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A performance improvement plan (PIP), also known as a performance action 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.
Outcomes may vary, including improvement in overall performance; the recognition of a skills or training gap; or possible employment actions such as a transfer, demotion or termination.
HR's role includes:
Step 1: Determine if a PIP is appropriate
A PIP should be used when there is a commitment to help the employee improve, not as a way for a frustrated manager to start the termination process. Used as the latter, it's nothing more than a document trail that should already exist, and it signifies to all employees that no such help is available. Bottom line: HR needs to assess if a structured plan with time-sensitive goals is the appropriate next step, or if a PIP will be more of a detriment than an aid.
To assess whether a PIP is warranted, HR should consider the following:
Step 2: Develop a Draft Plan
Once the need for a PIP has been established, have the manager create a draft of the plan for HR to review. An improvement plan should include:
Employers may choose a letter format or use a standard form when creating a PIP. See two samples below:
Step 3: Review the Plan
HR should review the plan with a focus on removing any bias against the employee. Is the performance issue clearly stated and well-substantiated? Are the objectives fair and the time frames reasonable? For example, is a salesperson given a sales goal that far surpasses the projected sales of the clients assigned? Is the employee being given the proper tools and training needed to improve? If it's a relatively new employee, was an adequate onboarding effort in place to help the employee become acclimated? If HR has a role in making those provisions, that process should start immediately. The key to this step is to ensure that the plan is attainable and fair and not just a means to terminate an employee.
Step 4: Implement the Plan
It's time to meet with the employee to discuss the plan and expectations. While not the most pleasant of meetings, it helps if the manager conveys his or her own commitment to the plan and to the employee's success. Employee feedback should be encouraged to help identify areas of confusion and to help foster ownership. Be open to changes based on the employee's input; the perspective of a valued employee (one worth the time and effort of a PIP), is no less valuable here and may lead to a more-effective plan.
After fully discussing the plan, the manager may make modifications based on employee feedback. Once HR has reviewed any changes, the final plan should be signed by both manager and employee and forwarded to HR for approval.
If the employee is unable to commit to the PIP process at this point, the employer will need to determine whether termination, demotion or another appropriate employment action should be taken.
Step 5: Monitor Plan Progression
The manager should ensure all progress meetings are scheduled and occur on time. Cancelling meetings or showing up late would convey a lack of importance and commitment on the manager's part. Progress toward goals should be documented and discussed, seeking to identify why improvements have or have not been made. If gaps in training or required tools become apparent, provide those as soon as possible. Encourage employees to lead these meetings, to self-report on how they believe they are doing and what realizations they might have made, or what else they feel they need to succeed.
Successful progress made toward the goal should be recognized as a means of motivating the employee to continued improvement.
Step 6: Plan Conclusion
When the employee has responded positively by meeting plan objectives, possibly before the expiration date of the plan, the employer should formally close the PIP, recognize the employee's success and allow the employee to continue employment. While a positive occasion for the employee, the manager must be sure the employee understands that continued good performance is expected.
If an employee is unable to improve or if his or her performance worsens, the PIP should be closed, and a possible reassignment, demotion or termination should be considered, based on the specific circumstances.
When the employee is committed to improvement, but falls short of the objectives within the established timeline, it may be worthwhile to extend the plan to give him or her a bit more time to succeed. Additionally, if objectives were found, in retrospect, to not be realistic or fully within the employee's control, the plan might be ended successfully, based on the improvements achieved.
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