{excerpted from the article, “How to Establish a Performance Improvement Plan” at the SHRM website. Click here to read the full article.}

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:

• Determining whether a PIP is the appropriate action for the situation.
• Administering all PIPs in conjunction with the manager to prevent bias.
• Providing ongoing guidance to both the manager and employee throughout the plan.

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.

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:

Information on what acceptable performance levels are and how the employee’s current performance is deficient. Specifics regarding the unacceptable performance should be given, including dates, data and detailed explanations. Attach the job description and any relevant employer policies to further clarify expectations.

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

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.

Step 5: Monitor Plan Progression

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. The manager should ensure all progress meetings are scheduled and occur on time. Canceling meetings or showing up late would convey a lack of importance and commitment on the manager’s part.

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. It’s important that the manager makes clear to the employee that continued good performance is expected.

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[/checklist]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.