When an employee is not performing to company standards, employers need to intervene. It is a difficult, but necessary, conversation to have. When there is a continuous lack of performance, it is important for every employer to step in and attempt to resolve the issue.
One of the most common methods of addressing performance issues is implementing a performance improvement plan (“PIP”).
In this guide, we’ll explain what PIPs are, how to develop them for your business, and their importance.
What are Performance Improvement Plans?
A PIP is an action plan created by the employer and employee to address and remedy reoccurring performance issues.
A performance improvement plan is a formal written document that specifies the issues being addressed, provides a clear list of goals, and establishes timelines for the goals to be met.
Why do Some Employees Need a Performance Improvement Plan?
Some employees see performance improvement plans as a negative action for doing something wrong. Although performance improvement plans can be part of the disciplinary process, they are a tool that supports employee engagement and helps the employee to meet the business’ standards.
There are many reasons why a performance improvement plan is an appropriate course of action. However, the most common reason is for failing to meet sales targets in a sales industry. Other performance improvement plan examples include lateness, tardiness, or absenteeism.
How to put an Employee on a Performance Improvement Plan
If you are unsure if you should put an employee on a performance improvement plan, there are a few things you should consider before taking action.
First, you should review your company policy or employee handbook. Most employee handbooks will detail the procedure to take when placing an employee on a performance improvement plan.
Second, you should have documented evidence of the employee’s issues. For example, if you are contemplating placing an employee on a PIP because they are not meeting sales targets, you should have evidence to back it up. Additionally, there should be some record of the measures the employer has already taken for the employee not reaching targets (i.e. verbal or written warnings).
Once you have the evidence and the facts of the situation, you should determine whether a PIP is the correct course of action. This will include meeting with the employee and manager who asked to put their employee on a performance improvement plan.
Sometimes, situations or issues can be remedied without a PIP. Speaking to the employee can help everyone fully understanding and remedy it quickly and informally.
A PIP should be used to help an employee improve, not to be used to punish or scare an employee. Additionally, if you do not have evidence to support a PIP, an employee may commence a legal proceeding for constructive dismissal.
Do Performance Improvement Plans Work?
Unfortunately, there is no statistical data to support the successfulness of performance improvement plans in the workplace. Alternative disciplinary measures such as a PIP are collaborative efforts between the employer and the employee to resolve the performance issues.
The employer and employee can speak about the issue, and in some situations, the employer can identify potential personal issues that may be impacting the employee’s performance. If the employee’s performance issues are tied to a protected ground under human rights legislation, the employer will have a duty to accommodate them to the point of undue hardship.
What Should a Performance Improvement Plan Include?
A performance improvement plan should be a written document that includes the following:
- The employee’s name.
- The employee’s title.
- The employee’s department.
- The date the plan was issued.
- Specific performance metrics that need to be improved.
- Goals and activities needed to improve performance (with target dates included).
- Performance improvement plan timeline.
- Expected results (preferably with defined measurables).
- A schedule of progress review meetings (with fields for stating the outcomes of progress reviews).
- Final review and results.
The plan should provide clear points that the employee and their supervisor have agreed to. Lastly, both parties must sign off on the PIP to evidence their understanding and acknowledgment.
How Long Should a Performance Improvement Plan Last?
The duration of a performance improvement plan greatly depends on several factors. These include the purpose of implementing one, the employee themselves, the company, as well as the complexity of the job.
Usually, performance improvement plans range from 30 to 90 days. However, an employer and employee may agree to shorten or lengthen the time depending on the progress made during the plan.
What if the Employee Does not Perform under the Plan?
If an employee does not meet the expectations under the agreed upon performance improvement plan, then you and the employee must decide whether to continue the employment relationship. It is important to refer to the employment contract regarding the employee’s rights at termination.
Alternatives to Performance Improvement Plans
Sometimes a performance improvement plan may not be the best option. So it’s important to maintain a dialogue with your employee about your expectations. Typically, when both the employer and employee engage in the discussion, there will be a way for both parties to come to an understanding of what is expected.
Get Advice on Performance Improvement Plans with BrightHR
A performance improvement plan is a great strategy to retain an employee whose performance has been lacking recently but who does have the motivation to be a strong team player.
It furthers shows the willingness that you put into each employee to ensure their continued development growth in your company.
If you need assistance developing a policy about performance improvement plans or guidance on them, our BrightAdvice service allows you to receive quality advice on any employment issues you may have.