A Performance Improvement Plan (PIP) is a formal, structured process used to help employees whose performance or behavior falls below organizational expectations. PIPs outline specific areas for improvement, measurable goals, clear timelines, and the support resources available to help the employee meet the required standards. 

While often used for individuals, improvement plans can also be implemented at a team, department, or organizational level, in which case they may be referred to as organizational performance improvement initiatives.

What is the purpose of a PIP?

The primary purpose of a PIP is to provide a fair and transparent opportunity for employees to improve their performance or behavior before more serious consequences, such as demotion or termination, are considered. PIPs aim to:

• Clarify expectations and performance standards
• Provide targeted feedback on specific deficiencies
• Offer structured support, training, and resources
• Set measurable, time-bound objectives for improvement
• Retain valued employees by addressing issues early and constructively

When should a PIP be used?

A PIP is most effective in situations such as:

• An employee generally meets expectations but has a few targeted areas for improvement
• A previously high-performing employee is experiencing a temporary performance dip
• A new hire requires additional time to acquire the necessary skills during the probationary period
• An employee facing personal challenges needs structured support to recover performance levels

PIPs should be avoided when:

• The employee’s performance issues stem from a mismatch between their skills and the role
• The employee is already at risk of termination or has indicated intent to leave
• There is a history of consistent poor performance with no motivation to improve
• The issue involves severe misconduct, such as theft, violence, or gross insubordination

What types of issues can a PIP address?

Common performance issues addressed through PIPs include:

• Missed deadlines or unmet targets
• Substandard work quality
• Failure to adhere to policies and procedures
• Poor teamwork or disruptive behavior

How is performance improvement measured?

Progress during a PIP can be tracked through:

• Timesheets and productivity metrics
• Peer and manager feedback
• Quality control reviews
• Interim and final performance evaluations

Quantitative goals (e.g., sales targets) are straightforward to measure, whereas qualitative issues (e.g., leadership skills, interpersonal behavior) require careful observation, feedback, and documentation.

What should a PIP include?

An effective PIP generally contains:

• Clear expectations: Specific performance or behavior standards to be met, referencing employee handbooks where relevant
• Areas for improvement: Detailed descriptions of performance gaps
• Action plan: Strategies, resources, and training opportunities available to support improvement
• Timelines: A defined duration (commonly 30–90 days) with scheduled check-ins
• Consequences: Clear outcomes for both successful and unsuccessful completion of the plan

Performance Improvement Plan Process

1. Identify and define the performance issue with supporting evidence
2. Develop realistic, achievable, and measurable goals
3. Meet with the employee to explain the purpose, process, and expectations of the PIP
4. Provide ongoing training, coaching, and feedback throughout the plan period
5. Conduct regular progress reviews and document outcomes
6. At the end of the plan, determine whether the employee has met expectations, needs further support, or faces other employment actions

What is the typical timeframe for a PIP?

Most PIPs run for 30 to 90 days, allowing enough time for meaningful improvement without losing urgency. The duration should balance business needs with fairness to the employee.

Extending beyond 90 days is uncommon but may be appropriate for complex skills or long project cycles.

Legal and compliance considerations

Employers must ensure that PIPs comply with applicable labor laws and do not discriminate against any protected group. PIPs should be based on documented performance issues and supported by evidence to protect against potential legal claims.