Performance Improvement Plans (PIP) can be great tools for improving employee performance. But how do you decide whether a PIP is the appropriate course of action? It's certainly not an easy decision.
Benefits of a PIP
Implementing a PIP prior to termination does the following:
- Provides clear written evidence that the termination (if necessary) is for performance and business-related issues
- Memorializes the employee's performance issues
- Establishes precise performance benchmarks
- Sets clear consequence for failing to meet the set benchmarks
- Provides the employee a chance to rehabilitate
Deciding to Use a PIP
Consider the following questions when deciding whether an employee should be placed on a PIP:
- Can the performance issue be corrected? Poor performance may be caused by lack of effort, lack of training, or lack of skill. The latter is the hardest to correct with a PIP. If the skill can be acquired by learning or training, then consider a PIP. If, however, the lack of skill is not easily corrected, then putting an employee on a PIP is setting them up for failure and probably not a good option.
- Have the performance issues been previously addressed? A PIP should never be a surprise or the first step in the corrective action process. If you have not addressed the issue in the past, it isn’t appropriate to start by telling them they need to improve (if they don’t know there’s a problem in the first place). A PIP is more appropriate after at least a verbal and perhaps a written warning.
Preparing the PIP
Include specific examples of the areas in which the employee is not meeting your standards and requires improvement. Ensure that the employee understands there must be immediate and sustained improvement in the specific areas indicated and that failure to improve is grounds for termination.
In addition, make sure that your past disciplinary action with others is consistent in order to avoid claims of discrimination or favoritism. Have the employee sign the PIP, provide a copy of the PIP, and maintain one copy in the personnel file. Establish an end-date for the PIP, for example in 30, 60, or 90 days (whatever is reasonable for the expected improvements).
At the end of the PIP, set up a meeting where the employee's performance during the PIP will be evaluated. If it is decided that the PIP was unsuccessful, be prepared to terminate the employee (final paycheck, etc.) and provide concrete examples of why the employee failed the PIP.
A Warning of Using a PIP
If you choose to put an employee on a PIP--follow through! That means you will need to keep records of performance issues during the PIP and be prepared to circle back with the employee at the end of the PIP.