A performance improvement plan is a management process that aims to improve an employee’s poor performance. The plan specifies how an employee has fallen short of expectations, and it outlines specific steps the employee must take to remain in their role.
What is a Performance Improvement Plan?
A performance improvement plan outlines objectives an underperforming employee must meet to keep their job. A PIP can provide an employee the clarity, structure and resources they need to be successful in their role. Without adequate support, however, it may lead to distrust, resentment and legal liability.
When implemented with a genuine desire to improve the employee’s performance, PIPs can provide employees with the clarity, structure and support they need to be effective in their role. But when a manager doesn’t set attainable goals and realistic timelines or offer adequate resources, a PIP is unlikely to improve an employee’s performance — and it may cause them to disengage from the process entirely.
What Is a Performance Improvement Plan?
In the PIP process, a manager identifies where an employee is underperforming and provides a roadmap to fixing those issues within a specified time period — typically 30, 60 or 90 days. If the employee doesn’t meet the objectives outlined in the PIP, they may be terminated or reassigned to a different position.
A manager typically develops a PIP in collaboration with an HR representative and the employee themselves. The plan is outlined in a document that identifies where an employee has fallen short of expectations, a timeline of specific goals they must reach and the types of support or resources available to help them succeed.
The process can lead to difficult but productive conversations that may reveal roadblocks or bottlenecks the employee is facing. These insights can help managers provide training, support or workflow adjustments to help the employee overcome those barriers.
“I’ve had employees who were just weeks away from quitting (or being let go), but with the right support and clear expectations, they turned it around and became some of our most reliable team members,” Brittany L. Truszkowski, chief operating officer at Grand Canyon Law Group, told Built In.
But PIPs have also developed a bad reputation over the years, as some managers may rush into creating a PIP without clearly articulating expectations, providing timely feedback or having honest conversations about systemic hurdles within the organization.
Many organizations have a policy of putting employees on a PIP before making a termination decision, as the documentation may provide legal protection against a wrongful termination lawsuit. But if a manager has already decided to fire an employee, they probably won’t make a genuine effort to provide solutions or support that will set the employee up for success.
“If PIPs are viewed as ‘the first step to termination,’ or purely an activity that ‘HR makes us do,’ they become a formality rather than a tool for development,” Norma Frahn, founder of On Demand HR Solutions, told Built In. “In those cases, they can destroy morale, damage trust and expose the company to risk.”
How to Create a Performance Improvement Plan
1. Identify Performance Issues
Start out by identifying the employee’s performance issues in as much detail as possible. This could be related to their productivity, quality of work, behavior or another concern. Compile examples of low-quality work or missed deadlines, and use specific data to illustrate where they’ve fallen short of their goals. Talk with the employee to understand the reasons for their poor performance. The manager and an HR representative will use this information to develop a PIP process that addresses these pain points.
2. Set Clear Expectations
Make sure the employee understands what is expected of them by clarifying their responsibilities and goals. If you haven’t already, establish goals that are SMART: specific, measurable, achievable, relevant and time-bound. Here again, talk with the employee to identify any potential obstacles they foresee or any resources they may require.
3. Develop an Action Plan
Once the employee knows what’s expected of them, it’s time to lay out a roadmap that shows them how to get there. The manager, an HR representative and the employee should collaboratively develop an action plan that outlines what tasks the employee must accomplish and the deadline for them to complete those tasks. It’s important for these action items to be specific. Instead of telling an employee to hit their sales quota, for example, specify how many prospective clients they must contact, how many meetings they must arrange and how many deals they must close in a specified timeframe. Suggest strategies, like incorporating generative AI or time management techniques into their workflow, that might help them overcome the challenges they’ve identified in previous conversations.
4. Present the Plan to the Employee
Compile all of the information you’ve gathered so far into a performance improvement plan using the template below. Set up a meeting with the employee to review the plan and address any questions or concerns they might have. The supervisor and the employee should schedule several follow-up meetings throughout the PIP process.
5. Provide Resources and Support
Make it clear to the employee that you are rooting for their success, and offer additional support or resources that may help them reach their goals. This could include additional training, the designation of a workplace mentor or access to new software tools. With a clear action plan and additional support, they will be more likely to bring their performance back on track.
6. Monitor Progress and Provide Feedback
Touch base with the employee during the previously scheduled check-ins to see how things are going. This could be a time to recognize the accomplishments they’ve made so far, help them overcome obstacles they are facing and answer any questions they might have. In some cases, an unexpected circumstance, like a medical emergency or a dropped client, may justify a modification to the PIP.
