Performance Improvement Plan: cool tool or lame duck?

The Performance Improvement Plan: effective tool to manage employee underperformance or more paperwork you don’t need? Here’s both sides of the PIP story.

One of the most challenging tasks for a manager is dealing with an employee whose performance or conduct isn’t up to expectations. Underperformance doesn’t just affect the output of an individual employee – it has the potential to impact customers, productivity and co-workers. Failing to address underperformance in a timely and effective manner sends a message to other employees that you’re not serious about maintaining consistent performance and conduct standards at work.

Early informal intervention from a manager should be the first step in any situation where performance has declined. In situations where such support fails to bring about improvement to the employee’s work performance, it may be necessary to implement a more formal process through the introduction of a Performance Improvement Plan (PIP); a structured plan that outlines an employee’s performance issue and the specific steps the employee needs to follow for improvement.

A well written PIP should

• clearly identify the performance that needs to improve or the behaviour that needs to change
• identify the impact of the underperformance on the business or co-workers
• outline what steps will be taken to improve the performance and identify the people or resources that will be provided to help the employee
• define timeframes for improvement
• set a date for a follow up meeting to review progress

Some HR professionals feel a Performance Improvement Plan is essentially the first step in dismissing an employee…that a PIP has less to do with actual performance improvement and more to do with power and control from a manager. According to this school of thought, if a manager really wants to improve someone’s performance they’d sit down with the individual and talk to the employee like an adult.

While the “let’s sit down and discuss” approach has merit, my personal opinion is that a well-executed PIP can be a fair and effective tool for remedying underperformance when other less formal options have been exhausted. It can be used in instances when someone needs to be shocked out of complacency and is a handy resource as evidence if the matter later ends up in front of the Fair Work Commission for unfair dismissal or a WorkCover claim for a psychological injury.

Best practice employers have regular discussions with employees about their performance…both good and bad. These conversations help clarify goals for individuals and provide feedback to guide employees to perform at their best. When underperformance occurs, good managers take steps to manage it appropriately, sensitively and promptly. This includes use of a Performance Improvement Plan when appropriate.

Like to know more about your options in addressing employee underperformance? It’s not as complicated as you might think and, once you know the basics, you’ll spend less time in dealing with employee issues and more time on building your business. Or golf. Whatever works for you. Call Bare Bones today…and tomorrow you’ll be teeing off!