How to Make Better Performance Improvement Plans
When implemented correctly, better Performance Improvement Plans (also called PIPs) can be essential tools for enhancing employee performance, supporting a high performance culture, and achieving organizational goals. When implemented incorrectly, Performance Improvement Plans can cause employee disengagement, insecurity, and stress. Our organizational culture assessment research found that the success of a Performance Improvement Plan largely depends on its design and execution.
That is easier said than done. Gartner reported that only 29% of HR leaders are confident that their organization’s current performance processes are effective at helping employees achieve and sustain the best possible performance. Gallup found that only 20% of employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.
What is a Performance Improvement Plan?
A Performance Improvement Plan is a tool that can help to set clear expectations, provide performance feedback, and monitor progress in order to help to improve an employee’s performance so they can successfully complete their job duties. A Performance Improvement Plan is a formal document that is part of a larger performance management process to help employees who are not meeting behavior- and/or result-oriented performance expectations. Performance Improvement Plans typically:
- Highlight specific performance deficiencies and areas of concern
- Set clear expectations for desired performance improvement within a certain period of time (typically 30-, 60-, and 90-day deadlines)
- Outline individual development plans and support resources to close skill, knowledge, productivity, and attitude gaps (e.g., training, coaching, and stretch assignments)
- Communicate the consequences for failing to improve (e.g., termination, demotion, or other disciplinary actions).
The Top Three Advantages of Better Performance Improvement Plans
When designed and implemented correctly, Better Performance Improvement Plans provide:
- Better Clarity
Our organizational alignment research found that goal clarity accounts for 31% of the difference between high and low performers. It is difficult for employees to adjust course if they do not know where they are headed. Employees can only meet and exceed expectations if they know exactly how their goals and accountabilities are measured.
Do your managers know how to set clear goals and success metrics with their teams?
- Better Accountability
Not moving quickly enough on underperformers is one of the top five warning signs of a low performance work culture. Teams are only as strong as their weakest link. A lack of performance accountability undermines respect, decreases employee engagement, and sabotages business performance.
Are your managers creating a culture of accountability?
- Better Risk Mitigation
While Better Performance Improvement Plans are different than formal disciplinary actions, documenting underperformance and giving the employee a chance to respond can be a powerful deterrent and corrective measure that protects the company’s interests and reputation. Just remember that Better Performance Improvement Plans should be communicated in a supportive and respectful way to provide the best chances for a positive change and a renewed employee commitment.
Is your performance improvement process designed to be a constructive and collaborative process that helps employees to overcome their challenges and achieve their full potential?
The Top Three Disadvantages of Ineffective Performance Improvement Plans
When designed or implemented incorrectly, Performance Improvement Plans can:
- Disengage Employees
If employees feel that the plans are unfair, inaccurate, biased, or unattainable, they will eventually disengage. When employees feel mistreated or resentful, they will not perform at their peak. Employees report feeling increased levels of fear, insecurity, and frustration when the performance management process is not in their best interests.
- Reduce Performance
Ineffective performance improvement processes can create untenable levels of performance pressure that can cause employee improvement plans to backfire and decrease performance. When employees feel that performance expectations are unclear, poorly measured, or just not worth achieving, they do not perform at their peak.
- Create a Culture of Fear
Ineffective Performance Improvement Plans can create a culture of workplace politics, fear, and apprehension that decreases employee engagement, feedback, innovation, collaboration, motivation, and growth. High performing leaders know that fear-based motivation is the least-effective way to increase the discretionary effort of their employees. When employees are frightened, they do perform at their peak over the long term.
The Key Attributes of Better Performance Improvement Plans
We know from people manager assessment data that done right, better Performance Improvement Plans:
- Ensure Clarity INSTEAD OF Ambiguity
Clarity sets the foundation for high performance. Performance ambiguity allows underperformers to hide, leads to misunderstandings, and frustrates team members doing more than their perceived fair share. Set SMART objectives, ensure a clear line of sight to strategic priorities, and track progress accurately.
Are performance expectations clear enough?
- Focus on Improvement INSTEAD OF Punishment
Positive change and a renewed employee commitment require a shared understanding of deficiency areas and an implementable plan to close skill, attitude, and knowledge gaps within a specific time period. That means you must be able to assess skill gaps, provide the training, coaching, and support to close the gaps, and remove any environmental barriers that are impeding progress. Emphasizing growth and improvement encourages employees to embrace the process as an opportunity to enhance their skills and career prospects rather than a step towards termination.
Is your performance improvement process set up to help your employees to grow and thrive?
- Be Proactive INSTEAD OF Reactive
Better Performance Improvement Plans take proactive and prompt action when an employee is underperforming. The earlier you intervene, the better your chances of correcting behavior before it becomes a habit. Anything to redirect an underperforming employee before demoting or terminating them should be seen as a positive step toward building a healthy organizational culture.
Do you intervene to help fast enough?
- Make It Collaborative INSTEAD OF Mandated
Involving employees in the creation of their plans for improvement fosters ownership and commitment. Discussing the plan with the employee and soliciting their input can provide valuable insights into the challenges they face and the support they need. This collaborative approach not only makes the plan more relevant and realistic but also enhances the employee’s motivation to succeed.
Is your performance improvement process framed as a realistic partnership or a top-down mandate?
- Measure and Celebrate Success INSTEAD OF Failure
Measuring success is vital to understanding the effectiveness of a Performance Improvement Plan. Clearly defined metrics and regular assessments provide tangible evidence of progress. Celebrating milestones and achievements, no matter how small, can motivate employees and reinforce positive behavior.
Are you celebrating progress?
- Follow Through INSTEAD OF Waffling
Weak approaches to performance improvement become permission for underperformance and a sign that valuing employees as the company’s most important resource is just hyperbole. Provide employees with elevated levels of support and accountability for improvement. Reward those who succeed and take corrective actions for those who do not.
Does the way you manage Performance Improvement Plan successes and failures align with your talent management strategy and workplace culture?
The Bottom Line
Hopefully your managers are consistently having frequent, development-focused conversations with their direct reports. Holding regular check-ins with employees improves clarity and engagement. Prioritizing support and improvement over punishment promotes teamwork. For better Performance Improvement Plans, focus on having honest, clear, and growth-oriented conversations with your employees.
To learn more about managing employee performance, download The Science Behind Performance Expectations for Leaders to Know
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