7. Evaluate and Follow Up
Once the PIP is completed, meet with the employee to evaluate their performance. If they met the expectations, congratulate them and reflect on what worked well for them. If the employee didn’t meet expectations, talk with HR about demoting or terminating the employee. The PIP could also be altered or extended, depending on the circumstances. If the employee successfully completed the PIP, continue to hold regular meetings with them to provide support and feedback.
Why Are Performance Improvement Plans Used?
PIPs are typically used as a last resort to course correct employee performance before the employee is terminated or reassigned to a different role.
It’s important for managers to address poor employee performance, as it not only hurts productivity but can also affect the morale of other people on the team. Instead of rushing to terminate an employee, many organizations find it worthwhile to diagnose the root causes behind the employee’s poor performance. After all, it won’t do much good to replace a struggling employee with a new hire who will run up against the same challenges.
“Before you put pen to paper, sit down with the employee and ask some real questions,” Truszkowski said. “Is something going on at home? Do they feel under-trained? Are they in the wrong seat entirely? Performance issues are rarely just about laziness.”
Managers should be meeting regularly with employees to discuss their performance and provide feedback. If an employee is notified about performance concerns after the manager has already developed a PIP, they may feel — justifiably so — that they are being targeted or set up for failure.
“I strongly believe that PIPs are only effective when honest feedback is already part of the business culture,” Frahn said. “If the PIP is the first time an employee hears there’s a problem, it’s already too late.”
Some organizations implement PIPs without proper support, ending with poor results. Other companies may purposely misuse a PIP as a means of justifying an employee’s termination. In these cases, a PIP may provide the wrong type of paper trail, as a judge will easily see through any attempts to target an employee with vague or unrealistic goals — especially if the company inconsistently implements PIPs.
The misuse of PIPs can also have an impact on company culture. When organizations use PIPs as a precursor to an employee’s inevitable termination, they are likely to stir up resentment and distrust in employees who expected a sincere dialogue.
“To be effective, a PIP needs to be implemented with transparency, empathy and a genuine intent to help,” Stephanie Reitz, director of client services at myHR Partner, told Built In. “It is not intended to just document failure. If not handled thoughtfully, PIPs can create stress, damage trust and result in only short-term fixes rather than lasting improvement.”
When Is a PIP Appropriate?
PIPs are generally used when an employee shows promise but isn’t quite meeting performance standards. If a manager believes that an employee’s issues can be solved with an extra bit of training, motivation or attention to detail, then a PIP might provide the support and structure they need to get up to speed.
A manager shouldn’t rush into a PIPs the first time an employee doesn’t hit their sales quota or misses a project deadline. But if performance issues persist over two or three quarters and regular coaching and feedback has not borne results, then a PIP might be an appropriate solution. It’s best not to let poor performance drag on much longer than that, though, or lax expectations will soon become the status quo.
One more note: PIPs are typically used for performance issues, not disciplinary issues. A PIP is not necessary, for example, if an employee engages in unethical conduct, like falsifying financial records, or if they create a hostile work environment through harassment, intimidation or abuse. In these situations, a company should conduct an internal investigation and decide on a disciplinary action, like termination or a formal warning.
Advantages of a Performance Improvement Plan
Sets Clear Expectations
PIPs remove ambiguity about an employee’s shortcomings, challenging managers to focus their vague generalizations into specific bullet points about past performance and possible solutions. And instead of merely telling an employee to do better, a PIP provides employees with a clear-cut roadmap of action items for improvement. The conversations that come out of a PIP can oftentimes be illuminating, revealing misunderstandings or identifying problematic workflows.
“What looks like ‘poor performance’ is often just a case of misalignment,” Truszkowski said. “When you take the time to slow down and define expectations clearly, it opens the door for real improvement — and real conversations.”
Supports Professional Growth
When a manager puts an employee on a PIP, they should devote time and attention to understanding where the employee is faltering and how to address any skill gaps. This can pave the way for interventions that may not have occurred otherwise. With the proper training, guidance and resources, a PIP can help a struggling employee not only grow into their role but advance as a professional. This development can be satisfying for employees and managers alike.
“A well-executed PIP also reflects a mutual interest — both the company and the employee want to see progress — and gives the employee more focused time, guidance and attention from their manager to support that journey,” Nirit Peled-Muntz, chief people officer at HiBob, told Built In.
Can Reduce Turnover
When organizations are able to convert underperforming employees into productive team members, they are able to retain those who may have quit or been terminated. By improving employee performance and reducing turnover, organizations can not only avoid a costly hiring process but also improve team morale and employee engagement.
