Performance Improvement Plan (PIP) is a tool used to give an employee with performance deficiencies the opportunity to succeed. The plan identifies the employee’s performance issue(s), sets performance goals, and outlines a plan for reaching those goals.
About a Performance Improvement Plan (PIP)
A performance improvement plan is made for an employee who is not meeting performance expectations. It is a formal document identifying an employee’s performance issues along with goals and steps needed to address those concerns. It can be used to address an employee’s inability to meet specific job goals or to improve behavior-related problems.
What a PIP Does:
- Identifies the issues or behaviors that are causing problems
- Sets clear and measurable goals
- Involves the employee in the solution
- Outlines corrective actions to take to improve
- Establishes a timeline for improvement
- Identifies resources available for support
- Monitors and evaluates performance
Benefits of a Performance Improvement Plan
A performance improvement plan shows the employee that the organization understands their current challenges and that they are committed to helping that individual improve their performance.
It is better for an organization to invest time and resources into helping an employee improve their performance than it is to terminate them. The costs and time associated with PIPs are minimal compared to what it would cost to recruit and train a replacement for that employee.
There are several benefits to a PIP including:
- It creates awareness of the situation by letting the employee know there is a problem
- It shows employees that the organization sees potential in them and are committed to their improvement
- It clarifies expectations by letting the employee know exactly what they need to do to succeed
- It helps retain good employees who may struggle with certain elements of the job
- It helps identify individuals who do are not willing to put the effort in
- It increases worker productivity
- It creates a better trained and more talented workforce for the organization
Difference between a PIP and a PDP
A Performance Improvement Plan (PIP) and a Personal Development Plan (PDP) are often thought to be the same, however, they are very different. Although both focus on performance improvement, the purpose for each is very different.
A PIP is used to resolve workplace productivity issues for employees who are not meeting expectations.
A PDP is a tool to help employees who are meeting or exceeding expectations to grow their talents and abilities even more.
Essentially, a PIP gets a poorly performing employee to the minimal required performance levels, while a PDP outlines opportunities so good employees get better.