Arjun Paleri, Raisa Pinto and Harinie Seenivasan
Introduction
With the appraisal season now complete, addressing an employee’s underperformance can be both challenging and sensitive, often causing discomfort. However, it is essential to address the issue with the affected employee(s) in an effective and structured manner, aiming to help them develop and improve through a well-designed plan. The typical approach to managing this situation is to place the employee on a Performance Improvement Plan (“PIP”), which, when implemented effectively, can support the employee in enhancing their performance.
This article provides guidance on how to manage performance improvement plans for employees identified as needing improvement in their job performance.
What is a PIP?
A PIP is a systematic approach used to document and monitor an employee's performance in relation to clearly defined objectives. Within the framework of a PIP, the employee receives specific feedback on areas of their job performance that need improvement, with a structured plan in place to address these issues and achieve resolution within a designated timeframe.
Key Elements of a PIP
It is crucial that the process is conducted fairly, transparently, and objectively, with a focus on enhancing performance and providing support to the employee. Thus, in doing so, the following key components need to be borne in mind:
Prerequisites
Comprehensive ‘Appraisal Policy’, featuring a section dedicated to PIPs
Every organization should prioritize the development of a robust appraisal policy that includes a specific section on PIPs. A well-defined appraisal policy that incorporates PIPs, helps employees understand from the beginning the criteria that recognize strong performance, and the steps needed for improvement if their performance does not meet expectations. Additionally, the policy should outline the PIP process and the potential outcomes of successfully completing or failing to meet the PIP requirements. Providing this information upfront ensures transparency and fairness throughout the process.
Feedback mechanisms, focus areas, and future discussions
It is crucial for organizations to implement a consistent feedback mechanism, regardless of whether an employee is or is likely to be placed on a PIP. This feedback should emphasize both the employee’s strengths and the areas needing enhancement. Such an approach will provide employees with insight into their future prospects within the organization and establish a foundation for subsequent conversations about potential PIP placement, if necessary.
Responsibilities of managers and HR personnel
To implement the points outlined in (a) and (b) above, the active involvement of managers and HR staff is crucial. Both reporting managers and HR personnel must ensure that employees are well-informed about, and fully understand, the policies and procedures. Furthermore, managers and HR teams should prioritize the delivery of consistent and meaningful feedback. As emphasized, it is essential to not only establish clear policies and processes but also foster a culture of continuous and regular feedback.
PIP – step-by-step process
When deciding to place an employee on a PIP, it is crucial to follow a structured approach to ensure fairness, transparency, and alignment with the desired objectives.
Assessment of issues – Conduct a thorough assessment of the performance gaps or behavioural concerns. Gather data from performance reviews, self-assessments, and feedback from managers to accurately identify the areas that need improvement.
Creation of PIP document – Create a formal PIP document that outlines the specific issues, expected outcomes, and the action plan designed to address the performance gaps.
Timeline – Establish a reasonable timeframe for the employee to meet the expected outcomes, typically ranging from 4 to 8 weeks, depending on the nature of the issues.
Discussion – Once the preparatory steps (a) through (c) are completed, schedule a meeting with the employee to discuss the PIP. Provide the employee with the PIP document and ensure each section is clearly explained and understood.
Track Progress – Regularly check in with the employee throughout the PIP period to assess their progress and provide ongoing feedback. Adjust the action plan as necessary based on their progress and any challenges faced.
Decision – At the end of the PIP period, conduct a formal evaluation to determine if the employee has met the expected outcomes. Document the results and decide on the next steps, which may include successful completion of the PIP or further actions as required.
Points for consideration
To ensure that the PIP process is effective, fair, and transparent, the following strategies are beneficial:
Assistance: Provide employees on a PIP with the necessary resources, such as training, coaching, or mentoring, to facilitate their development.
Impartial Process: Ensure the PIP process is applied consistently to all employees requiring performance improvement.
Transparency: Create an environment of transparent and open communication throughout the PIP process. Provide specific, actionable, and timely feedback, both positive and constructive, while encouraging employees to share their thoughts and concerns.
Documentation: Keep detailed records of all meetings, communications, and progress throughout the PIP. Utilizing standard, pre-approved templates for documentation, including a final report, can improve efficiency and streamline the process.
Conclusion
Effectively implementing a PIP is twofold: (i) it helps employees enhance their performance, and (ii) if the PIP does not produce the desired outcome, it enables the organization to take appropriate actions. By following these structured steps, organizations can positively influence both individual and team performance, while ensuring fairness and impartiality.