What Is a Performance Improvement Plan?

Key takeaways

A performance improvement plan can be an effective strategy for improving poor employee performance back to standards.

• Implementing a performance improvement plan is often a more cost-effective option than the impact of high employee turnover.

• Concerns that a performance improvement plan can address include low-quality work, missed deadlines, and poor productivity. 

• You can use measurable factors to determine whether an employee successfully completes a performance improvement plan.

Discover how a performance improvement plan can help you get more out of your workforce. If you’re interested in providing learning opportunities for your employees to improve their capabilities, Coursera for Business offers customizable training material, where your workforce can gain in-demand skills to give your business a competitive advantage in today’s evolving economy.

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What is a performance improvement plan?

A performance improvement plan (PIP) is a document you give to employees to clearly outline where their work performance falls short of expectations and what they can do to improve. A PIP may also include consequences if the employee is unable to improve their performance, such as dismissal from their position or a reduction in responsibilities.

A performance improvement plan can help you:

• Empower your team to perform better: When an issue arises, a PIP lets you clearly communicate what your employee needs to do to improve. The responsibility for fixing the problem lies with them, so they can feel empowered to make a change.

• Improve communication: Performance reviews and improvement plans give you a chance to clearly define expectations for your staff.

• Save time and money: Improving employee performance can make your team more productive, helping you earn more money and reduce labor costs by reducing turnover.

• Document employee performance: If the performance improvement plan doesn’t succeed, you’ll have documentation to back up claims, reducing the risk of litigation.

How is an employee performance improvement plan used?

You can use a performance improvement plan to help employees overcome many issues with their work performance. A PIP provides documentation of the steps your team member can take to improve the quality of their work, resources to guide them, and a time limit for when you expect to see improvement.

Performance improvement plan examples

You can use performance improvement plans to help address many different performance concerns, such as:

• Missed deadlines

• Poor customer service

• Low-quality work

• Low productivity

• Unprofessional behavior

• Absenteeism

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How to write a performance improvement plan

To get the most out of a PIP, include the areas of performance that need improvement, the goal of the improvement plan, action steps for the employee, supporting resources, and metrics to measure progress.

• Goals and objectives: One of the advantages of writing a performance improvement plan for your employees is to provide them with clarity. Goals and objectives allow you to clearly outline what expectations you have from your team member, as well as how their role relates to the area you’re asking for improvement in. For example, if you want to address an employee’s tardiness, you would include expectations that they be on time.

• Performance concerns: Next, outline where your employee is underperforming. It’s helpful to use facts rather than opinions to demonstrate the performance concern. It’s important to remember that the purpose of a PIP is to retain the employee and move past the problem. You should be clear about the issue while expressing support and encouragement to your employees.

• Action steps: Action steps give your employee a step-by-step guide to improve their performance and meet the expectations you already outlined. Include regular check-ins with leadership to ensure the employee is on track with the PIP. An action plan can include additional training in areas where the employee needs improvement, as well as other essential resources.

• Metrics: Include metrics in a performance improvement plan, such as measurable factors that will signal success and the time to complete the PIP. For example, if you address an employee with low sales volume, you could set a specific result for them to hit. If working with an often-tardy employee, they could have a goal of zero late days. The length of time you include will typically range between 30, 60, or 90 days. These metrics provide a clear, measurable expectation.

Read more: Beginner’s Guide to Conducting a Training Needs Assessment

Overcoming the challenges of a PIP

When executed effectively, performance improvement plans help guide employees back on track by providing guidance and resources to overcome challenges. To keep your PIPs productive, incorporate these tips for maximum effect:

• Collaborate: Wherever possible, invite your employees to be part of developing the performance improvement plan to help get their buy-in and craft an action plan according to their needs.

• Be as clear and direct as possible: Make sure you give your employees the facts they need to be successful. The more clearly you can define your expectations for your employees, the easier it will be for them to make the improvements you request. 

• Have compassion: Speak positively and point out where they are succeeding to demonstrate that you want to help them improve.

• Set attainable goals: A performance improvement plan works best when it focuses on goals your employee can reasonably achieve in the designated time frame.

Use Coursera as part of your performance improvement plan

With Coursera for Business, your employees will gain access to content from 350+ leading universities and industry partners, enabling them to gain real-world experience while developing in-demand skills to improve their performance. Available in a variety of formats, such as Guided Projects and Professional Certificates, you can find training material suited to your employees' needs.

• Discover the critical skills people need in today’s jobs with our Global Skills Report.

• See Coursera in action with our demo video.

• Hear success stories from other business leaders using Coursera to elevate employee performance.

Train teams across your organization in the skills that matter most in today’s digital economy with Coursera.