Performance Improvement Plan (PIP) The Ultimate Guide

Today, many firms and businesses strive to establish plans for improvement through performance improvement programs with quantifiable objectives to help low-performing employees raise performance and thus achieve better results.

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Why is this important? Research shows that companies that implemented a continuous performance feedback framework were 39% better at enticing the best talents in the workforce and 44% better at retaining them (Betterworks, 2020).‍

Keep reading if you'd love to learn more about a performance improvement plan and how to implement the best template for your business or company to plan for a long-term improvement strategy.

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What is a performance improvement plan?

An employee Performance Improvement Plan (PIP) is a formal document highlighting employees' continuous performance deficiencies, including measurable steps to improve their overall performance and meet company expectations.

In simple terms, it is a way for employers or HR managers to identify underperforming employees and help them improve within a specific area. Performance improvement plans can vary from organization to organization, and you may highlight specific areas to plan for improvement based on the needs of a specific position. For example, the improvement plan might indicate what skills a group member needs to work on, what character traits they need to address, or what coaching they should receive.

The primary goal is to develop high-performing teams that are engaged and productive. This benefits both the company and its employees. It gives your employees a nudge in the right direction and helps create a pleasant work environment that boosts overall productivity and visible results.

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How to know what to improve?

If managers continuously engage with an employee or team member, they can quickly identify their strengths and weaknesses, thus, knowing where they need to work on.

For the purpose of this article, we will look at two major ways for managers to know what to improve.

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1. Determine the strengths and weaknesses of employees

Managers can improve employee performance by identifying strengths and weaknesses. You start by testing these two factors and getting all the possible insights. As a next step, you take the insights and turn them into actionable feedback. Finally, you deliver the feedback in a manner that will urge an employee to improve.

With these, you can know how employees feel and what you need to do to ensure a suitable work environment that encourages productivity and high performance.

Therefore, it is vital to have a system that can help you engage your employees and receive helpful feedback.

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2. Assessing interpersonal skills

In the last 20 years, the time that managers spend working closely with other team members has increased by 50%. This only increased the importance of advanced interpersonal skills.

Organizations value interpersonal skills highly, and for a good reason - the individual ability to work well in a group improves the business performance of the whole organization.

Managers play a significant role in developing the interpersonal skills of their employees by acting as a moderator. By helping settle disputes that arise between them, you improve the daily work of the whole team. Use your leadership skills to act as a neutral third party and help all sides see the facts from you.

In such a case, evaluate the interpersonal skills and determine potential areas within a plan for improvement. Interpersonal skills are vital for employees' and organizations’ success.

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3. Providing feedback

Finally, while you offered feedback on strengths and weaknesses, it is time to go further. Regular feedback encourages employees to meet their goals and fast-track their professional development.

To be effective, feedback has to be:

Timely - shortly after the event, that is the reason for a feedback meeting, and regularly, through monthly or quarterly feedback sessions.
Constructive - to offer positive solutions to your team
Specific - so the members of your team can identify concrete pain points upon which to improve
Detailed - to provide them with a clear understanding of the areas where they need to improve

Feedback is an important part of improving your team's performance because it helps you discover and improve the potential gaps in its performance. This is also an excellent way to increase team engagement, positively contributing to productivity.

You can also turn to online resources for more ideas. For example, use online evaluation tools such as the Clifton Strengths Assessment test. It offers 177 paired statements, and people are supposed to choose the ones that describe them the most (and rate the extent to which it does so). This helps you understand which strengths help people solve tasks effectively and how they can develop further.

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Who should contribute to your plans for improvement?

An effective development plan requires input from both the employer and the employee. By including the employee in the decision-making process, the employer gains a better understanding of how to best assist the employee in improving.

Depending on the company, two individuals are responsible for taking care of the development plan, they are:

Manager or team lead
HR team or department

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Manager

This could be the direct team lead, supervisor, or head of a unit.

Today, managerial duties go beyond administrative work and budgeting. Managers must be excellent coaches who can inspire and motivate employees to continue learning.

