When is the Right Time to Initiate an Employee Performance Improvement Plan?

Sometimes an employee’s personal life can temporarily affect their work, causing their performance to slip. That’s completely normal. But when you notice that an employee is consistently struggling, missing deadlines, missing work, or just generally disengaged from the company, it’s probably a good time to initiate a performance improvement plan (PIP).

What is an Employee Performance Improvement Plan (PIP)?

A performance improvement plan is a structured, formal document that typically addresses performance or behavioral issues and includes clear steps for getting an employee back on track. These plans can also be used for new employees during a probation period.

Traditionally, a performance improvement plan is a method used to retain a valued employee who has shown an unusual drop in performance. Most performance improvement plans last from 30 – 90 days and can be the last stage before termination, though that is not always the case. A well-structured plan should include input from the employee and their manager, and all parties should be committed to the solving the problem.

When Should You Implement an Employee Performance Improvement Plan?

Many employers have questions about when to use a performance improvement plan. In most cases, a plan is created:

• When a traditionally good employee shows an atypical decrease in productivity.
• When an employee is performing well in some areas but is struggling in others.
• When someone is having problems in their personal life and those issues have carried over into their work.
• When a new employee is completing a probationary period.

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What are the Benefits of a Performance Improvement Plan?

A performance improvement plan gives a once-valuable employee feedback on exactly where they need to improve, and it empowers them to take control and fix the problem. It also shows them that you are invested in their success. Equally important, it helps protect your employer brand, and it could save you from litigation if performance doesn’t improve and you are forced to terminate the relationship.

In the case of new employees, a performance improvement plan can communicate your expectations for the position and give them an opportunity to experience success early in employment. Consider creating a plan as part of your regular onboarding process.

What Does an Effective Plan Look Like?

Effective performance improvement plans generally include:

1. Mutual Acknowledgement of the Issue. The employer and employee should both agree that there is a problem and should collaborate on how to correct the issue.
2. Supportive Language. You should let the employee know they are a valuable member of the team and that the goal of the plan is to keep them with the company.
3. SMART Goals. Goals should be Specific, Measurable, Achievable, Relevant, and Time-bound.
4. Continuous Communication. Both parties should agree to communicate regularly and, in some cases, daily via email, virtual meetings, and regular check-ins.
5. Scheduled Check-ins. Regularly scheduled check-ins are essential to the success of a performance improvement plan and should be held throughout the duration of the plan.
6. A Timeline. Make sure employees are aware of deadlines, check-ins, and other milestones, including the date when the performance improvement period will end.
7. Training. Employers should provide necessary training, such as skill-building or behavior coaching, to ensure that the employee is successful in their effort to improve performance.
8. Defined Consequences. Employees should be clear about what will happen if they don’t meet the performance goals laid out in the plan.

When Shouldn’t You Use a Performance Improvement Plan?

There are some circumstances where it doesn’t make sense to implement a performance improvement plan. Those include:

• When the problem isn’t likely to be corrected. Sometimes it’s clear that an employee is just not the right fit.
• If the issue is with a long-term employee who has a history of poor or mediocre performance.
• When the goal is to ultimately dismiss the employee. Don’t waste everyone’s time.
• When your company’s goals have changed and the employee is no longer suited for the position.
• When the employee has engaged in behavior that is illegal, such as theft, harassment, or violence.

How Can You Get Started?

Now that you know when to use a performance improvement plan, you might be wondering how to get started. There are countless examples of performance improvement plans and free templates online. There are also consultants who are dedicated to helping companies like yours initiate and direct performance plans and many offer independent arbitration. Finally, ask colleagues for recommendations, reach out to professional groups, or contact Customer Success at iHire for advice on getting started.

Initiating a performance plan is never easy, but if it is successful, you can potentially retain a valuable employee, avoid costly litigation, protect your employer brand, and your company will benefit.