Some people think it’s time we did away with performance improvement plans, but maybe they just need a rethink.

When you ask HR professionals about performance improvement plans (PIP), you’ll probably get mixed responses. Most will appreciate the value of a PIP as a tool to avoid an unfair dismissal claim, but the jury is still out regarding their effectiveness in helping poor performers to improve.

Perhaps it’s time that we gave PIPs a refresh and focussed on the ways in which they help? But first, it’s worth understanding how to use them effectively. HRM asked two HR experts to weigh in.

When performance improvement plans are useful

Performance improvement plans formalise the process of dealing with an underperforming worker, says Cecilia Jones FCPHR, HR consultant and coach. 

“[They’re often used] when managers have tried repeatedly to help an employee improve,” she says.

And while HR’s views on PIPs are a little up in the air, employees’ sentiments on them are pretty clear – if they’re put on a formal PIP, they probably feel like they’re being managed out of the business.

Perhaps that’s why PIPs sometimes fail. The employee in question might not believe their employer truly wants them to improve, so they don’t try to. It becomes a self-fulfilling prophecy. More on that in a moment.

PIPs shouldn’t be used as the first step on the road to termination, says Jones. When used correctly, they’re a powerful performance development tool.

“The aim of a PIP should be an opportunity to set an employee up for success,” she says. “They must have clear [and realistic] objectives and timeframes, and the manager should be meeting with the employee frequently to provide the right environment for the PIP to succeed.”

This could include mentorship, further training or consistent and constructive feedback.

“It very quickly became apparent to me that his underperformance was a symptom of a personal issue and a PIP wasn’t going to fix that. People don’t suddenly decide to be a poor performer. There’s always a reason.”  – Cecilia Jones FCPHR, HR consultant and coach

Importantly, an employee’s first indication that they’re underperforming shouldn’t be when they’re placed on a PIP. There should be plenty of genuine attempts to help them improve prior to this, which could be done via formalising performance goals and making expectations crystal clear, so the employee understands exactly what success looks like.

“Some organisations will have a policy that says after three or six months of trying to improve performance is when [they’ll] formalise the process with a PIP,” says Jones.

The length of a PIP will be dependent on the goals you set within the plan, she adds. It can be a good idea to have a combination of short and long-term objectives to give the employee some quick wins. 

Don’t forget to encourage regular catch ups between the employee and their manager. This helps keep employees on track. 

“Regular meetings should be part of your PIP framework. PIPs cannot succeed in isolation. They need buy-in from both parties,” says Jones.

Time for a rebrand?

If a PIP is conducted properly, it gives employees a second chance. So perhaps the real issue with them is the way in which they’re perceived.

To employees, a PIP can signal that the writing is on the wall; they’re on their way to a dismissal, says Desleigh White CPHR, HR consultant at People Matter Mediation and HR Solutions.

So maybe we need to rebrand them?

 “I prefer to use ‘development plans,” says White. “This demonstrates to the employee that you are invested in their improvement.”

Development plans can be implemented slightly earlier and should identify the root problem, says White. This could be inadequate management, a lack of appropriate training or perhaps they need some adjustments made to suit their personal situation – for example, they might be neurodiverse or having issues in their personal lives.

Jones agrees that PIPs sometimes fail to focus on the employee’s development.

“I once had an employee transfer to my department and his PIP came with him,” says Jones. 

“It very quickly became apparent to me that his underperformance was a symptom of a personal issue and a PIP wasn’t going to fix that. People don’t suddenly decide to be a poor performer, there’s always a reason.”

To find out what’s really going on, Jones suggests being curious with the employee and posing questions by saying things like ‘I’ve noticed’, so employees don’t feel like they’re being interrogated.

“Questions such as, ‘I’ve noticed that your performance is going off track. This is unusual for you. What’s going on?’ or ‘I’ve noticed you’re not meeting the agreed KPIs. Can we discuss what’s going on?’ are worth asking,” says Jones.

“If the conversation with the employee is framed differently the manager can avoid going down the wrong rabbit hole. After all, the goal is to set employees up for success.”

Getting to the root of the problem might mean having a difficult conversation with the manager to ensure the employee was set up for success in the first place, says White.

“Too often, I find the employee wasn’t onboarded properly or didn’t receive adequate training on what is expected of them,” she says.  “That’s when we go back and look at the onboarding checklist or try to fill the gaps in the employee’s training.”

Identifying and filling those gaps should be part of the development plan. The plan should also include clear objectives, achievable timeframes and regular check-ins so the success of the plan can be measured. 

If this sounds remarkably like a PIP, that’s because it is.

“I actually use the [FWC’s] performance improvement plan template and change the name to development plan,” says White. 

“The whole situation [with PIPs] is really uncomfortable for most people, so I think we should do what we can to make it easier.” 

“Any plan needs to have carrots attached to it, rather than the stick.” – Desleigh White CPHR, HR consultant, People Matter Mediation and HR Solutions

Development plans are a good starting point, but they don’t always work. In this case, White might move to a performance improvement plan.

“I would suggest moving to a PIP to up the ante, possibly with a shorter time frame. The development plan can be used to counter the ‘but I’ve never been told about this’ response,” says White.

“Showing that you’ve done everything you can to help the person succeed is important for them.”

Play the long game 

Renaming PIPs makes a lot of sense if your employees only see them as a punitive measure.  

Development plans or performance re-engagement plans, as HRM has previously written about, often serve as a legal safety blanket for employers. If an employee makes an unfair dismissal claim, PIPs are an important part of the record-keeping process; they demonstrate that the employer attempted to help the employee. (Although, they can sometimes backfire, as HRM reported in 2019).

However, this means some employers will put an underperforming staff member on a PIP having already decided to dismiss them. 

Even if that’s not the case in your organisation, if an employee thinks that’s what’s happening, they’re much less likely to actively engage with the process.

“Any plan needs to have carrots attached to it, rather than the stick,” says White. “Rewarding or recognising the behaviour along the way is more likely to make the plan successful in the long run.”

While the possibility that they might get fired could inspire employees to pick up their performance for the short term, it’s unlikely to have a lasting impact. However, recognising their improvement might. 

In White’s opinion, positive reinforcement is a much stronger force to encourage good performance than anxiety-inducing approaches, such as the threat of termination, and formal warnings. However,  recognition must be specific to avoid coming across as insincere. Take the time to spell out what they did well.

“For instance, say something like, ‘Great job on the XYZ project. You were a key member of the team, collaborated well, received positive stakeholder feedback and the project was delivered on time,’” she suggests.

By getting to the root of the issue and implementing a performance improvement effectively, you can help employees to move through what are often only rough patches or small knowledge gaps. 

HR professionals can help to remove the stigma of a PIP by creating a culture that focuses on continual improvement for all – underperformers, middle-of-the-road employees and your star players. After all, there’s always room to improve. 

Telling an employee they’re underperforming or that you’re putting them on a performance improvement plan can be uncomfortable discussions. Learn the art of having difficult conversations at work with this short course from AHRI. Sign up for the next session on 16 February.