How to Create a “Performance Improvement Plan”



In every workplace there are bound to be a few employees who struggle with performance issues. This can be a source of stress for managers who only want to bring out the best in their people. Performance reviews are designed to help manager’s pinpoint specific areas where employees need improvement. But what if you have an employee who has been given goals repeatedly and not been able to reach them due to performance issues? How should this be handled?

From an HR perspective, this is when you would consider using a performance improvement plan (PIP) to help to bring the employee up to speed. Here’s how to create a manageable PIP, using SMART goals.

SMART stands for specific, measured, agreeable, realistic and timely. When creating performance improvement plans, this can be an effective and simple way to successfully bring even the most difficult employees up to speed. Here’s how it works.

Specific – In order for goals to be effective they must be specific. Instead of saying to an employee that they must manage their time better, make the goal specific. For example, state that the employee must complete all expense reports by noon on Fridays. This is specific and related to performance.

Measured – Being able to understand and track performance is part of the measurable aspect of a PIP. State that the employee will complete the weekly reports for 30 days in a row, at which time the performance review process will be updated with the goal achieved. Again, it’s a specific measurable goal.

Agreeable – When working on a performance improvement plan, it is critical that the employee buys in to the idea. The way to achieve this is to create goals that are agreeable by both parties. This requires some compromise. Ask the employee to set at least two goals for themselves as part of this process. Put the goals in writing, sign off on them, and both agree that these things will take place.

Realistic – You can set the employee up for success when you create goals that are realistic. For example, determine if there are any obstacles to the person completing their expense reports every Friday. If it is not realistic for them to do so due to a technology barrier, then this is not a realistic goal. It’s important to talk through these things when developing the plan.

Timely – Along with setting a measurable goal you’ll want to set a goal that is timely. This could include how you will know that the employee is completing the task. For the example given, come up with a system that the employee can report to you every Friday if they have turned in their expense report for the week. This keeps the employee accountable and the goal is timely and manageable.

To complete the performance improvement plan, put all of this in writing and make sure to sign off and put a copy in the employee’s file. Provide a copy to the employee as well. And make sure that you review it within the first 7, 14, and 21 days after the plan takes place. Nearly every employee wants to do better, so with a performance improvement plan in effect, they will have a chance to perform well on the job.

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