How to Create Effective Performance Improvement Plans (PIPs) That Drive Success
At one point or another, every manager is going to have an underperforming employee. Whether they aren’t meeting job requirements or is consistently exhibiting behaviors that are not in line with company expectations, the manager will reach a point where it is clear that the situation needs to change. When an employee is not performing well or reaching their full potential, it is not just the manager and employee who suffer. The whole team and company can eventually feel the knock-on effects of these behaviors – the overall result is frustration, wasted time, and demotivated people.
Firing an employee might seem to be the logical course of action at this point; however, we urge HR and Managers to consider another approach: formal performance improvement plans (PIPs). The process of identifying root causes of poor performance, outlining clear expectations for improvement, and giving the employee a chance to remedy shortcomings, could not only save time and costs related to termination and re-hiring, it creates a culture of performance accountability for employees and their managers.
This sounds great, but not every employee finds it easy to take criticism — but that doesn’t mean they don’t welcome their reviews. Employees want to develop and grow into their roles, but 53% of employees report that reviews don’t make them work any harder.
The majority of employees believe that their reviews are inaccurate, leading them to dismiss the findings altogether. Through a performance improvement plan (PIP), organizations can find ways to give positive encouragement to struggling employees, while helping them develop their experience and skillsets in a way that aligns with their goals.
What are the benefits of a performance improvement plan?
A performance improvement plan shows the employee that the organization understands their current challenges and long-term goals and will take an active role in supporting them. Employees are more likely to be engaged and productive if they understand what the organization expects. PIP’s outline in detail any issues or behaviors that are causing problems, corrective actions to take to improve, and what meetings and resources will be available to offer support.
Performance improvement plans aren’t only designed for those who are falling short of their current requirements, but also for those who are currently feeling unfulfilled in their roles. Improvement plans can be used to increase employee mobility, allowing them to transition into higher-level roles or move laterally into roles that they feel they are better suited for. All of this creates a better trained, more talented workforce.
When should you implement a performance improvement plan?
Performance improvement plans are most useful if an employee is struggling. Whether their work productivity has decreased or they have started taking more time off, many managers can identify an employee who has become disengaged from their work. As mentioned before, PIPs should be implemented when there is a clear trend in poor performance and positive change and improvement are needed. The goal of a PIP should not be to document performance so that you can easily fire (although PIPs can serve as useful records), rather as an opportunity for the employee to right the ship.
Open lines of communication are important with PIPs and the ultimate goal should always be to find a satisfying solution for the organization and the employee. Managers need to reach out to employees to see what they need to deliver the work they are capable of.
How can you improve the effectiveness of a performance improvement plan?
- Listen to your employee and allow them to respond to any of your points. The PIP is a collaborative process. Employees become disengaged when they feel they are misunderstood or when they feel as though they aren’t being met halfway.
- Pare down to the cause of any issues at work. Does the employee feel as though they don’t have a future with the organization? Are they ready for a more challenging role? Or are they dealing with personal issues outside of the spectrum of the business? Issues should be specific and supported with examples to ensure the employee understands the opportunities and changes needed.
- Focus on the positive aspects of the employee’s relationship with the company. Emphasize their valuable attributes and work with them to find ways to improve on these positives, rather than harping on the negatives.
- Give them a clear path. Employees need to understand their goals and the actions to take to meet expectations of performance and behavior. The more precise their goals are, the easier they will be to obtain. Vague goals can feel confusing or frustrating and can make employees feel as though they are spinning their wheels.
- Regularly review employee progress. Track the employee’s performance and touch base with them at regular intervals to keep them motivated. Employees will appreciate being given a chance to talk about any concerns they’ve developed and have access to support and resources to execute the plan. We suggest formal 30-60-90 day meetings with frequent informal check-ins in between. All encounters should be focused on progress and the employee should be allowed to comment on improvements and ask questions or for clarification.
Of course, just as a PIP needs to be rewarding, there also need to be clear consequences outlined for a failure to meet goals. The PIP establishes an agreed-on plan between the employee and the organization regarding the best way to improve their results. If the employee breaks this contract, there should be a transparent set of circumstances. These should be outlined at the beginning of the PIP process and employees should confirm that they understand.
What can go wrong?
Having a development conversation isn’t easy for anyone, and if a manager says it’s easy, they are either lying or not doing it correctly! Even though good managers will find a way to deliver the message with respect, caring, and noticeable concern and support, employees might feel defensive and put off. This is why the conversation is awkward. In order for PIPs to be effective, the conversation has to happen and managers need to be prepared to face the music alongside their employees.
We recommend a few ways to ease the potential sting of PIP’s:
- Document behaviors and accounts of performance: This is the easiest way to take any vagueness out of the conversation. It is much easier for managers to comment on actual behaviors and examples than to make unclear statements.
- Make sure it is a trend in performance: Although even top performers should be striving for ongoing development, most employees will see a formal PIP as a substantial event. Managers should be certain that poor performance or undesirable behaviors are actual trends, instead of being anomalies that we all can experience from time to time, otherwise, you risk damaging your relationship with the employee and demotivating them.
- Keep it focused on performance: managers should avoid personal attacks on employees. PIPs should always be centred on results and performance instead of motives driving those items.
Performance improvement plans can be the formal process for helping managers deal with poor performance, but it also promotes a culture of accountability within the company. By creating encouraging, effective performance improvement plans, organizations can improve their outcomes and retain the best employees. Ultimately, this will lead to a high-performing pool of talented and focused individuals.
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