How to Do Employee Performance Improvement Plans Correctly

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How to use Performance Improvement Plans Effectively for your Employees


I know what you’re thinking, This sounds so corporate. It does, but hear me out anyway. Performance improvement plans (or let’s just call them PIPs), can save you from severing someone from your company. 

If you think everyone deserves a second chance, this is where that knowledge comes into play. It gives your struggling team member an effective improvement plan to give second life to their performance. Sometimes, people just need guidance-we all lose our way time to time.

With that said, here’s how to do a performance improvement plan the right way.

Performance Improvement Plan Myths

Before we get into the nitty-gritty of things, let’s discuss how team members often feel when they hear about performance improvement plans. The first thing that comes to their mind is, Oh no, I’m getting fired. 

That’s not the case at all. A performance improvement plan isn’t supposed to be intimidating. Employees should think of them as a helping hand; guidance as to how to improve. Have them think of it this way: if you wanted to fire someone, you’d do just that, not spend time customizing an action improvement plan for those struggling!


Myth #1: Once a year performance reviews are enough

An employee performance improvement plan (EPIP) is a strategy that Human Resource (HR) professionals use to help employees improve their work performance and, as a result, the company’s bottom line. EPIPs can take many different forms, but they all share the same goal: to identify and correct employee performance issues in a timely and effective manner.

The frequency of performance reviews is one of the most important factors in determining the accuracy of those reviews. The less often reviews are conducted, the more likely it is that they will be inaccurate.

This is because annual reviews don’t give the organization an opportunity to course-correct and improve throughout the year if something goes awry during the course of the year – the employee could be over- performing in his/her current role, but then slowly losing motivation and seeking greener pastures elsewhere.

There might be individuals who need training to achieve their goals. Ignoring these factors can be an impediment to the organization’s growth.

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Conducting performance reviews on a yearly basis is not enough. This can do more harm than good, as you run the risk of having inaccurate assessments.

The less frequent the review process, the more likely it is that assesses will be wrong. Additionally, annual reviews don’t give the organization an opportunity to course-correct and improve throughout the year if something goes awry during the course of employee’s work life -the employee could be over- performing in his/her current role, but then slowly losing motivation and seeking greener pastures elsewhere.

There might also be individuals who need training to achieve their goals within the company. Ignoring these factors can have a negative effect on employee morale and on organizational productivity as a whole. Therefore, it is essential that companies find a balance between conducting too many performance reviews (which can be exhausting for both employees and managers) and not conducting enough of them. Quarterly or semi-annual reviews might be more appropriate for some organizations.

Others might benefit from monthly or even weekly check-ins. The key is to figure out what works best for your company and your employees and then stick to that schedule as closely as possible.

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Myth #2: Performance management just helps identify the rockstars and underperformers

A performance review is an important tool for assessing employee’s performance and identifying areas to improve performance.

However, it is also an opportunity for the organization to show its employees that it is invested in their career growth. By taking the time to listen to employee concerns and feedback, and by providing an employee’s performance improvement plan, the organization can show its employees that they are valued members of the team.

As a result of laying out an employee performance improvement plan, employees will be more likely to stay with the organization over the long term, and their performance is likely to improve if they see they were demonstrating poor performance. Therefore, a well-structured performance review process can have many benefits for both the employee and the employer.

Myth #3: Employees know their job, they don’t need performance reviews or management.

No matter how well a certain employee is performing, it is always important for the organization to keep track of their performance.

This can be done through different performance improvement plan processes that assess an employee’s progress. When the employee knows that their performance will be reviewed periodically, it increases the quality of their work and they put in more effort to meet the organization’s goals. Furthermore, regular performance reviews help to identify any areas where an employee may need improvement.

By tracking performance and providing feedback, organizations can ensure that all employees are meeting expectations and contributing to the success of the business.

Myth #4: Performance assessment scores don’t vary much. Almost everyone gets an average score

Performance appraisal scores vary across individuals. Rating employees and seeing the distribution of performance can be a highly beneficial part of performance reviews.

While comparing employees can have its drawbacks, there certainly is no guarantee that assessment scores will be the same across a company or even a department or team.

By performance appraisal score, we are measuring an employee’s progress in meeting the performance goals and objectives that have been set as part of the performance improvement plan process. This comparison is useful in identifying areas of improvement for individual employees as well as setting expectations for future performance. In some cases, it may also be necessary to compare employees in order to identify top performers who may be eligible for promotions or other opportunities.

While this can create feelings of competition, it can also motivate employees to improve their performance in order to meet or exceed the standards set by their peers. Ultimately, the goal is to use performance appraisal scores as a tool for promoting individual and organizational success.

