What Are Performance Improvement Plans?

What Are Performance Improvement Plans?

Although most managers don’t enjoy giving feedback, say through a Performance Improvement Plan (PIP), 83% “of employees really appreciate receiving feedback, regardless of whether it’s positive or negative,” says Officevibe, which helps companies with employee engagement.  

If the feedback is negative, it generally means the employee has issues that he or she needs to improve. To formally communicate how these deficiencies can be corrected, you may want to develop a performance improvement plan, also called a performance action plan.  

What is a Performance Improvement Plan (PIP)? 

A PIP is a formal document stating an employee’s failure to meet specific job goals and what needs to be done for him or her to be in good standing with the company.  

PIPs aren’t the answer to every performance problem, however, so it’s important that managers and HR professionals know when to use them. 

How do I know whether a PIP is appropriate? 

PIPs should be used when there’s a genuine desire and commitment to help the employee improve, not as a way for managers to vent their frustration and ultimately fire employees. It should send the message (to the employee) that help is available and that his or her manager is dedicated to guiding him or her along the way.  

Factors influencing whether a PIP is warranted include: 

      • Substantiation for the PIP. The manager should be able to justify the need for the PIP by demonstrating the employee’s performance shortcomings and any prior warnings and guidance given to the employee.  
      • Manager commitment. As stated earlier, the manager should be committed to helping the employee improve. The HR professional tasked with developing the PIP must try to figure out whether the manager has the employee’s best interest at heart.  
      • Root cause. Because the PIP is a goal- and solution-oriented tool, it doesn’t allow you to delve into the whys of the employee’s deficiencies. You’ll need to draw on other strategies to find out why the problem exists and then determine whether a PIP is the appropriate solution. 


When should a PIP be developed? 

Using one example, the University of Oregon’s website states that PIPs are typically used in conjunction with or after a letter of clarification or a letter of reprimand.  

A letter of clarification informs the employee of his or her performance issues that could result in disciplinary action if unaddressed. A letter of reprimand is a documented disciplinary step that goes in the employee’s personnel file. 

What should I put in the PIP?   


      • Performance expectations, including the job description. 
      • How the employee failed to meet the performance expectations, including dates and any supporting documentation. 
      • Measurable and specific goals for rectifying the deficiencies. 
      • PIP duration, such as 30, 60 or 90 days.  
      • Resources to assist the employee, such as seminars, training or coaching. 
      • How often feedback will be administered to the employee, such as once per week or once every two weeks. 

Last, the PIP should leave no doubt about the ramifications of not fulfilling its objectives. Consequences may include demotion, transfer to a different role or termination. 

Original content by Payroll Partners Newsletter, Copyright © IndustryNewsletters, All rights reserved – October 2, 2020. This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.