances of working in the right way for the employer and the employee.
  • Ensure the performance improvement plan is built with a lot of positivity and gives motivation to the employee. It should also offer a lot of support to the employee from the seniors.
  • When a Performance Improvement Plane is being made, make sure it is built with three main factors in mind, what is the expectation from the employee, how much support is being provided, and what will be the consequences if the employee’s performance does not improve.
  • The structure is an important part of the Performance Improvement Plan. A lack of structure can reduce the efficiency of the PIP.
  • The manager should always discuss the Performance Improvement Plan point by point with the employee while handing over the document. This way both will be able to understand the plan and each other’s troubles and expectations better.
  • Including consequences and a reward is not vital but can prove as a great motivator for the employee. Ensure you are using this section the right way.
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