Performance Improvement Plan: HR Guide

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When an employee is underperforming at work, it can be a tricky and sensitive situation for managers to deal with. Mishandling the issue can exacerbate the problems and can potentially lead to unfair dismissal claims if the result is a capability dismissal.

Putting in place a performance improvement plan (PIP) is generally recommended to help support an employee if they are struggling to perform, providing the manager and the employee with an agreed framework to deal with the issues.

The following practical PIP guide for employers, line managers and team leaders looks at what PIPs are and when they can be used, including the benefits of performance improvement plans. We also look at what a good performance improvement plan should contain, together with some best practice tips on getting the most out of PIPs.

 

What is a performance improvement plan?

A performance improvement plan (PIP) is a formal document outlining any existing performance issues in relation to an employee, including the possible reasons for them underperforming and outlining ways in which to tackle their productivity issues.

The PIP will set out the performance, successes and challenges to date, together with the goals that the employee should be aiming for, typically within a prescribed timeframe. PIPs are often put in place following a performance review or a one-to-one appraisal between an employee and their line manager or team leader in circumstances where the employee is experiencing difficulties in doing their job role or meeting specific targets.

The main function of a PIP is to provide a structured approach to improvement for those employees who are not working to their full potential. However, there is often a common misconception among employees that a performance improvement plan is just one step away from dismissal. Admittedly, a wholesale failure to comply with a PIP could result in termination of employment, but the purpose of a plan is not to lever employees out of the door, but rather to support an individual who is struggling. Employees are one of the employer’s most valuable assets, in whom recruitment and onboarding costs have already been invested, so it is usually in everyone’s best interests to help each employee succeed.

 

When can performance improvement plans be used?

A performance improvement plan is not designed as a punishment, and should strike a balance between supporting an employee and encouraging improvement to achieve the required standard without placing them under undue or excessive pressure.

Identifying the reasons(s) for an employee not performing well at work is essential to deciding how best to address any underperformance issues and whether a PIP is even appropriate. In particular, consideration should be given as to whether there are any extrinsic factors that may be impacting the employee’s performance outside of their control, such as a lack of resources, impossible standards imposed by their supervisor or even work-related stress caused by bullying or harassment. In these cases, the root cause should be dealt with, for example, as either a management or disciplinary issue in relation to other members of staff, rather than as an issue relating to the employee’s own behaviours.

Equally, if the issue does lie directly with the employee, this does not necessarily mean that they are lacking effort or being lazy. On the contrary, any underperformance could be because the employee’s induction or training was insufficient or where there have been changes in the way in which the business works that the employee is still getting to grips with. It could also be because of poor physical health and mental wellbeing, a lack of confidence following a period of maternity or sick leave, or even personal problems at home. In many of these cases, an informal chat is all it will take to encourage an employee who is struggling to succeed, where an employee should usually be given the chance to address any problems before a performance improvement process is initiated.

As such, a performance improvement plan should only really be suggested if an employee is continuing to underperform following an informal approach. For example, if an employee has a time management issue, to justify placing them on a PIP, any discrepancy should be recurrent, ongoing and impacting their job role or output after this has already been pointed out as a problem. Equally, however, a performance improvement plan could be appropriate from the outset if the employee is unreasonably refusing to recognise any underperformance issues or their level of underperformance is especially concerning.

 

What are the benefits of performance improvement plans?

There are many reasons for when a performance management plan may be an appropriate course of action, but the common thread, from a management perspective, is that the employer would like to see a change in the employee’s performance. This is because, when an employee underperforms, this can not only impact them, but also other members of staff, especially in the context of teamwork or where others are forced to pick up the slack.

An effective performance improvement plan should help an employee who is struggling to perform well at work to make the necessary improvements, providing a structured way as to what steps need to be taken to achieve the performance levels needed. By providing the employee with goals to work towards, provided the goals and timescales to achieve these goals are realistic, this will help to motivate the employee to show signs of improvement.

Equally, by setting the proposed plan out in writing, this should not only provide the employee with an easy-to-follow guide towards the expected standards, but the person responsible for managing their performance with a reference point against which to measure any progress. In this way, the employee’s line manager or team leader should also find it easier to deal with the consequences of not meeting those specified standards.

In most cases, it should be anticipated that the performance improvement plan will be effective in bringing about change in the employee’s performance, where no further action will be needed. However, in those cases where further improvement is still deemed necessary, the plan can be amended and adapted to bring about further change. The end goal should be improvement and not dismissal although, ultimately, the PIP may need to provide a basis on which to initiate capability proceedings with a view to termination.

 

How do you write a good performance improvement plan?

There is not a strict format for performance improvement plans, where much may depend on the nature of the workplace and the culture adopted by that organisation. However, most employers will want to have some form of template in place for line managers and team leaders to use, in this way providing a consistent approach across all members of staff.

However, the best approach when it comes to writing a good performance improvement plan is to treat this is a collaborative effort between the employer and employee, working together to identify the potential issues involved and what steps can be taken to resolve these, specifically tailored to the person in question. It goes without saying that the needs of every employee will be unique, where what might help in one situation may not necessarily work for someone else. Similarly, the root cause of any problems may all be different, from personal problems at home causing punctuality issues or tiredness at work to problems in the workplace itself, such as a lack of training or organisational changes.

