Creating an employee performance improvement plan

An employee who receives a Performance Improvement Plan (PIP) often concludes that the organization wishes to get rid of him. While termination could be an option if the worker fails to make certain improvements, nobody – including the manager issuing the PIP – should think of an employee performance action plan as a ticket out the door.

Rather, both sides should look at the PIP process as an opportunity. With labor shortages and retention issues, modern employers want, if at all possible, to hold on to existing staff. Recruiting and training new workers involves spending time and money. Similarly, employees do not desire involuntary dismissal. They may like their job and the company culture, not to mention that being let go spells loss of a paycheck and a blemish on their resume.

With all involved holding an optimistic mindset, an effective performance improvement plan can help struggling employees take corrective action to rectify work performance issues. Here, we look at performance action plans in detail:

What is a Performance Improvement Plan?

As defined by the Society for Human Resource Management (SHRM), a performance improvement plan is “a tool to give an employee with performance deficiencies the opportunity to succeed. It may be used to address failures to meet specific job goals or to ameliorate behavior-related concerns.”

An employee receiving a PIP should not be shocked by the content. The manager should have addressed matters in some capacity well before a behavioral or performance issue reached this stage, perhaps during an annual performance review or a regular check-in. Such constructive feedback often prevents the need for a PIP by creating awareness of a problem and what corrective actions could help.

The structure of a Performance Improvement Plan

Managers do not fill out PIPs with random thoughts. Rather, with help from human resources, they complete a formal document that follows a specific format.

To ensure consistency and thoroughness, companies typically provide managers with a performance improvement plan template. While the exact blueprint differs by organization, common elements often include:

• Employee name and title

• Date

• A statement about why the PIP is needed.

• Identification of the employee behavior or employee performance problem, with concrete examples.

• A summary of past managerial efforts to rectify the matter.

• A list of actions the employee needs to make to correct the issue.

• An outline of what the company can do to assist in facilitating changes, such as providing regular feedback, assigning a mentor, or offering additional training.

• Creation of a timeline for when goals need to be met.

• Explanation of consequences or possible disciplinary actions for failing to meet objectives, such as reassignment, demotion, or termination.

• Acknowledgment signatures from all parties involved, such as the manager, HR representative, employee, union rep, etc.

Filling out a PIP to maximize full potential

A PIP boils down to a basic premise: An employee is falling short in some capacity of performance or behavior. What does the worker need to do to right the ship, and how can the company contribute to the employee’s success?

Remember, a PIP is a performance improvement (or performance action) plan. It is not simply a list of wrongdoings with a blanket order to do better or suffer consequences. Rather, the document needs to specifically present a problem and detail what correcting that problem involves. It requires metrics that clearly define what reaching standards looks like and a set time frame for completing the conditions of the improvement process.

Managers may recognize these elements as similar to what is used when creating SMART goals. Indeed, many leaders find the SMART format useful when constructing a PIP. Each letter in SMART stands for an important factor in successful goal-setting: Specific, Measurable, Achievable, Relevant, and Time-bound. Briefly, let’s look at how they apply to a performance action plan:

• Specific: Without sugar-coating language or stating a vague deficiency, what is the problem that needs solving? Do not present a concept without detail. Telling someone she needs to display greater professionalism does not provide a clear picture. She will understand much better if told not to chew gum around clients and refrain from wearing flip-flops to the office.

• Measurable: Can improvement be quantified so that all parties recognize whether the goal has been met? For someone with productivity problems, for instance, success may mean reaching a certain sales quota or producing a given number of units. For absenteeism or tardiness, it may mean zero unexcused incidents during the PIP time frame. For behavioral issues, measurement might mean no more complaints from other team members about unprofessional conduct.

• Achievable: Is the goal something reasonable? Requesting an administrative assistant take a writing course at a community college to improve communication skills is one thing; expecting her to suddenly be able to design legal contracts is quite another.

As a side note here, setting the bar way too high can have dire consequences. Performance improvement plans are supposed to be good faith efforts by employers to help employees get back on track. If you try to “trip up” workers by constructing impossible goals that they will fail at, you could be setting yourself up for a lawsuit.

• Relevant: Is what you are asking the person to do in line with his job description? People, in general, possess a variety of deficiencies or less-than-perfect traits. A PIP should focus on poor performance or undesirable behavior as it relates to what the employee was hired to do.

• Time-bound: What is a reasonable amount of time in which to make improvements? Develop intervals by which to accomplish certain objectives, such as 30, 60, and 90 days. Such a time frame provides a sense of urgency and promotes accountability.

Getting employee input

The most desirable outcome of a performance action plan is the employee changing his actions or behaviors to meet established standards. For this to happen, the individual needs to buy into the course of action. Willingness to put forth the effort does not always happen easily. The worker may worry about not possessing the right skills or feel overwhelmed by what changes management expects. Some may simply not care and opt to leave the organization rather than change.

Before finalizing a PIP’s conditions, talk with the employee. Listen to the person’s concerns. You might discover some root causes behind his problems. Perhaps the worker was absent during a training session and never learned how to correctly perform a task being asked of him. Maybe poor performance stems from being assigned too much work or management failing to provide clarity about priorities. Or, perhaps this person’s difficulty getting along with other team members stems from the rudeness of a clique that routinely chides or excludes him.

Giving the employee a chance to express his side can help you view the problem in a new light. With this information, you can take better action to support success, such as offering training, evaluating workload, and championing inclusion in the workplace. Hearing out the worker also establishes him as an important voice in the PIP process. He is more likely to believe the plan is there to promote improvement, not punish transgressions.

Following through

While much of the load of fulfilling the conditions of a PIP rests with the employee, managers must also fulfill their obligations. If the document calls for weekly check-ins, schedule them into your calendar. If the PIP promised a mentor, secure a suitable one.

Pay particular attention to established intervals for re-evaluation. Failure to sit down again to examine progress at the 30-day mark does little to encourage the individual to keep reaching the goals set for 60 or 90 days. PIPs will develop a reputation as bureaucratic nonsense that gets filed away without further thought. And, if the person has improved, missing chances to provide positive reinforcement can kill momentum.

A final good reason to pay attention to the terms of the performance improvement plan from implementation to end date is to support any disciplinary action. Someone claiming wrongful termination boosts his case when able to demonstrate that management did not live up to its end.