A Performance Improvement Plan, commonly known as a PIP, is a formal document outlining specific performance deficiencies, concrete improvement goals, resources and support to be provided, and a clear timeline for achieving the required improvements. PIPs are used when informal coaching and feedback have not resolved ongoing performance issues.
While PIPs can be valuable tools for turning around struggling employees, they have a complicated reputation. Many employees view being placed on a PIP as a precursor to termination rather than a genuine opportunity for improvement. Understanding when and how to use PIPs effectively is critical for both legal protection and employee development.
When to Use a Performance Improvement Plan
Not every performance issue warrants a PIP. For most first-time or minor problems, a conversation and verbal coaching are sufficient. PIPs should be reserved for situations where previous informal feedback has not resolved the issue, where performance deficiencies are serious enough to impact business operations, or where the gap between current and expected performance is significant but potentially correctable.
According to Sage research, 74% of performance management systems are successful when managers provide effective coaching and feedback. This suggests that PIPs work best as part of a broader performance management system, not as a standalone intervention.
For shift-based businesses, PIPs are most commonly used for persistent attendance problems, consistent failure to meet productivity standards, repeated policy violations, or ongoing customer service issues. The key word is "persistent" - a PIP shouldn't be the first response to a problem, but rather a formal escalation after informal approaches haven't worked.
The Reality of PIP Success Rates
Here's the uncomfortable truth: many PIPs don't result in the employee successfully improving and remaining with the company. While formal statistics on PIP success rates are hard to come by, employment law discussions and workplace forums suggest success rates often fall well below 50%.
However, this doesn't mean PIPs are failures. According to Umbrex research on HR KPIs, high PIP success rates indicate that plans are well-designed and properly supported, while low success rates may suggest issues with the design, implementation, or support of the plans.
The perception problem is real. Many employees believe that being placed on a PIP essentially means their employer has decided to push them out. This creates a self-fulfilling prophecy where the employee disengages rather than fighting to improve, especially if they feel the expectations are unrealistic or the process is unfair.
Creating an Effective PIP
A well-designed PIP contains several critical elements. First, it must clearly identify the specific performance problems. Vague statements like "needs to improve attitude" won't help anyone. Instead, cite specific examples with dates: "Arrived 15-20 minutes late on 1/5, 1/9, 1/12, and 1/18" or "Customer complaint filed on 2/3 regarding rude service."
Second, the PIP must establish measurable goals using the SMART framework - Specific, Measurable, Achievable, Relevant, and Time-bound. "Improve punctuality" is too vague. "Arrive by scheduled start time, with no more than one late arrival per month for the next 90 days" is clear and measurable.
Third, outline the support and resources the employee will receive. This might include additional training, shadowing a high-performing colleague, more frequent check-ins with their manager, or access to specific tools or resources. Indeed research emphasizes that PIPs demonstrate your interest in the employee's success and faith in their ability to improve.
Finally, specify the timeline for improvement and the consequences of not meeting goals. Most PIPs run for 30, 60, or 90 days, with check-in points along the way. Be clear about what happens if the employee doesn't meet the goals - typically continued employment issues or termination.
The Documentation Imperative
For at-will employers, PIPs serve a dual purpose. While ideally they help employees improve, they also create crucial documentation for potential termination. If the employee doesn't improve and you eventually terminate them, the PIP demonstrates that you gave them clear notice of problems, specific goals for improvement, adequate support and time to improve, and fair warning about consequences.
This documentation is your best protection against wrongful termination claims. According to research on wrongful termination cases, 65% of successful claims involved proper documentation from day one. A well-executed PIP is exactly the kind of documentation that protects employers.
However, never create documentation after the fact or backdate records. This is discoverable in legal proceedings and will destroy your credibility. All PIP documentation should be created contemporaneously and shared with the employee at each step.
Regular Check-Ins During the PIP
A PIP isn't something you hand to an employee and then revisit 90 days later. Regular check-ins, typically weekly or bi-weekly, are essential. These meetings serve several purposes: they allow you to track progress objectively, provide ongoing feedback and coaching, adjust the plan if needed based on what's working, and demonstrate your investment in the employee's success.
For hourly workers with varying schedules, these check-ins might need to be brief and flexible. A 10-minute conversation at the end of a shift can be just as effective as a formal office meeting, as long as you document what was discussed and any progress noted.
Addressing Common PIP Pitfalls
Many PIPs fail because they set unrealistic expectations. If an employee has never met a particular standard, expecting them to suddenly excel within 30 days may be setting them up for failure. The goals should be challenging but achievable with genuine effort.
Another common mistake is using vague criteria. "Unless you get a lot better" is not a measurable standard. Everything in a PIP should be objective enough that both you and the employee can clearly determine whether goals have been met.
Some employers also fail to provide the promised support. If your PIP commits to weekly coaching sessions or additional training, you must follow through. An employee who fails to improve because they didn't receive the support you promised has a strong case that the process was unfair.
When the PIP Isn't Working
Sometimes, despite everyone's best efforts, an employee doesn't improve during the PIP period. When this happens, you need to follow through on the consequences outlined in the plan. Extending PIPs indefinitely or creating a second PIP for the same issues undermines the process and can create legal complications.
Document the final outcome clearly. If the employee didn't meet the goals, note specific examples of how they fell short. If they did meet some goals but not others, be specific about which ones. This documentation supports your decision whether you terminate, extend the PIP, or move the employee to a different role.
The Flip Side: Successful PIPs
When PIPs do work, they can be powerful tools. An employee who successfully completes a PIP often becomes more engaged and productive because they've been given clear expectations and the support to meet them. They may also develop more confidence knowing they can overcome challenges.
For this to happen, the PIP must be approached as a genuine development opportunity rather than a formality before termination. If you're not truly willing to keep an employee who meets the PIP goals, you're better off having a direct conversation about separation rather than going through a disingenuous PIP process.
Performance Improvement Plans are complex tools that require careful design, consistent implementation, and thorough documentation. They work best when they're part of a larger performance management system rather than a surprise intervention. While they don't always result in the employee staying with the company, a well-executed PIP provides both the employee and the employer clarity about expectations, opportunities for improvement, and clear consequences for continued performance issues. For shift-based businesses, keeping PIPs focused on measurable, job-specific behaviors and maintaining brief but regular check-ins makes the process more manageable within operational constraints.
