People Management

What is a PIP? A Guide to Creating and Using Performance Improvement Plans

3 August 2023

8 min read

Kelsey Breton
Kelsey Breton

In the dynamic landscape of the corporate world, organizations strive for peak performance and productivity from their employees. However, the reality is that at times, employees may face challenges that hinder their ability to meet expected standards. 

In this comprehensive guide, we will delve into what is a PIP, and explore how they can be the roadmap to growth and development for both employees and organizations. We will uncover the importance and benefits of Performance Improvement Plans, understand how they can rescue potential talent, offer legal protection, build trust and engagement, and address issues proactively.

What is a PIP?

what is a pip

A PIP — or Performance Improvement Plan — is a structured and goal-oriented process designed to help employees enhance their performance in specific areas, typically where they may be struggling. Essentially, a more boiled down answer to, “what is a PIP?” is that it’s a roadmap for growth and development. When an employee’s performance falls below the expected standards, a PIP can be a powerful tool to provide support, identify areas of improvement, and encourage them to reach their full potential.

The Importance and Benefits of Performance Improvement Plans

Now that you’re no longer wondering, “What does PIP stand for?” Let’s examine the various ways in which PIPs are essential tools for HR teams, and how they can benefit your organization as well as the employees put on them.

Rescuing Potential Talent

Every organization has its share of high-potential employees who may be experiencing a temporary dip in performance. These dips can be a result of many things, from employee burnout to a lack of engagement, or other factors such as personal life events or a lack of training.

When employee’s exhibit a dip in performance, it’s important to take the time to touch base, check-in with a 1-on-1 meeting, and share your observations (both positive and negative feedback) to begin the process of addressing their change in performance, and crafting a plan to help them get back on track.  A well-crafted PIP can be a game changer, helping to turn the tide and nurture their growth.

Legal Protection 

Performance Improvement Plans also offer a protective element to your organization. During the employee lifecycle, you may encounter some talent whose performance declines and despite your best efforts, does not improve. Should the need for termination arise in the future, having a documented PIP can demonstrate that you provided adequate opportunities for improvement and fairness, and can protect HR and the company from any claims of unfair termination. 

Building Trust and Engagement

What is a PIP if not a tool to invest in and help grow your employee’s performance and abilities? 

Performance Improvement Plans, when well executed, should be tools to work with your employees to help them overcome their challenges and tap into their full potential.  When employees know that their employer invests time and effort to support their development, it fosters a sense of trust and loyalty. PIPs can boost employee morale and drive engagement for happier, more motivated employees.

Addressing Issues Early

PIPs are proactive tools, enabling you to address performance concerns before they escalate. Because performance reviews typically only take place on a 6 to 12 month basis, regular check-ins and PIPs can play an essential role in keeping performance on track. With a PIP, you can address any concerns as soon as they arise, helping to course correct and avoid larger issues. Early intervention is key to avoiding more serious performance problems down the road.

The Role of Managers and HR in PIPs

As HR professionals and managers, you play a pivotal role in the success of PIPs. Here’s what you need to know:

Effective Communication

When introducing a PIP, clear communication is paramount. Employees may need you to clarify what is a PIP, and what it means for their role. HR and management are needed to clearly explain the process, expectations, and objectives, ensuring the employee understands their role and yours. 

It’s also important to reiterate to employees that a PIP is a tool not to reprimand, but to help aid them in reaching their full performance potential. Which will not only help employees open up to receive assistance, but will promote employee buy in for the process.

Objective Metrics

A successful PIP relies on measurable goals and specific performance metrics. That’s where leadership comes in, establishing achievable targets and tracking progress to evaluate your employee’s development accurately helps provide context to their performance improvement plan and sets them up for success with achievable goals and realistic expectations.

Continuous Support

PIPs are not punitive measures; they’re about offering support. HR teams and managers are available to discuss challenges, provide guidance, and celebrate achievements during the journey to help keep employees motivated and onboard with their PIP.


As the administrator of an employee’s Performance Improvement Plan, it is your role to ensure that all PIP-related discussions, feedback, and progress updates are thoroughly documented. This documentation will be invaluable should you need to make future decisions, and serves as a valuable reference point in performance reviews and other employee related matters.

Empathy and Understanding

Lastly, HR teams and managers play an integral role in offering empathy throughout the performance improvement process. Each employee has unique circumstances, and may have a difficult time understanding or accepting the need for a PIP. Taking a compassionate approach can make all the difference in their success.

7 Steps to Create an Effective PIP

Now that you know what is a PIP, why they matter, and your role in implementing them, let’s explore the steps to create a successful PIP.

Assessment and Identification

Start by identifying the specific performance issues that need improvement for your employee. Use objective data, performance reviews, and feedback to pinpoint areas of concern so you can clearly and directly address where they need improvement.

Collaborative Goal Setting

Engage your employee in setting achievable and measurable goals. Ensure that these goals align with your company’s overall objectives and are tailored to the employee’s role. Use common goal frameworks such as SMART goals, OKRs, and Key Performance Indicators (KPIs) to help guide the process.

Actionable Strategies

Work together to develop actionable strategies that will help your employees achieve their goals. This is where employee buy-in is essential. By first determining the goals that your employee wants to achieve and aligning them to larger business objectives, you can come to create a strategy that is realistic for your employees. This helps motivate your employees and keep them engaged throughout the process.

Be sure to provide ample resources, training, and support as needed to help keep them on track.

Clear Timeline

Establish a reasonable timeline for the PIP, outlining key milestones and checkpoints to review progress. Most importantly, make this timeline clear for your employees, providing them the context and tools to easily follow and track their progress.

Regular Check-Ins

Schedule regular check-ins to assess progress, address challenges, and provide constructive feedback. This continuous feedback loop is essential for success, and will further promote your employee’s feeling of accomplishment as well as feeling supported in their growth.

Recognition and Encouragement

Celebrate your employee’s achievements and progress as they work through each milestone on their PIP. Positive reinforcement can be a powerful motivator, and acknowledging their achievements and commitment can help keep them engaged and motivated throughout the process.

Evaluation and Next Steps

At the end of the PIP period, evaluate your employee’s progress. If significant improvements have been made, recognize their efforts and continue supporting their growth. If further improvement is needed, assess appropriate next steps, which may include additional training or support.

Strengthen Employee Performance for Continuous Growth

Embrace PIPs as opportunities for growth, and watch your employees flourish and contribute to the success of your organization. Remember, a well-executed PIP can turn stumbling blocks into stepping stones for your team’s future achievements. 

The success of a PIP depends on fostering an environment of open communication and continuous support. By working together, you can transform the questions of what is a PIP from a potential challenge into a catalyst for positive change and development. Keep your PIP process approachable and results-oriented, and your organization will reap the benefits of a motivated and empowered workforce.

what is a pip

To help your organization manage your performance management journey, Omni is here to support your organization with cutting-edge AI-powered performance management solutions. Try a 14-day free trial and experience the difference Omni can make in elevating your performance management practices. 

what is a pip

If you’re not quite ready to dive into automation but still looking for additional support in your PIP journey? Download our free Warning Letter Templates to help carefully address declining performance with clarity and tact.

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