A performance improvement plan (PIP) is a formal, documented process setting out where an employee's performance falls short, what specific improvement is required, what support will be provided, and by when performance must reach the required standard.
Performance improvement plans explained
A PIP formalises a conversation that has usually already happened informally several times. It documents the specific gap, the standard expected, the support being offered and the timeframe — typically between thirty and ninety days.
A well-constructed PIP contains four things: precise description of the shortfall with examples, a clear definition of what acceptable performance looks like, the support the organisation will provide, and the consequence if the standard is not met.
Why PIPs have a poor reputation — and when they work
PIPs are widely regarded as a prelude to dismissal, and in many organisations that reputation is deserved because they are only ever used to build a paper trail.
Used properly they are a genuine intervention. The determining factor is whether the organisation actually wants the person to succeed. If the support offered is real, the standard is achievable, and the manager engages seriously, a meaningful proportion of PIPs end with performance recovered.
In an Australian context, documented performance management is also relevant to the fairness of any subsequent dismissal. The Fair Work Ombudsman provides guidance on managing underperformance, and organisations should seek their own advice before acting.
How to run a performance improvement plan
Have the informal conversations first. A PIP that arrives without warning suggests the manager avoided the issue until it became formal, which is a management failure rather than an employee one.
Be specific about the gap. Attitude is not a performance standard. Three customer complaints in six weeks relating to tone at the counter is.
State the support explicitly — coaching, additional training, a mentor, adjusted duties — and then actually provide it.
Meet weekly during the plan, not once at the end. A PIP with no contact until the review date is an assessment, not an improvement process.
PIP vs informal performance conversation
An informal conversation is the first response to a performance concern and should happen at the first instance, not the fifth.
A PIP is what follows when informal conversations have not produced change. Organisations that skip straight to a PIP tend to have managers who avoid difficult conversations until they become formal problems.
Common mistakes
- Issuing a PIP as the first the employee hears of a concern
- Describing the gap in terms of attitude or personality rather than observable behaviour
- Offering support in the document and not providing it in practice
- Setting a standard that would be difficult for a strong performer to meet
- No contact between issuing the plan and assessing it
Frequently asked questions
A formal documented process setting out a performance shortfall, the improvement required, the support provided and the timeframe.
Usually thirty to ninety days, depending on the role and the nature of the gap. It must be long enough for genuine improvement to be demonstrated.
No. Where the support is genuine and the standard achievable, a meaningful proportion end with performance recovered. Where a PIP is used only to build a paper trail, the outcome is usually predetermined.
The specific shortfall with examples, a clear standard, the support being provided, review dates, and the consequence if the standard is not met.
The manager runs the conversations and the coaching. HR provides the framework, ensures consistency and advises on process.