As coaches, they ought to learn how to conduct coaching conversations with their subordinates. The popular Gallup Coaching Conversations guide highlights a framework manager can use to achieve this. Managers can have these conversations by

Establishing expectations with their team members
Continually coaching their team by staying connected with them and checking in on them
Creating accountability systems to monitor the progress of their team

When you motivate people to be better rather than simply instructing them what to do, you are guaranteed to see better results in their performance review. You also become more mindful about how you undertake your obligations because you must be competent at fulfilling your duties before you inspire others.

Managers should ensure compliance with the performance development plan and plans for improvement. This also means including disciplinary action when an employee fails to achieve specific goals within the stipulated time frame, as stated in the development plan and job description.

It is not a one-off thing, so there is a need for both the manager and the employee to discuss performance issues continuously to ensure positive results and improvement in performance.

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HR department

The HR team can develop a template for effective coaching and provide guidance to the managers and employees where necessary. They can also support managers in implementing some of the already established coaching templates.

Thanks to their expertise, HR managers usually make great coaches to help employees and managers with career growth.

Thankfully, tools like Effy can help develop performance improvement plan templates for your employees, and you can also hold one-on-one sessions with employees with the tool.

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How should the performance improvement plan be developed?

Before developing a development plan, discuss with your employee what to include and how to go about it correctly.

The steps below highlight how to develop a performance improvement plan for your employee.

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1. Prepare conclusions about strengths and weaknesses

Both the manager and the employee need to take part in coming up with a performance development plan.

Based on the feedback from previous reviews, the manager and the employee can prepare their individual conclusion about the strengths and weaknesses of the employee to further devise plans for improvement. They can have one-on-one meetings to discuss their conclusions and review them together to know the way forward.

This way, both parties can be accountable and involved in achieving the common goal.

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2. Discuss plans

After going through their conclusions, the manager and employee can now discuss how they can both come up with the developmental plan.

This is where they both discuss the employee's career plans and how they expect to achieve them. Also, if employees think certain tools or training are necessary, this is where they let their managers know.

The manager can outline additional training and helpful resources to help employees follow the pre-made plans for improvement and boost their results. These discussions help the employee and manager synchronize and clarify their expectations to avoid confusion later. This will be the basis for the performance improvement plan and subsequent discussion with the employee.

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3. Set clear goals

The next step is to set clear goals and objectives for the performance action plan. Here, you outline what you expect from the team member and how they can achieve this.

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A team member also informs you about what they want from you in order to improve. These objectives should take the employee's strengths into account, their personal development plans, and the objectives of the company or team, in order to succeed.

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Having clear goals gives you a distinct idea of what to expect from the employee and serves as a guideline to monitor their progress, and vice versa. Your goals should be SMART—specific, measurable, achievable, realistic and time-bound.

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You can break the goals into smaller milestones to not overwhelm your employee. Also, ensure that you document everything accurately for future reference. If possible, you can use HR software that will be accessible by both you and the employee.

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4. Draw up a plan

After setting clear goals, both the manager and the employee can now draw up the performance improvement plan which will include

Strengths and weaknesses of the employee
Expectations from the employee and manager
Goals for both the employee and manager
Helpful training or resources to help achieve goals
Duration of the plan
Possible disciplinary action plan for non compliance

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5. Set up a follow-up schedule to monitor progress

Frequent check-ins and performance reviews are recommended to monitor their progress and compliance with the agreement of the action plan, as well as to better support the employee during the duration of their improvement plan.

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It also allows you to support and mentor them where necessary to achieve their objectives. With Effy, you can seamlessly check in on your employees and give them feedback in real time.

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Performance improvement plan template

With the help of HR management tools or software, anyone can quickly develop a template. They make it easy for you to implement your action plan seamlessly without wasting so much time.

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Our template as seen in the picture above is well detailed and concise. We arrived at our improvement plan structure based on the experience of thousands of our clients who have used our tool successfully to achieve results in their teams and companies. This means our tool is tested and trusted to yield positive results.

