Performance Improvement Plans: Don't Overlook Them in the Performance Management Process

We recently issued a white paper on the topic of performance management – how having a solid strategy, coupled with the automation of key processes, can give organizations a significant competitive advantage and help to drive business growth.  Many times when HR professionals are designing performance management processes for their organization, they overlook important components.  These components are forgotten in part because they are small, used on an exceptional basis and, at times, are perceived as uncomfortable for both employees and managers. 

One example of an overlooked process that I rarely see best practices for are performance improvement plans (PIPs).  In an ideal world, PIPs should be a positive tool for helping an under-performing employee to succeed, with the manager providing support and encouragement so the employee can reach the desired level of performance.  But in many organizations, I’ve witnessed PIPs being used as an after-thought for employees that are deemed as not worth saving, with management going through the exercise of a PIP for legal purposes.  In reality, HR and management waited too long to address the performance issues, and by the time they got around to it, either the employee or manager – or both – had given up and checked out. 

Being able to support an employee to get them get back on track should be incorporated into every talent management strategy.  It shouldn’t be a “going through the motions” activity on the road to letting an employee go.  And there should be a well thought out process for how it is integrated and managed. 

Here are some of the best practices for performance improvement plans I’ve collected over the years, including:

• Criteria for establishing the type of performance required for the PIP
• Components for developing an effective PIP
• A format you can use for a PIP
• Requirements for inciting behavioral change in the employee
• Getting commitment to executing a PIP from both the manager and the employee

Developing PIP Criteria

When developing the criteria for the PIP, HR practitioners should do the following:
 

• Determine what improvement(s) will prompt desired – and reasonable – results from the employee
• Incorporate the manager’s opinion into the plan’s criteria
• And also incorporate the employee’s opinion – a one-sided PIP is not a fair and balanced tool for improving performance

PIP Components

The components of an effective PIP should:
 

• Be practical and related to performance
• Be time oriented, with an agreed-upon timeline (What can be realistically completed in the time allotted?)
• Be specific – clearly describe what should be done and/or achieved in this time frame
• Involve commitment from the manager and other resources.  This is an important one – the purpose here is to help the individual employee improve his or her performance.  Many managers have written-off the employee at this stage and are not engaged in the PIP process.

The Format 

When formatting the PIP, be sure to include the following sections:
 

• PIP assignment date
• Violation / incident
• Improvement needed (with rationale included)
• Action plan (SMART – specific, measurable, achievable, relevant and time-based)
• Action plan results (completed by the manager at the end of the PIP period)
• Planned completion date
• Actual completion date (with rationale if delayed)
• How manager support will be provided
• How resource(s) support will be provided
• PIP start date
• PIP review date(s)
• Comments for manager and employee to use for progress or notes)
• Agreements (PIP understood by employee/ manager agrees to support)

Requirements for Behavior Change

In order for the PIP to be successful, certain factors need to be considered and addressed up front, such as:
 

• Does the employee want to change?  If they do, they need to understand the benefits and feel supported or behavior change won’t happen.  If they don’t want to change and you can’t convince them to change their point of view, you waited too long to start the process. 
• Do they currently have the knowledge of skills?  If not, it shouldn’t be a PIP.  (I recommend the Mager “Performance Analysis Flowchart” – it’s a great tool to use to identify performance discrepancies.)
• Is the manager fostering the appropriate climate?  Climate factors are:

               - Preventing – “Manager doesn’t allow”

               - Discouraging – “Manager said - you can’t do it”

               - Requiring – “Manager directs - just do it!”

               - Neutral – “Manager tells employee to do it”

               - Encouraging – “Manager asks the employee to try it”

Getting Commitment

Developing the PIP is one thing.  But actually executing on the PIP takes commitment from – and an open line of communication between – the manager and employee. 

On the manager’s end, have them commit to the following:
 

• Carrying out the PIP, from start to completion
• Ensuring that the employee understands the PIP and receives a copy of his or her plan
• Makes changes, if necessary, to the PIP
• Reminds employee of the PIP timelines
• Is available to support the employee when needed
• Finds out if there is a problem in meeting PIP deadlines
• Course corrects if the employee is not on schedule to meet target deadlines

For the employee, have them commit to the following:
 

• Executing on the PIP, from start to completion
• Communicate with their manager and notify them if changing circumstances make the PIP impractical

If an organization truly believes in growing its people, then it should also have a serious approach to helping an employee successfully complete a PIP.  Don’t forget –investing in your people is not just about focusing on the development of high potentials and top performers.  PIPs can realign people with departments and the business, resulting in improved performance, higher productivity and increased organizational value. 

Laura Durando is Manager, Strategic Projects and Organizational Development for Cornerstone OnDemand.  She has over 25 years of business experience and has held executive positions in Talent Management and Organizational Development with multiple organizations