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How to Establish a Performance Improvement Plan
 

   7/9/2013

 

A performance improvement plan (PIP), also known as a performance action plan, is a great way to give struggling employees the opportunity to succeed while still holding them accountable for past performance. It is not always clear why an employee has poor performance. Did he or she not receive appropriate training? Does the employee not understand the expectations of the job? Are there unforeseen roadblocks in the way?  Until you allow for open dialogue and feedback, you may not know whether you provided an employee the opportunity to be successful.

Step 1: Document performance issues

The first step in the PIP process is for the supervisor to document the areas of employee’s performance that need improvement. In documenting the main performance issues, be objective and specific. Provide facts and examples to further clarify the severity or pattern of performance concerns. Examples of detailed documentation are included in the two scenarios at the end of this guide.

When developing a performance improvement plan, you may wish to use an established format. At the end of this guide are sample performance improvement plan templates that may assist in your documentation and communication.

Step 2: Develop an action plan

Next, the supervisor should establish an action plan for improvement. This action plan should include specific and measurable objectives that are accurate, relevant and time-bound (otherwise known as SMART goals).

SMART goal examples:

  • In May, June and July, Jane Doe must have less than 3% quality errors per month and produce at least 150 units per month.
  • During this 90-day performance evaluation, John Doe must have perfect attendance. This means that he must clock in and be ready for work by the start of each scheduled shift, return from all scheduled breaks on time and remain at work for his entire shift.

Determine if the employee may need any additional resources, time, training or coaching in order to meet these objectives. Identify in the plan exactly what management will do or provide to assist the employee in achieving these goals.

This action plan should help set performance expectations and should include a statement about the consequences for not meeting these objectives. If termination is a possibility, it should be clearly communicated in the plan document.

Step 3: Review performance plan

Prior to meeting with the employee, the supervisor should seek assistance from his or her manager or an HR professional to review the PIP. This third party should ensure the documentation is stated clearly and without emotion. The third party can also review the suggested action plan to ensure it is specific, measurable, relevant and attainable within the PIP timeline (PIP timelines are commonly 60 or 90 days in length).

Step 4: Meet with the employee

During this meeting, the supervisor must clearly lay out the areas for improvement and plan of action. You may need to modify the action plan slightly after receiving the employee’s input and feedback. Make any changes to the plan before the supervisor and the employee sign the PIP form.

Step 5: Follow up

The employee and supervisor should establish regular follow-up meetings (weekly, biweekly or monthly). These meetings should discuss and document progress toward objectives. But ultimately, it is best when an employee is provided the opportunity in follow-up meetings to ask questions and seek guidance or clarification on performance expectations. The supervisor should ensure any potential roadblocks are discussed and that the employee has been provided the necessary tools and training.

Step 6: PIP conclusion

If an employee is unable to improve, refuses to commit to the PIP, or his or her performance actually gets worse, then the employer should close the PIP and terminate employment.

When the employee does show some improvement but is unable to achieve some or all of the established action plan objectives within the PIP timeline, there are a few options.

  • If the employee is trying his or her hardest but just can’t meet one or more objectives, the employer may agree to extend a PIP for a few more weeks or months.
  • If the employer determines in retrospect that the objectives were too hard or not completely within the employee’s control, the employer may decide to either extend the PIP or end the PIP due to the progress that was observed.
  • If the employer determines the employee just isn’t a good fit or isn’t really trying to improve even after all this effort, then the employer should terminate employment.

When the employee has responded positively by meeting the objectives, the employer should formally close the PIP and allow the employee to continue employment. This should be a positive occasion for the employee, but be sure the employee understands that continued good performance is expected. Two scenarios below provide examples of PIP closure situations.

Example 1

Scenario:An employee has perpetual problems with attendance.

Actions:

  1. Documentation of problem or concern: A pattern of calling in sick on Fridays and Mondays has been observed. Employee has exhausted all available PTO. The employee had five unexcused absences and has been tardy for his shift nine times in the last month. Attached is a list of attendance issues over the past two months by day of the week and hours missed. Employee has received two prior attendance warnings.
  2. Action plan, SMART objectives and consequences: Employee will arrive at work prior to the start of each work shift and clock in on or before his start time. Employee will promptly return from scheduled break times and work until the end of each shift. This is the final attendance warning; failure to work all scheduled shifts in their entirety during the next 90 days or continued attendance issues beyond this performance improvement plan may result in discipline up to and including immediate termination of employment.
  3. Possible PIP resolution: Employee was on time for all of his shifts, except for one instance when the employee had already scheduled to come in late due to student-teacher conference for his daughter. The expectations were too stringent and did not take into account leave time covered under company leave or state leave laws. Since employee otherwise met all expectations, the PIP was determined to be successfully completed. Employee is expected to continue having good attendance, and he is made aware that future attendance issues may result in termination without another warning or PIP.
  4. Alternative ending: During the first month on a Monday, employee called in five minutes after the start of his shift, stating that his daughter had missed the bus. Employee explained he was going to drive his daughter to the school and would be half an hour late. Employee arrived to work three hours later. Employee is not meeting PIP expectations and should be terminated. 

Example 2

Scenario:An employee has quality performance errors.

Actions

  1. Documentation of problem or concern: Over the past six months, employee’s monthly quality ratings have been below expectations four times. Departmental quality expectation is less than 3% quality errors per month. Employee has had as high as 15% and 11% quality errors, resulting in $XXX of additional scrap and rework costs in April and May alone. Attached is a report of the employee’s monthly quality ratings over the past year.
  2. Action plan, SMART objectives and consequences: Employee will attend a quality training session with Lisa in Quality Assurance next Monday from 9 a.m. to 11 a.m., which is to include a review of proper procedures and observation of the hands-on work process at the employee’s work station. Employee will be subject to additional quality spot checks from the Quality Assurance team and supervisors during the next three months. Quality errors must drop during the first month of this PIP. During the second and third month, regular monthly reports must show that the employee is achieving departmental expectations for quality and quantity of work (3% or less quality errors and at least 150 products per month) without need for unscheduled overtime. Employee is expected to notify her supervisor and or Quality Assurance team immediately if she experiences any roadblocks that may affect her ability to meet these goals. An immediate improvement in quality ratings and a sustained ability to meet departmental quality and quantity expectations are required for continued employment.
  3. Extending PIP: Employee was interactive in the training and appreciated all of the advice and coaching from Quality Assurance and supervisors. Employee exceeded departmental expectations in the first and last month, but had a quality errors rating of 3.2% in the second month, which is just above the departmental expectation. Employee, unfortunately, was using a new technique taught to her the day before, but didn’t realize until too late that this new technique only works with one product model and not all. She did notify her supervisor and Quality Assurance as soon as she realized her mistake. Due to employee’s attitude, hard work and ability to exceed expectations in the other months, the PIP will be extended for an additional 30 days with the same expectations.
  4. PIP Conclusion: Employee successfully met all PIP requirements during PIP extension. Due to the training received and the employee’s drive to improve, she has pulled herself out of a poor performance situation and into one where she can see and appreciate her own successes. The performance improvement plan is formally closed, although the employee is expected to continue to consistently perform at or above current department expectations. Additional performance issues may result in discipline up to and including termination of employment.

Templates and Tools

Samples

 

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