Importantly, the performance improvement plan must be realistic, with achievable goals within a sensible timeframe. It can often be a good idea to set up smaller goals in between the overall end goal, providing more structure to the milestones that the employee is set. Those goals should also be kept relevant, focusing on specific issues so that the employee is clear as to what they need to work on to be able to demonstrate improvement. By using examples to demonstrate what will be expected of the employee, and what behaviours should be a thing of the past, this can make progress easier for the employee to tackle.

The criteria for the ‘success’ of any performance improvement plan can be anything from completing additional training to meeting deadlines on time, depending on the situation and goals that are discussed with the employee. However, progress should not be left solely to the employee. They are, after all, already struggling. It is always far better to set out not only the steps that the employee is expected to take, but the assistance and support that they will be given by the employer in achieving this. This could include online resources or mentoring, as well as regular check-ins with the employee’s line manager or team leader.

Below we set out the key features of a sample performance improvement plan that could be used by employers as a template to be tailored to the employee’s specific needs:

  • Identify the performance issues
  • Explain the possible cause(s) of these issues
  • Describe the areas that need improvement and the expected standard
  • Set out the timescales for meeting this standard, including any incremental goals
  • Set out what resources or support the employee will receive in meeting their goal(s)
  • Set out the next check-in date with the employee’s line manager or team leader.

 

What best practice advice around PIPs should be followed?

There are various ways in which employers, line managers and team leaders can help to ensure that any performance improvement plan has its desired effect. Ultimately, the purpose of a PIP is to support the employee and, while dismissal could still result if the employee does not show signs of improvement, this should be an option of last resort.

Best practice tips around PIPs include:

  • Taking the time to identify the root cause of any performance issues, where employees may be reluctant to open up and be honest about why they are struggling, especially if this is as a result of any personal problems that they may be dealing with at home. The tone of any conversation should be supportive and sympathetic, rather than accusatory.
  • Asking the employee for their own input as to how they think they are doing, where they see room for improvement and how these issues could be approached moving forward. By guiding the conversation about their behaviours, a performance plan can very often be presented to them as the natural solution, turning a potential capability or disciplinary matter into a self-improvement project. This will also help the employee to treat a PIP as a tool for personal growth, rather than a punitive measure imposed by their manager.
  • Emphasising the purpose of the plan, ie; to help support the employee rather than penalise them. By approaching a PIP as an opportunity to help the employee progress their career, and not as a punishment that could end it, this will show the employee how much they are valued and hopefully motivate them to do well. If the plan is implemented as part of any formal capability procedure or disciplinary process, it is important to make clear the potential sanctions if the employee fails to improve, although by maintaining a positive attitude throughout the process, this should help the employee to succeed.
  • Making sure the goals and objectives within the PIP are achievable, setting realistic timeframes to meet these goals, otherwise this will set the employee up to fail. By approaching the conversation as a two-way discussion, asking the employee for ideas on how to improve, they will often be able to identify personal objectives which they feel confident they can meet and are willing to try. A number of smaller goals can provide a good away of giving the employee the confidence to make the necessary changes, where incremental targets will help to slowly build up an employee’s performance in time.
  • Regularly checking up on the employee’s progress to ensure that they are on target and providing positive feedback where the employee is showing signs of improvement. In this way, by recognising and rewarding the employee for their efforts, this should encourage further progress. Equally, if they are still struggling, it is important to provide constructive criticism and discussion around what else could be done to help support them.
  • Providing clarity each time a check is made on the employee’s progress, not only on the overall end goal, but the next target and timeframe. By failing to make it clear what is expected of the employee after each discussion, this is likely to cause the employee stress and impede their progress. There should always be a clearly defined start and finish date, otherwise the employee is being placed in professional purgatory, unsure of their future.

 

On one final note, once the performance improvement plan has come to end, and the desired progress has been made, the employee should be encouraged to look ahead. By providing reassurance that the matter is now concluded, they can get on with their work and what will hopefully be a new chapter for them in the business as a valued employee.

 

Performance Improvement Plan FAQs

What should a performance improvement plan include?

A sample performance improvement plan should include the ways in which an employee is expected to improve at work, although these goals must be achievable, together with realistic timescales for improvement.

How serious is PIP?

A performance improvement plan (PIP) is not always serious, although a plan will only usually be put in place if an employee is struggling to perform at work. If the PIP is not followed, this could potentially lead to dismissal.

Is a performance improvement plan a warning?

A performance improvement plan (PIP) is not necessarily a warning, but often a proactive way of supporting an employee who is struggling at work. However, a capability warning may be issued alongside a PIP if the plan is not followed.

How long should a PIP last?

The length of time that a performance improvement plan (PIP) is in place can vary, depending on how quickly the employer expects to see an improvement in the employee’s output and productivity, although the timescales must be fair and realistic.

Last updated: 23 April 2023

Author

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility.

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners, we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

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