Did you know that the US economy loses over $450 billion annually due to poor employee performance?
These Gallup figures show that having a talented, reliable and adaptable workforce is not a given. It’s something built with dedication, commitment and respect.
What happens if employees don’t meet performance expectations? PIPs are structured methods to resolve performance issues and hold employees accountable.
This comprehensive guide explains what PIPs are and how they can be implemented.
What is a Performance Improvement Plan (PIP)?
These are detailed roadmaps which detail the issues regarding an employee’s performances. They can include failure to meet KPIs, or failing to fulfill their responsibilities.
PIPs can be a last-resort for workers who are underperforming. Unlike employee development plans which act as a roadmap to set goals, they often serve only as sanity checks.
These documents outline areas for improvement, establish measurable goals and set time limits to make the necessary changes.
Remember that the management should only implement PIPs if an employee fails to meet their performance targets.
These roadmaps may seem like punishments but they can actually save jobs and improve communication between employees and managers.
Why could employees require a PIP plan?
It’s important to get this straight: PIPs don’t always constitute a disciplinary action. Even when an employee works hard, they could still have a poor performance. We’ll now explore the most common reason employers may issue plans.
Does not meet expectations
In most workplaces, there are clear expectations set for new employees. Failure to meet these could have an impact on organizational goals. There are many reasons for someone to fail to meet expectations.
Performance Improvement Plans can address high levels of stress, lack of training and other factors which cause employees to not meet expectations.
Skills gaps
The technology is constantly evolving, and workplaces need to adapt. Each workplace must provide training to close technology skill gaps. However, some employees may struggle more than others.
PIPs may use SMART objectives to motivate employees and encourage their learning journey. You might need to provide more intensive training, or hold regular meetings with an individual in order to meet benchmarks.
Behavioral Issues
A lack of motivation and disengagement can affect operational efficiency. PIPs are often used as disciplinary measures in many workplaces, but can also serve to motivate employees.
These plans, when introduced properly, can help employees to understand their roles as well as contribute to the company’s objectives.
Benefits of PIPs
Performance Improvement Plans have a number of benefits. They can help you to set expectations, establish accountability and increase profitability. Let’s look at them in greater detail.
Outlining Expectations
A PIP identifies where employees fall short and the steps that they can take to improve. It is common for communication breakdowns to occur between managers and employees, but setting expectations that are clear makes it easier to establish accountability.
This also ensures that the performance goals are crystal clear, and that the way forward is made very easy.
Structured Approach
These plans provide employees with a structured and clear way to identify their weaknesses and make improvements. Instead of telling employees they are underperforming, the PIPs provide a set of goals and a plan for achieving them.
Employees have the opportunity to grow in their role and prove their commitment to an organization.
Protecting your company
Performance Improvement Plans are used to track and address performance issues. These plans are a record of the actions taken to improve the situation. They can be very valuable if an employee is terminated.
A PIP, for example, can be used to prove that the employer complied with the employment laws, and took all reasonable steps to avoid dismissal.
Boosting engagement
Disengaged workers can reduce a company’s production and result in low retention levels, but PIPs may lead to higher engagement.
These plans can be used to boost employee morale and make them feel more supported.
Performance Improvement Plans Examples for Employees
Now that you’re aware of the benefits PIPs can offer, let’s look at some examples. These scenarios show how PIPs can help employees grow and the company achieve its goals.
Attendance problems
Absences are a problem that every business manager and HR department have to deal with. Some of the absences are due to genuine illness, but others can be attributed to irresponsible workers, mental health issues, burnout and general lack motivation.
Attendance management is an example of a typical performance improvement plan, because it creates issues in all industries. The plan may include attendance targets and tracking when employees call in sick or are late.
Target Setting
A tailored improvement plan will address any weaknesses if an employee is struggling to meet expectations or falling behind. These plans, for example, can help employees reach sales targets or other targets by setting benchmarks.
The manager can determine what an employee needs in order to be successful, such as more training or support. They can also track their performance against key metrics.
Tips for creating a Performance Improvement Plan
If you are new to PIPs then creating one may be intimidating. We have compiled some great tips to simplify the process, and make sure your plans are successful.
Understand what you are dealing with
You must first understand the organization’s goals. Are you primarily concerned with company culture or increasing revenue?
This allows you to compare individual performance with the bottom line of your company.
Take a look at:
- Performance metrics
- Skills gaps
- Attendance problems
- Engagement Rates
You can identify employees who need additional support by using clear benchmarks for employee performance.
Create an organized plan
Clarity is key when it comes to Performance Improvement Plans. Focus on these areas when creating a document:
- Explain the Plan: Tell the person why you are creating the plan, and what its purpose is. Mention previous meetings in which the employee’s work performance was discussed.
- Use Data to Back Up Everything: Instead of simply listing areas that need improvement, use clear examples and data whenever possible. This is not meant to catch the person, but rather to show them where they have gone wrong.
- SMART goals: Setting employee goals that are effective is difficult, but SMART goals make it easier, as they’re specific, measurable and achievable, relevant and time-bound.
- Feedback: Create dedicated check-in points, and feedback sessions for evaluating whether employee performance has improved. These sessions can also be valuable to the employee, who will have the opportunity to discuss their concerns.
- Be Clear – Establish clear expectations for employees and the consequences of not meeting their goals.
You can see that PIPs, once they are broken down into manageable steps, are fairly straightforward. You can use a performance improvement plan template to simplify the process.
Arrange for a meeting
HR should set up a formal discussion with the employee to explain why a Performance Improvement Plan is the right thing to do. The purpose of these meetings is not to single out the employee and point out their mistakes, but rather to explain why there are problems with performance.
Ask the employee if they have any questions, and listen to them. Empathy can encourage the employee to see the plan in a positive light.
Track Progress
Use tracking tools to track progress. SMART goals, for example, can track if the employee has reached the goal and provide support.
Here, positive reinforcement is essential; even minor improvements should be encouraged. You should also give constructive feedback if the person is not meeting the performance standards.
Evaluation
All Performance Improvement Plans must have a time frame, which allows you to assess the progress of an individual and determine if further action is needed. You can continue if the plan has worked and your employee reached all benchmarks.
There are several options if it doesn’t.
- Extending the duration of the plan to give more time for changes to occur.
- Further training is needed to fill in skill gaps.
- Termination of employment contract
After exhausting all other options, termination should be the last resort.
Takeaways from the conference:
- Performance Improvement Plans (PIPs) are not disciplinary procedures; they provide an opportunity for employees to learn. Always be fair and make sure the employee is aware of the purpose of the plan.
- Use a neutral tone when discussing performance and always back it up with facts. Avoid emotional language, and make sure you let them know that you are trying to help the employee achieve more.
- Ensure that the employee knows their role and that you have set clear expectations. Ask for feedback, and if necessary provide training.
- Monitor the performance of your employee by checking in regularly and conducting progress reviews. You should only terminate a contract after you have done all that you can to help the employee.
Bottom line
Performance Improvement Plans can be a great way to ensure that employees are contributing to the organization’s goals and growing professionally.
If implemented correctly, they can reduce staff turnover, improve workplace culture and increase profitability. All you have to do now is follow the advice in this guide to see your performance skyrocket.
The first time HR News published the post Building A Stronger Workforce – The Role Of Performance Improvement Plans.
