A performance improvement plan, or PIP, is a formal, structured and specific plan that outlines a performance problem and steps for improvement. As a company leader, you can use a PIP to develop an employee struggling in a particular area or who you want to develop for potential job promotions. Keep in mind, though, that there are pros and cons to using performance improvement plans.
Early Intervention
-
A primary purpose of a performance improvement plan is to take early action when an employee's performance is not adequate. Through early intervention, you can potentially correct the worker's behavior or task performance before it becomes overly habitual. You also ideally can correct problematic performance to propel the worker toward possible work outcomes, while potentially staving off the need for a demotion or termination. An employee with strong abilities may simply need some redirection.
Formal Process
-
Another major advantage of a PIP is that it is a formalized plan. The structure and formality gives you a better chance to concentrate on a core area of performance. Informal approaches to corrective action often become unfocused, and you may even lose sight of the employee's long-term performance goal. With a PIP, you lay out the current problems or challenges, set performance improvement goals, lay out strategies and tactics, and plan milestones and future meetings to review progress. The clear plan and schedule can help you stay on track in motivating the employee toward improvement.
Time Requirements
-
Despite the positive nature of its structure, a PIP also obligates you and the employee to commit time to the improvement process. In the beginning, you have to take time to write out the entire improvement plan. Another major time commitment is the scheduled meetings you have with the employee to review progress and to perform training activities. Just the ongoing communication required in coaching for improvement takes away from other activities and time commitments.
Negative Consequences
-
Another drawback of the formal PIP is that it includes negative consequences in the event the employee fails to make necessary improvements. For managers who believe in maintaining a positive outlook and motivating through goals and incentives, this is challenging. You essentially let the employee know that he risks a cut in hours, demotion or job loss if he doesn't meet the agreed-upon performance objectives. Despite this negative perspective, it is important to realize the PIP is often a last-ditch effort when other attempts haven't worked.
