Let’s be honest: one phrase that can sow terror in the hearts of many employees is – performance improvement plan.
Many employees regard the performance improvement plan, or PIP for short is a “herald of doom.”
They would rather not go through the process if they can help it, primarily because of the long-standing belief that they’ll probably be out of the door and out of a job instead of setting up at the end of the PIP period to improve in their role.
Being fired from a job is a life-changing experience for many people in the workforce.
On the business side, replacing a recently fired employee can be expensive, particularly when separation costs, replacement costs, and lost productivity are taken into account.
Many companies put up a performance management plan for underperforming employees instead of firing them right away.
What is an Employee Performance Improvement Plan
In a nutshell, a PIP is a tool for managing people or human resources.
It’s usually a formal document that incorporates processes and practices to assist employees, whether contract or non-contract, in improving their performance and regaining good standing with the company.
Performance improvement plans have a bad reputation.
That’s because some companies only use them as documentation to protect them from a possible lawsuit or, in some cases, they delay making any personnel or workforce planning changes.
Others treat them as the first step in the firing process.
You don’t want your employees to be shocked when you implement a PIP.
To be successful, a PIP must have employee buy-in.
This means that they should be aware that a PIP is on the way, as not being aware could complicate matters further.
The employee improvement plan should ideally include the following:
- The continual or ongoing performance or behavioral problems
- Employees’ attainable targets
- A deadline for completing the plan, usually between 30 and 90 days.
The progress (or lack thereof) of the individual who is being put on a PIP will be closely monitored and measured. It’s no surprise that the idea of undergoing a personal improvement plan will cause anxiety in many employees.
Therefore, managers should ask themselves:
Is a PIP necessary to get an employee to change their habits and perform better? Is PIP intended to assist the employee or to start the termination process?
PIPs can cause fear and anxiety, and employees cannot work at their best when they are overwhelmed.
To avoid unpleasant surprises, scheduled performance appraisals or regular feedback sessions can inform underperforming employees that a PIP might be coming if no change is made soon.
The management will collaborate with the employee to create a strategy and will make every effort to encourage discussion in order to identify specific areas for improvement.
The managers and HR representatives should review the strategy on a regular basis.
Performance reviews are an important part of every employee’s ongoing growth, and PIP reviews are as well. This will assist in ensuring that employees follow the plan and that employees on PIP are treated fairly.
The manager should keep a close eye on the employee’s work performance and provide feedback if needed, and if necessary, take disciplinary action.
In addition, the company’s policies and procedures for underperformance should be clearly stated in the employee handbook.
Keep the handbook in the HR software the employees use — or on the business intranet — so they can refer to it if they need to review company policies.
How to write a performance improvement plan
Employee Performance Improvement Plans are best implemented when an employee is struggling.
Managers should be able to recognize when an employee is underperforming.
Reduced productivity, decreased engagement, taking more time off are some of the signs that an employee is having some problems. If a consistent pattern of poor performance exists, the process should start.
Tips for identifying the problem:
- Make an effort to be thorough: Determine what needs to be changed and document your findings. Include as much information as possible, including particular events that demonstrate the performance or behavioral issue.
- Pay close attention to the employee: The employee’s poor performance may be due to legitimate reasons. Maybe they are distracted by a disagreement with a boss or a teammate. Taking the time to listen could lead to the discovery of larger issues within the team or even the entire company.
- Consult with your HR to see if a PIP is a good option: The managers should consult HR to see if a PIP is the best option in such critical situations.
Now that you’ve found a problem, you’ll need to find a solution. To avoid prejudice and preserve objectivity when discussing the PIP with the employee, the manager should be assisted by a third party, preferably an HR representative. This also informs employees that the PIP is being introduced to help them rather than as a first step to firing.
Tips for creating an action plan:
- Make it very clear what the PIP’s objectives are: Set targets that are realistic, achievable, and measurable. Make a list of what’s needed. Outline the plan’s desired result in no uncertain terms. Include numbers, job descriptions, and other relevant information to assist the employee in visualizing the goals and how to achieve them.
- Be specific when it comes to timelines: Have specific tasks or action items that must be completed within 30, 60, or 90 days — or even a year, if achieving a goal takes that long.
- Describe how the success of employees will be measured: Be open and honest. Inform the employee of the approach you will use to measure their progress.
- Ask a few questions about the employee’s thoughts: Collaborate with the employee to come up with solutions to problems and to hone their skills.
After the action plan has been established, make the employee review it and sign it.
Tips for putting the strategy into action:
- Ensure the employee is held accountable: Although you, as s manager, are responsible for your direct report, you should also keep employees accountable for their decisions and results.
- Follow up rigorously: Be serious about employees’ progress monitoring to avoid wasting everyone’s time and effort. Follow the timelines set out in the previous phase for the review. Schedule regular meetings to discuss how the employee is doing in relation to the company’s objectives.
- Keep track of everything: In your workforce analytics system, keep track of all conversations, observations, and performance results. If the plan fails and a negative decision must be made, you will have a formal record demonstrating that the employee was given enough time and resources to improve.
- There’s a reason why standards exist: Make it clear to the employee that expectations and standards are not negotiable. Limit your willingness to give them flexibility if they don’t meet your expectations.
According to a survey conducted by the employee engagement company Officevibe, 65 percent of workers want more feedback from their supervisors in order to improve their performance at work. According to another Gallup survey, only 30% of workers believe their manager includes them in goal-setting processes.
Develop a performance plan that helps your employees improve
Performance improvement plans (PIPs) can be a constructive method for supporting employees who are struggling in an area of performance. A PIP is a customized plan that addresses specific areas that need improvement.
They have the ability to transform an average employee into a highly efficient one.
There are a number of advantages, including engaging employees by giving them the power to change their performance and behaviors; offering detailed feedback and highlighting specific areas for improvement; and demonstrating to employees that the company understands their current challenges.
Furthermore, if performance does not improve and dismissal happens, so by getting a PIP process in place reduces the likelihood of litigation.
Investing time and money into helping employees improve their job performance is much better than firing them. PIPs are inexpensive compared to the costs of replacing an employee.
It’s possible that the struggling employee just needs to be reminded of their role’s expectations and responsibilities.
If their performance does not improve and you plan to fire them, the PIP will show (legally) that you did everything possible to make them do better at work before terminating their jobs.
PIPs will also provide measurable results that can be used to train and help employees when gaps are found.
Perhaps the most significant advantage of a PIP is that it is not punitive in nature—rather, it is a positive way to improve an employee’s abilities.
As things stand, PIPs aren’t exactly the kind of performance tools that workers are eager to accept. Managers must stop using PIPs as a tool against employees in order for employees to see them for what they are.
Help the workers understand that PIPs are a strategy for assisting employees in improving themselves and not a policy element in a disciplinary process.
If the employee’s performance is still below expectations at the end of the PIP cycle, and you decide it’s time to let them go, make sure you check out with your HR and employment experts to ensure you’re following all applicable employee termination, demotion, or transfer regulations.
In this article, I wanted to put forward that when implemented in the right way, PIPs can truly be helpful both for the company and the employees.
If it is not clear enough and not showing that it is made to support and assist the employees, it can definitely backfire. This is why you need to make sure that PIPs are well prepared and reviewed constantly.