Performance Improvement Plan (PIP) explained

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One of the most difficult tasks of a manager, or a business owner, is dealing with an employee whose performance isn’t cutting it. However, letting poor performance go unchecked has negative consequences. Not only are the people who work with the individual affected, but it also sends a message that you’re not serious about maintaining consistent, high performance standards.

What can you do if you find yourself in this situation with one of your employees? Consider implementing a Performance Improvement Plan -PIP-.

Simply put, a performance improvement plan (PIP) 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. It typically lasts for 30 to 90 days.

Let’s examine when a PIP is appropriate, and when it’s not.

When a PIP makes sense

  • When your employee has historically been a good performer and the performance issue is a recent anomaly
  • When your employee has potential and most other areas of performance meet expectations
  • When the problems are fixable
  • When a labor agreement dictates it as a must-have process when there’s a performance issue
  • When your employee is going through personal challenges, and the window for accommodation is closing
  • During probationary period, if your new hire is a keeper but additional time is needed to assess a fit or skill set. In that case, this will be in the form of an extension of the probation period.

When a PIP doesn’t make sense

  • When your sole intention is to create a paper trail to terminate your employee. This is definitely not the purpose of a PIP. Unfortunately, too many employers distort the principles of a PIP. A performance improvement plan is to be used only when there is a genuine interest and belief that the employee’s performance will improve.
  • When there’s evidence that a performance issue has a low likelihood of correction
  • When your employee has been with you for a significant period of time, has historically been a mediocre performer and has never been provided with feedback or training.
  • When your department or company’s direction has changed and your employee’s competencies are significantly misaligned with the new job requirements.
  • When there’s a serious incident such as theft, violence or gross insubordination.

If you find yourself in any of the above situations, write your employee a severance check and terminate them. In case of theft and the likes, writing a check is optional. Termination is not.

PIPs are not a trap for employees

Your employee should never be called to a meeting where you present them with a PIP, “out of the blue”. They should already be aware there are problems with their performance.

When a PIP is not implemented correctly, too often employees interpret it as the first step in inevitable termination or they’re unable to absorb the feedback as anything but antagonistic. In these cases, the employees may become toxic, resign or in a worst case scenario, go on extended sick leave.

Correctly implementing a PIP takes some time and efforts. It’s also a serious undertaking. But, it can work. If you are not sure a PIP is appropriate for your situation, or if you don’t know how to implement one, please contact us. We will gladly assist you!

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