Performance Improvement Plans the Right Way


Performance improvement plans are there to help, not hurt. The correct way to draw up a a performance improvement plan is to include recurring performance issues (they need to know what to fix, right?) and goals for them to achieve in those categories. You can also let them know in the document that failure to retain good standing could result in severe repercussions. 

The point is to give them concrete advice so they can improve their performance. Knowing what needs to be worked on is sometimes enough to get them motivated. If they’re in a slump, this might be the kick-in-the-butt to get them out of it.

Performance Improvement Plans for Success

It’s worth noting this document is like a two-way street. It requires communication on both parts. Your employee on a performance improvement plan should check in with either you, their manager, or HR. If they have questions, make sure they can get clarification. They’re probably a little freaked out being on a performance improvement plan, so open the lines of communication so they can be successful (and, in return, your business can be successful).

You can also pair your struggling employees with ones that are stellar performers. By letting them shadow the top team members, they can see first-hand how they conduct themselves and excel at their work. It’ll help build their confidence, instead of them fearing a firing.

Five Steps to An Effective Performance Improvement Plan


1. Identify any underlying issues

It’s important to get to the root of performance problems before putting together a performance improvement plan. Otherwise, you risk addressing the wrong issues and not seeing any improvement in performance.

There are a few different ways to identify performance problems. One is to simply ask the employee what they think the problem is. Another is to look at data, such as absences, training and performance reviews. If there are patterns or trends, they may point to an underlying issue.

Once you have a good understanding of the performance issue, you can start putting together a performance improvement plan. This should involve setting specific goals and outlining a timeline for reaching them. There should also be a clear explanation of what will happen if the employee fails to meet the goals.

2. Involve the employee

When it comes to employee performance, one size does not fit all. What works for one employee may not work for another.

That’s why it’s important to involve the employee in the performance improvement process. Sitting down with the employee and having a frank discussion about your concerns and what needs to change is a good first step.

This will allow the employee to add their perspective and be open to any ideas they may have about what they need to do to improve their performance. It’s important to remember to be firm but friendly when having this discussion.

The employee needs to be under no illusions about the fact that their work or attitude is lacking, but they also need to feel that you have a genuine desire to help them get better and will support them in whatever way necessary. In some cases, it may be appropriate to involve HR at this stage.

3. Set clear objectives

A good employee performance improvement plan (PIP) should be a formal document that sets out clear objectives for the employee.

The employee needs to be crystal clear about exactly what you want them to do differently, by when, and how this will be reviewed or measured. Make sure any objectives or targets you set are realistic and can be achieved within an appropriate time frame.

People will feel defeated before they start if what you are asking is so stretching that it seems unachievable.

Try breaking objectives down into small steps or chunks and have regular informal check-ins.

That way people can see themselves making progress and will also have regular opportunities to discuss any issues or obstacles they may be experiencing along the way. Make sure you keep a full record of all discussions on your HR software.


4. Agree training and support

When an employee is not performing up to par, it is important to take a look at the root of the problem.

Often, lack of appropriate skills can be at the heart of poor performance. This can happen when someone is thrown in at the deep end from day one on the job, or when their role changes and they are now being asked to handle new work or operate in unfamiliar areas. In these situations, training and development should be an integral part of the Performance Improvement Plan.

Once you’ve identified skill or knowledge gaps, you can think about the best way to plug them. This doesn’t always have to involve sending people on a formal training course – although there will be times when this is exactly what they need.

Sometimes job-shadowing a colleague can be an effective way to build trust and confidence. By taking the time to invest in your employees’ development, you can help ensure that they have the skills and knowledge necessary to excel in their roles.

5. Review progress regularly

Prior to performance review meetings, employer and employee should commit to regular, scheduled check-ins.

These check-ins will help to establish a friendly and informal setting in which the employer can provide performance-based feedback and the employee can document their progress. Online HR management systems, make it easy to keep track of conversations and performance goals.

Documentation is essential in an employee performance improvement plan, as it provides a clear trail of communication should performance not improve. Having a well-documented performance improvement plan gives the individual a target to work towards and the employer the opportunity to make sure that agreed-upon goals are actually being met.


Your Employees will Appreciate Performance Improvement Plans

Sometimes we get lost in our careers. It doesn’t matter if you’re an owner, manager, or entry-level employee-it happens. A performance improvement plan shouldn’t be anything to fear. If anything, when used the right way, they’ll help struggling employees get back on their feet and improve their performance.

Read Radical Candor: Be a Kick-Ass Boss without Losing your Humanity for more on how to have difficult conversations, and give necessary feedback. 


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