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How to Craft an Effective Performance Improvement Plan

Discussing an employee’s work performance is a balancing act. If you’re too harsh, they may think you’re unhappy with them as an employee and are on the road to firing them. But if you don’t set clear expectations, they may not deliver the results you need.

A performance improvement plan can be an effective way to set performance goals for an underperforming employee. Not only is it a clear and direct way to check in with an employee and address poor performance, but it shows that you still value them as an employee and want to find a way to move forward with them on the team.

Here’s what employers need to know about using an employee improvement plan as part of the performance management process.

What Is a Performance Improvement Plan?

A performance improvement plan (PIP) is an action plan or roadmap that’s used to help an underperforming employee improve their performance in the workplace. A PIP is a formal document that outlines the specific steps an employee needs to take to meet performance expectations, as well as a timeframe for doing so.

A performance improvement plan differs from a performance review in that it’s used to address specific areas of concern and offer a clear path to improved performance. In some cases, you can use a PIP in lieu of a demotion or disciplinary action.

A PIP isn’t meant to be an ultimatum, but an agreement between you and a struggling employee. The PIP process may involve additional training, regular check-ins with the employee’s manager, and mentoring to support the employee’s progress.

Benefits of an Employee Performance Improvement Plan

Developing a performance improvement plan takes time and effort, but it’s worth it in the long run if it gets to the root cause of an employee’s performance issues. Here are four reasons to develop an effective PIP process to address performance deficiencies.

Fosters positive relationships

First, a performance improvement plan opens up a dialogue with an employee and sets clear expectations for acceptable performance. An employee isn’t left wondering what they’re doing wrong or why their manager’s unhappy with them.

Creating a PIP shows that you value them as an employee, and are willing to work with them to address any workplace or personal issues they may be facing.

Improves company culture

Performance improvement plans are a key part of high-performance management. With traditional performance management, employees may have to wait around for quarterly or annual performance reviews, with very little feedback or direction in between.

High-performance management involves direct and continuous feedback, and supports a more collaborative company culture. Employees have opportunities to improve their performance on an ongoing basis, not just when it becomes an issue.

Reduces turnover

If you fired someone every time they didn’t meet your performance expectations, you’d be stuck in a neverending recruiting process. It’s often more cost-effective to develop a performance improvement strategy and a thorough employee onboarding process.

By using PIP templates as needed, you can increase employee retention and align an employee’s on-the-job performance with their actual job description.

Serves as a written record

Finally, a performance improvement plan serves as a written record of the employee’s performance issues and what steps you took to address them. If things don’t improve, and you do progress to demotion or termination, your PIP shows that you treated the employee fairly and didn’t fire them without justification.

This is especially important in cases involving employee misconduct, since you may have to follow a specific sequence of disciplinary action procedures.

What Makes an Effective Performance Improvement Plan?

Performance improvement plan: entrepreneurs discussing graphs and data

A performance improvement plan isn’t just a verbal or written warning that an employee or team member’s performance isn’t up to par. It should provide an explanation of what went wrong, as well as action steps the employee can take to improve things.

A good starting point is to develop SMART goals that are:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-bound

This means that a performance improvement plan should have measurable objectives, such as increasing an employee’s sales figures or another relevant metric. These goals should be attainable, which means they’re realistic for the employee to achieve without exceeding the parameters of their job description.

And an effective PIP plan should have a series of milestones along the way, as well as an end date at which you’ll determine if the process has been successful.

Be sure to highlight some of the ways in which you’ll help the employee achieve these goals, such as offering additional training or mentorship opportunities.

Examples of Performance Improvement Plans

The reason for creating a performance improvement plan can vary, so it’s helpful to have a performance improvement plan template that you can customize each time. Here are a few examples of performance improvement plans in action.

Frequent absenteeism

Absenteeism in the workplace is a common problem for HR professionals, and a PIP can help you address the root cause of tardiness or absenteeism. You can also offer support if you believe the employee is experiencing personal issues outside of the workplace. Here’s what that might look like on paper:


Employee’s name:

Manager’s name:

Date of PIP:


Reason for PIP: Late arrival on 80% of work days; 3 unplanned absences per month

Performance goals: On-time arrival on four out of five days per week, fewer than one unapproved absence per month

Plan for improvement: Regular check-ins with manager; our HR team is available to help if you need to request a leave of absence for personal reasons


Timeframe: One month

Outcome: Termination


Unprofessional behavior

Unprofessional behavior can range from a serious case of workplace misconduct to a minor issue like a dress code violation. Here’s how to bring a case of unprofessional behavior to an employee’s attention and offer a plan for improvement:


Employee’s name:

Manager’s name:

Date of PIP:


Reason for PIP: Complaints about angry outbursts in the workplace

Performance goals: Cease inappropriate behavior, review Code of Conduct

Plan for improvement: Our human resources team will reach out to you to review our employee handbook and offer employee counseling


Timeframe: Immediate

Outcome: Suspension or termination


Poor performance

This PIP template example is for employees who are struggling to meet performance goals on a sales team or in a customer support capacity:


Employee’s name:

Manager’s name:

Date of PIP:


Reason for PIP: Your responses to customers frequently receive negative feedback, specifically concerning typos and the accuracy of information

Plan for improvement: Achieve a 90% satisfaction score, as measured by customer feedback; improve the accuracy of your responses to customers

Available support: [Manager’s name] will provide additional training; [co-worker’s name] will review messages for accuracy


Timeframe: 3 months

Outcome: Demotion or termination


Streamline Performance Management with Pulpstream

Entrepreneur using a tablet

The performance management process includes everything from performance reviews to performance improvement plans (PIPs), which serve as formal documentation of an employee’s performance issues and offer a clear path to remedy them.

A PIP should include clear expectations, measurable goals, and a specific timeframe, and you can use PIP templates to standardize the process.

Pulpstream provides a way for HR teams to manage employee processes of all kinds, including performance improvement, disciplinary action, and employee counseling. Our no-code HR platform allows you to create digital workflows for your disciplinary and PIP processes so you can track each event, generate documents automatically, and get a 360-degree view of each case using an intuitive, cloud-based dashboard.

Request a demo today and see how Pulpstream’s tools can make a difference!