Did you know that poor employee performance costs the US economy over $450 billion yearly?
These figures from Gallup show that a reliable, adaptive, and talented workforce isn’t a given; it’s something you build with commitment, dedication, and respect.
But what happens when employees aren’t meeting performance expectations? Performance Improvement Plans (PIPs) are structured ways to eliminate performance issues and ensure employees are accountable for their work.
Discover what they are and how to implement PIPs in this comprehensive guide.
What is a Performance Improvement Plan?
Performance Improvement Plans are roadmaps that detail issues with an employee’s performance. These can include failing to meet KPIs or not fulfilling their responsibilities.
Unlike Employee Development Plans, which serve as goal-setting roadmaps, PIPs are often considered a last resort for underperforming workers.
These documents detail areas that need work, set measurable goals, and outline time limits for the changes.
It’s important to remember that management should only implement PIPs when the employee is failing to meet performance targets.
While they might seem like punishments, these roadmaps can save jobs and facilitate better communication between the employee and management.
Why might employees need a PIP?
Let’s get one thing straight: PIPs aren’t necessarily a disciplinary measure. Even if an employee is working hard, their performance could still suffer. Next, we’ll explore the most common reasons employers might issue plans.
Not meeting expectations
Most workplaces set clear expectations for new employees; failing to meet those could impact organizational-wide goals. From not hitting sales targets to missing deadlines, there are many reasons why someone might fail to meet expectations.
Performance Improvement Plans could address high stress levels, a lack of training, and other factors that cause employees to fall short of expectations.
Skill gaps
Technology seems to be on a never-ending upward trajectory, which means workplaces must adapt quickly. Every workplace is responsible for providing training to fill technology skills gaps, but some employees might struggle more than others.
PIPs can use SMART goals to encourage employees and support their learning journey. It might just be a case of providing more intensive training or holding regular meetings with the individual to help them meet set benchmarks.
Behavioral issues
Disengagement from work, a lack of motivation, and other behavioral issues can impact operational efficiency. Many workplaces implement PIPs as disciplinary measures, but they can also be valuable ways to encourage improvement.
When introduced correctly, these plans can help employees understand their roles and enable them to contribute to company-wide objectives.
The benefits of PIPs
Performance Improvement Plans offer a range of benefits, including outlining expectations, establishing accountability, and enhancing profitability. Let’s explore them in more detail.
Outlining expectations
A PIP details where employees are falling short and outlines the steps they need to take to improve. Communication breakdowns between management and employees occur, but setting clear expectations makes it easy to establish accountability.
It also means that there’s no confusion regarding performance goals, making the path forward crystal clear.
Structured approach
These plans offer a clear and structured way for employees to understand their weaknesses and improve. Instead of just telling employees that they’re underperforming, PIPs offer set goals and a strategy for meeting them.
Employees also have a second chance to prove their commitment to a company and grow within their roles.
Protecting the company
Performance Improvement Plans track performance issues and outline the measures to address them. They provide a clear record of what’s been done to improve the situation and can be invaluable if the employee is terminated.
For example, if the employee takes legal action, a PIP can provide vital evidence that the company aligned with employment laws and did everything possible to avoid dismissal.
Boosting engagement
Disengaged employees can limit a company’s productivity and lead to low retention rates – but PIPs can lead to higher engagement levels.
Remember, these plans aren’t always about disciplinary measures; they can also make employees feel supported and boost morale.
Examples of Performance Improvement Plans for employees
So, now you know about the many benefits PIPs offer, it’s time to look at some great examples. The following scenarios highlight how these plans can lead to growth for employees and move the company towards its goals.
Attendance problems
Every business manager and HR department has dealt with absences. Some sick days are genuine, while irresponsible employees, mental health, burnout, and a general lack of motivation often cause others.
Attendance management is a typical example of a performance improvement plan because it causes issues across all industries. The plan could outline targets for attendance and track when employees are late or call in sick.
