Strategies for Enhancing Workplace Performance: Creating a Performance Improvement Plan

performance improvement plan

Organisations spend a lot of time and effort into finding the right fit for their openings. Even after spending the energies to find the right fit, it is found that employees are not always fully committed towards work.

A Gallup research states that – “An alarming 70% of American workers are not showing up to work committed to delivering their best performance. Of the 70% of American workers who are not reaching their full potential, 52% are not engaged, and another 18% are actively disengaged.”

Researchers also state that poor performers are liabilities to a company, and cost them more than 5% of their revenues. According to further estimates, U.S companies are hit by $350 billion in costs annually because of poor performance. Damage to the company’s reputation, lost productivity, hiring replacements, training new employees all add up to these costs.


What are Performance Improvement Plans?

Underperformance at the workplace is becoming increasingly common. Performance improvement plans (PIPs) are a valuable tool for addressing and improving underperformance in the workplace. PIPs are designed to help underperforming employees improve their performance and reach the expectations of their role.

PIPs are used by various departments. For example, the sales department uses PIPs to track the performance of sales representatives and set appropriate targets. Similarly production, logistics and other departments can use PIPs to improve the performance of their employees.

PIPs help in bettering the customer service by setting targets for customer satisfaction and response time for the customer service representations.

PIPs may be used for management and IT roles too.

Advantages of Having a Performance Improvement Plan

To help employees improve their performance and succeed in their roles, managers design PIPs by understanding the root causes of poor performance and working with the employee to find solutions that will help them improve.

There are additional benefits of applying PiPs in organisations; these include:

1) Increased Productivity

PIPs can increase the organisation’s productivity by addressing underperformance and helping employees improve their job performance, It can be especially beneficial when underperformance impacts overall team or organisational performance.

2) Fairness

PIPs can ensure that employees are treated fairly and allowed to improve their performance before more severe disciplinary action is taken. It can create a more positive and inclusive work environment.

3) Better Communication

Open communication between employees and their managers is an asset to any organisation. PIPs can help here by setting clear goals and regularly checking progress. Challenges that arise in the process can be resolved with better communication.

4) Enhanced Employee Engagement

PIPs are only plans. To implement them appropriately employees need to be provided with proper support and resources. This leads to enhanced employee engagement and a stronger sense of commitment towards your organisation.

Pitfalls of Performance Improvement Plans

While at the outset, PiPs look very useful for an organisation, there are a few potential downsides to consider when implementing them.

Impact on Morale

PIPs can have a negative effect on employee morale if they are not implemented properly. Employees could be under the impression that being part of a PIP is a sign of failure or punishment. This often results in lesser motivation and engagement.

Time and Resources

Developing and implementing a PIP involves a lot of time, effort and resources. Organisations need to justify the time of managers and other staff members while implementing any PIPs.

Legal Risks

Sometimes employees can think of PIPs as disciplinary actions. This situation can create legal risks for the organisation. Organisations should consult with HR and legal counsel and ensure that PIPs are implemented fairly and legally.

Limited Effectiveness

PIPs may not be effective in all cases. If the root causes of poor performance are not addressed or if the employee does not have the necessary skills or resources to improve their performance, the PIP may not work as intended.

Damage to Relationships

PIPs can sometimes damage the relationship between the employee and their manager or the organisation, if not handled with care. This situation can be prevented if the focus is to help the employee succeed and there is clear communication throughout the process.


5 Steps for Creating a Successful Performance Improvement Plan

Employee success is the core of any performance improvement activity. Hence, the organisation should first determine whether a PIP is an appropriate solution for addressing an employee’s poor performance. If a PIP is decided as the right approach, then the next step is creating a plan and meeting with the employee to discuss it. After the plan has been shared, the employee should be given a set period, typically 30 to 120 days, to demonstrate improvement. Periodical reviews should be done throughout the process to assess the employee’s progress.

Here we outline the 5 steps required to create a performance improvement plan that works:

Step 1 – Identify the Specific Areas of Underperformance

Before developing a plan to address underperformance, you need to define the areas in which the employee is struggling clearly. This may involve reviewing their job duties and responsibilities and any relevant performance evaluations or feedback from supervisors or colleagues. Organisations can also get more valuable inputs from the employees themselves, as to the challenges they might be facing.

Step 2 – Set Clear and Measurable Goals

The next step is to set clear and measurable objectives for the employee. These objectives should be clear and actionable. They should also be in line with what the current role of the employee demands. A clear and measurable goal would be for instance, “participate in at least two communication skills training sessions per quarter and demonstrate improved communication with colleagues as measured through regular feedback sessions.”

Step 3 – Identify Resources and Support Needed

Organisations need to identify all the resources or support that will be needed to help the employee succeed. Employees could need additional training or development opportunities, extra tools or equipment, or even additional support or guidance from a mentor. Be sure to communicate the available resources and how the employee can access them.

Step 4 – Establish a Timeline and Regular Check-ins

It is vital to establish a timeline for the performance improvement plan, including specific checkpoints or milestones for progress. Only then the managers can ensure that the employee is making progress towards their goals, Managers need to have regular check-ins with the employee (such as weekly or biweekly meetings) so that they can track progress and address any challenges that may arise.

Step 5 – Review and Adjust as Needed

A PIP is designed to help the employee succeed. However, the plan itself needs to be reviewed frequently to understand it is effective. Managers need to make necessary adjustments like revising goals or timelines, providing additional resources or support, or revising the overall approach itself. Regular review and adjustment of the plan is needed to ensure that the employee has the best chance of success.



Performance improvement plans are important tools for addressing and improving poor performance. However, organisations must understand that they are difficult to implement too. For PIPs to be effective, organisations should work closely with the employees with the intent to help them succeed.

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