“When managers actively partner with the employee through the process, it can actually build trust, strengthen communication and even improve retention,” Frahn said. “It’s not about checking a box for HR, but rather an opportunity for creating a path for someone struggling now to turn things around and be successful in their role.”
Disadvantages of a Performance Improvement Plan
Employees Might Disengage
If employees sense the PIP is a formality that will inevitably end in their termination, they may disengage from the process and start looking for a new job. In fact, some career coaches tell clients they would be better off job hunting than trying to win over a company that’s already decided to get rid of them. That’s why it’s important for managers to be supportive and to craft PIPs with reasonable action items and timelines.
“Many employees view PIPs as a sign that termination is inevitable, leading to fear, disengagement and decreased morale,” Peled-Muntz said. “In some cases, PIPs are perceived as a form of ‘quiet firing,’ where the company is simply documenting grounds for dismissal rather than genuinely supporting improvement.”
Might Not Solve the Root Issue
Some employees complete a PIP and go on to be a star, but others might fall back on old habits once the plan ends. PIPs may produce short-term results, but that uptick doesn’t guarantee long-term improvement.
“If an employee shows only short-term improvement after a PIP, it’s important for employers to take a step back and look at the bigger picture,” Reitz said. “Consider why the progress didn’t stick — was it a lack of motivation, a poor fit for the role, unclear expectations or something else within the work environment? Have an open, honest conversation with the employee to understand their perspective and any ongoing challenges.”
Requires Time and Effort
A PIP might not be an appropriate strategy for dealing with an employee with deep-seated behavioral issues or a lack of basic competencies. If it feels like a PIP is just delaying an inevitable termination, it doesn’t make sense for a manager to go through the time and effort of developing an individualized assessment, providing extra resources and holding additional meetings with the employee. In some situations, though, this may force a manager to take a closer look at their employees’ workload and better understand their challenges.
“If you’re not willing to actually coach, follow up and support someone through it, don’t bother,” Truszkowski said. “Be clear, be kind and don’t assume you know the whole story.”
Performance Improvement Plan Template
[Employee’s name]
[Employee job title]
[Today’s date]
Dear [Employee’s name],
We at [Company name] are committed to your success in this role and in this company. Your performance does not currently meet our expectations. The purpose of this performance improvement plan (PIP) is to specify our concerns with your performance, clarify our performance expectations and give you the opportunity to improve your performance.
Areas for Improvement
Issue #1: [Name an expectation the employee has failed to meet]
[Describe how the employee has failed to meet this expectation.]
Issue #2: [Name an expectation the employee has failed to meet]
[Describe how the employee has failed to meet this expectation.]
Issue #3: [Name an expectation the employee has failed to meet]
[Describe how the employee has failed to meet this expectation.]
Recommended Actions
[Suggest strategies the employee can implement to reach expectations.]
[List what outcomes the employee is expected to achieve, referencing specific KPIs where possible.]
Resources
[List any resources available to the employee, such as manager check-ins, mentorship programs or training programs.]
Progress Checkpoints
You will meet with your supervisor on [list three dates between now and the end of the PIP period] to discuss your progress on the PIP.
Timeline for Improvement
Effective immediately, you are placed on a [30, 60 or 90]-day PIP. During this time, you will be expected to make significant progress on the plan outlined above. Failure to meet these expectations may result in disciplinary action, up to and including termination.
This PIP does not change the at-will employment relationship. If you do not make significant progress toward your goals, you may be terminated prior to the end of the PIP. If you do not continue to meet expectations after completing the PIP, you may face disciplinary actions up to and including termination.
Please keep the content of this PIP confidential. If you have any questions about this plan, please raise them with your supervisor. Please sign below to acknowledge that you have reviewed and discussed this PIP with your supervisor.
[Employee signature]
[Date]
[Supervisor signature]
[Date]
Frequently Asked Questions
Does a performance improvement plan lead to termination?
If an employee does not meet the objectives outlined in the PIP, they may either be terminated or reassigned to a different position within the organization.
When to put an employee on a performance improvement plan?
Managers might consider putting an employee on a PIP if they consistently fail to meet expectations. A PIP should not be the first line of defense in a manager’s playbook, however. They should have regular discussions with the employee that include feedback and suggestions for improvement. If those measures have not been effective, a PIP may provide the clarity and structure they need to improve their performance.
How long does a performance improvement plan last?
PIPs typically last 30, 60 or 90 days. Managers or HR representatives should also schedule check-in meetings throughout the PIP process to monitor the employee’s progress and provide feedback.