Target setting
If an employee seems to be struggling to meet performance expectations and falling behind, a tailored improvement plan can address areas of weakness. For example, these plans can set benchmarks that help employees meet sales goals or other targets.
Management can assess what the employee needs to succeed, including more training or support, and ensure their performance is tracked against key metrics.
Top tips for creating an effective Performance Improvement Plan
If you’re new to PIPs, creating one can be a daunting experience. We’ve put together some fantastic tips that simplify the process and ensure your plans achieve positive outcomes.
Know what you’re dealing with
Before looking at each employee’s performance, you need to understand organizational objectives. Are you trying to increase revenue, or is company culture your main concern?
Knowing this means you can measure individual performances against how they align with the company’s bottom line.
Look at:
Performance metrics
Skills gaps
Attendance problems
Engagement rates
Having clear employee performance benchmarks enables you to identify people who require additional support.
Create a structured plan
When it comes to Performance Improvement Plans, clarity is vital. When creating a document, remember to focus on the following areas:
Introduce The Plan: Let the person know why you’re creating the plan and outline its purpose. Mention any previous meetings where the employee’s performance was discussed.
Back Everything Up: Instead of just listing areas for improvement, remember to detail clear examples and use data wherever possible. It’s not to trap the individual but to help them see where things have gone wrong.
SMART Goals: It’s challenging to set employee goals that work, but the SMART approach makes it easier as the goals are specific, measurable, achievable, relevant, and time-bound.
Feedback: Set dedicated check-in points and feedback sessions to evaluate whether the employee’s performance is improving. These sessions are also valuable for the individual, as they can discuss concerns.
Be Clear: Set clear expectations and consequences if employees don’t meet their goals.
As you can see, PIPs are relatively straightforward once broken into actionable steps. You can also use a Performance Improvement Plan template, which simplifies the entire process.
Arrange a meeting
The HR department should arrange a formal meeting with the individual to discuss why a PIP is the correct move. These meetings aren’t about singling the employee out and detailing their faults, but it’s important to clearly state why there are performance problems.
Always ask if the employee has any questions and take time to listen to their concerns. Approaching the situation with empathy can motivate the employee to view the plan as a chance for improvement.
Track progress
Implement regular meetings and use tracking tools to monitor progress. For example, SMART goals can accurately track whether the employee is reaching them and offer support along the way.
Positive reinforcement is vital here; minor improvements deserve encouragement. At the same time, you should offer constructive feedback when the individual isn’t meeting their performance benchmarks.
Evaluation
All Performance Improvement Plans should have a set timeframe, enabling you to evaluate the individual’s progress and take further measures. If the plan’s worked and your employee has reached all benchmarks, you can move on.
If it doesn’t work, there are multiple options, including:
Extending the plan’s duration to allow more time for change to happen.
Implementing further training to fill skill gaps.
Terminating the employment contract.
Termination should always be a final measure after exploring all other avenues.
Key takeaways:
Performance Improvement Plans aren’t disciplinary proceedings; they’re a learning opportunity for underperforming employees. Remember to approach them fairly and ensure the employee understands the plan’s purpose.
Always use an objective tone and back up any performance issues with data. Try to avoid using emotional language and let the employee know that you’re trying to help them achieve more.
Outline clear expectations and ensure the employee understands their role. Remember to ask for feedback and provide adequate training if the individual requests it.
Check-in regularly and conduct progress reviews to monitor the employee’s performance. Only terminate the contract if you’ve done everything possible to support them.
The bottom line
Performance Improvement Plans are excellent ways to ensure employees contribute to organizational goals and grow professionally.
Implementing them correctly can decrease staff turnover rates, create a better workplace culture, and improve your company’s profitability. Now, all you need to do is act on the tips mentioned in this guide and look forward to skyrocketing performance rates.
The post Building a Stronger Workforce: The Role of Performance Improvement Plans first appeared on HR News.