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The Effy performance improvement plan covers

Top strengths of the employee: This is where the manager outlines the top strengths of the employee based on previous reviews and discussions with the employee.
Areas to improve: Here, the manager outlines areas of performance deficiencies and what the employee can do to improve
General summary: The manager gives their general feedback here and also outlines the goals and expectations of plans for improvement based on their discussion with the employee.
Development/improvement plan: The manager outlines the main plan, including helpful resources and the plan's duration..
Action items: This outlines the actionable steps the employee and the manager will take to achieve their common goal

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The Effy software is an all-in-one customizable HRM software for IT companies that can help you to

Monitor the performance of your team
Carry out surveys and 360 reviews
Hold one-on-one meetings or team meetings
Translate data into actionable insights
Develop clear goals and development plans
Organize and manage your employee profile and data
Simply leave management

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Effy supports third-party tools like Slack, Microsoft Teams and Telegram, and it can also help you track projects, teams, and skills. With our tool, both the manager and the employee can access the tool to monitor the plan's progress. If you want to know more about Effy's works, you can log in to the web-app or request a demo.

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Conclusion: How to Write a Performance Improvement Plan

It is one thing to plan, and it is another thing to execute your plans through the appropriate channels. We have carefully explained all you need to know about a performance improvement plan and how to develop one for your business.

Having a development action plan helps you keep your employees in check. It doesn't just end at planning; you also need to leverage a tool that allows you to frequently review the plans, analyze the data, monitor your employee's progress, and improve the plan when needed.

The Effy software is a reliable tool you can use to improve your team's performance and achieve positive results. Our performance improvement template highlights the major areas of plans for improvement, and it has been used by thousands of clients to yield visible results for their businesses.

You can book a consultation with one of our product experts to get a personalized demo and learn more about how the Effy software can solve the HR needs of your company.

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FAQs: Performance Improvement Plan (PIP)

Is termination the goal of a performance improvement plan (PIP)?

The short answer to this question is no.

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Receiving a PIP from your team lead, manager or HR team doesn't necessarily mean they want to end your contract. Employers develop performance improvement plans for underperforming employees who are not meeting the organization's expectations, but this doesn’t necessarily mean they want to terminate cooperation.

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If anything, it shows that your employers care about you enough to allow you to improve your performance, rather than just firing you without prior notification. It is up to you to make the best of it and prove yourself worthy of being retained.

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What are the benefits of an employee performance improvement plan?

There are many benefits of having a performance improvement plan for your employees; some of them include:

Saves your business time, money and resources: If you already have a template and leverage the right tools, you can automate the process and save your business the time and cost of recruiting and training new staff.
Boosts productivity: It improves your employees' performance and makes them more productive because they have a clear path and measurable steps to achieve their objectives.
Promote a healthy work culture: When your employees know that you have their best interest at heart, it encourages them to do more and creates a healthy work environment for them to do their best.
Promotes personal development: One of the steps involved in drawing up a performance improvement plan includes specific training and resources that the employee can undergo for their individual and career growth. This promotes individual growth for employees and creates an avenue for managers to support employees.

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How long should a performance improvement plan (PIP) last?

The duration varies depending on the situation and how long it may take to improve the issue. Generally, they usually last between 30 to 60 days and sometimes up to 90 days.

Top strengths: Research, strong vocabulary, clarity, meeting deadlines, grammar
Areas to improve: Attention to detail, willingness to revise drafts, conciseness,
General summary: Your writing is excellent; however, there are still areas you need to improve to achieve better results for the company and our clients.
Development plan: The goal of this plan is to improve your overall output as a writer for better results
Action plan: Read through our writing guidelines carefully before submitting drafts
Ensure to watch the provided videos to help you with tips on how to write clearly and concisely for your target audience

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What are your 3 main areas for improvement?

Three most important areas for improvement include:

Teamwork
Interpersonal communication
Coaching

Investing in these three areas can strengthen your workforce and make it much more productive and efficient, which, in turn, improves your overall business performance.