The Performance Improvement Plan That Will Transform Your Company
Let’s face it: there are few things worse than having to put your employee on a performance improvement plan.
Yet, somewhere in this anxiety-inducing process, performance improvement plans, or PIPs, continue to be one of the most powerful tools for managing employee performance. So how can you use one to your advantage?
Gusto’s former head of HR, Katie Evans-Reber, has some thoughts.
Make no mistake: a PIP “is not a tool to manage somebody out,” says Katie. “It shouldn’t be a way of easing someone out who you know you’ll fire anyway. It should be a tool that helps them improve.”
In this article, we’ll cover Katie’s steps to help a struggling employee get back on track.
But first, let’s start with the basics.
What exactly is a PIP?
A PIP is the final step in a long process of determining whether an employee is the right fit for your company. It’s the last chance an employee has to prove that they can do their job. It usually comes in the form of a document outlining goals they must hit in a given timeframe.
A performance improvement plan can help a struggling employee achieve their potential, both for:
- Your company. It often costs less to improve an existing employee’s performance than it is to recruit, hire, and train a new employee.
- Themselves. A PIP can make the difference between their career sinking or swimming.
A performance improvement plan can also protect your company in case you end up having to let the employee go. In that case, having a documentation trail that shows your efforts to help them improve may help later if you’re sued after the fact for wrongful termination. (Hopefully not!)
So if you offer one of your employees a PIP, you should still believe they can truly succeed.
What comes before a PIP?
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Several key steps should lock into place before you even utter the word “PIP.”
Phase 1: Immediate feedback
Give feedback daily. If an employee shows up late to a meeting, ask them what happened. If they aren’t prepared for a review or sending out a deliverable, call them out. Be clear and upfront.
Phase 2: Intensifying feedback
If problems continue, it’s time to circle back on them in your one-on-ones. Don’t be afraid to use candid language — communicate that you haven’t seen improvements and the situation is escalating. This phase usually lasts from two months to a quarter.
Around this time, start taking formal notes on your employee’s performance and any conversations you’ve had about it. Capture all the details of what was said and what was done. If things escalate, you’ll be able to reference these notes when implementing the PIP.
Phase 3: Period of intensive coaching (PIC)
Now, for the real work. The period of intensive coaching, or PIC, is a critical stage of the process where you must be committed to getting your employee back on track. If you have an HR person, they’ll help you with this part. If not, you’ll create the PIC plan on your own.
Make sure you include the following four sections:
- A breakdown of your employee’s performance issues.
- Specific examples of each performance issue, linking to documentation of their manager’s feedback to date.
- A coaching plan with specific project requirements and check-in dates.
- The date they’ll be evaluated. Or in other words, when the PIC is over.
Once implemented, the employee’s manager should meet with them weekly for at least an hour to offer guidance, resources, and mentorship to help them succeed. This phase generally lasts about four weeks. If the employee passes the PIC, they’re in the clear. If they don’t, they move on to a PIP.
Phase 4: Performance improvement plan (PIP)
At this point, you need to evaluate whether a clean break is the best option. If your employee’s role is clearly not a good fit with their skill set, it may be worth offering them an opportunity to decline the PIP. Otherwise, the next step is to get them on it.
How do I put an employee on a PIP?
There are multiple steps in this process, and each one requires you to be as detailed and organized as possible.
#1. Gather all the documentation
This includes feedback and any notes compiled throughout the performance management process (especially during the PIC).
Look it over, double-check that the feedback to date was clear, and confirm that a PIP is the last remaining option.
#2. Create the plan
Similar to a PIC, a PIP should include:
- Documentation. Include prior manager feedback and the PIC plan.
- Employee’s performance issues. List the goals or levels of performance that the employee is failing to reach. Be specific and use real examples if possible.
- Expected performance levels and goals. State the goals and performance levels the employee is expected to reach so there’s a clear understanding of what’s expected in the areas where the employee is falling short.
- A final project. Include details of this project for the employee to complete in four weeks on their own.
- Plan to support the employee in bridging the gap. Create a plan to help the employee overcome their issues, and reach the goals and performance levels desired. That can include training, mentoring, or some other form of assistance.
- Detailed timeline. Lay out a schedule for weekly check-ins with both management and human resources, and include any dates by which specific goals and performance levels must be reached.
- Consequences. Detail what will happen if the employee does not reach the goals, as well as the performance levels required within the time provided.
- Dated signature and final evaluation date. Make sure to include a spot for the parties involved to date and sign in order to execute the PIP and put it into action.
#3. Make sure to follow a standard process
You may get a lot of pressure from your team to move through the PIP quickly. Just remember—it might not hurt your business that much to keep them on for an additional month of training if you feel like they can really improve.
What will hurt your business is a large portion of your team thinking your performance management system is unfair. Take your time.
#4. Hold yourself accountable
“You can’t just hold all your feedback in and all of a sudden tell your employee that they’re not doing their job and let them go,” says Katie. “Managers have to be committed to giving real and regular feedback daily.”
Managers should also never miss check-ins, change deliverables, or not adhere to the PIC or PIP plans as documented.
#5. Be authentic
Don’t put somebody on a PIP that you know you’re going to have to let go. Instead, be honest with your employee and see if they agree that discussing other options is a logical next step.
Katie finds PIPs to be extremely valuable, but only as part of a larger process.
“PIPs can’t be your only performance management tool,” says Katie. “You can’t expect a struggling employee to swim on their own after being thrown into a pool. Take the time to give them swimming lessons. Both parties should walk away feeling as good as possible, having each given it their all.”
PIPs and other issues surrounding employee termination are often complicated. Talk to an HR expert to help you manage performance in a way that’s tailored to your business.