How to create a performance improvement plan (+ Template)

Management & Annual Reviews

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Do you have employees struggling to meet their job requirements? Knowing who your poor performers are doesn’t help unless you know the reasons for their performance and what’s needed to help them perform optimally. 

Disengaged employees have an 18% lower productivity rate, lower profitability rate, and higher occurrences of absenteeism. These disengaged employees are not performing optimally for your business and if they’re not identified and set on a more productive path quickly, it can cost your company nearly $3,400 for every $10,000 in salary. 

In this article, we’ll explain the purpose and benefits of creating a performance improvement plan and provide you with a template you can use to begin creating one for your team to turn disengaged employees into engaged ones. 

What is a performance improvement plan?

An employee performance improvement plan (PIP) is a formal document that outlines where individual employees fall short of expectations and how to improve. It can be included as part of regular performance reviews as a roadmap for growth. The best plans provide specific examples of employee performance that are unacceptable or don’t meet predetermined, measurable objectives. It also includes clear steps for the employee (or supervisor) to follow to improve performance. 

Performance plans follow a standard structure, with some flexibility based on the types of employee performance data you have and the needs and goals of your organization. Your plan will likely include the following:

  • Summary of the job description or measurable expectations and goals
  • List of areas requiring improvement
  • List of steps or actions to improve employee performance.
  • Date by which employee performance must be improved (and any repercussions if not achieved)

A performance improvement plan isn’t just for underperformers. It can also motivate high-performing employees to reach their long-term goals, including the potential for promotion. 

Should HR be involved in a performance improvement plan?

HR isn’t directly responsible for conducting or ensuring employee performance is improved. That’s the role of a manager. Usually, you’d conduct your performance reviews with the employee directly and work together to develop an achievable performance improvement action plan together. Once you have an agreed upon plan, you’d submit it to HR. 

Benefits for performance improvement plans

Why are performance improvement plans important for businesses and employees? 

  • Promotes a positive company culture: Hard-working employees are rewarded for their success, and everyone learns how to pull their own weight for a positive outcome for their department or organization. 
  • Minimizes staff turnover: Helping your current employees perform better is less expensive than firing them and onboarding someone new. It’s more cost-effective to provide skills upgrades for a current employee than to give a new employee your complete training program and mentoring period. 
  • Supports a structured employee performance process: Performance improvement plans take regular employee reviews to the next level, allowing the employees to see or create measurable objectives for their roles. They then get clear, actionable information about how to move forward professionally in their career and in support of the company. 
  • Minimizes liability: A performance improvement plan provides clear expectations and consequences of not meeting expectations. If you must demote or terminate an employee, your HR team has a clear record of the steps you’ve taken to support the employee’s success.
  • Better customer retention: When your employees are performing their jobs well, customers will notice and are more likely to stay customers longer (increasing your customer retention rates) because they received such great service.

How to assess employee performance

You can measure and track employee performance in many ways. Here are a few sources of data you can use to understand an employee’s performance: 

  • Peer feedback: This is feedback given by the employee’s peers like those they consistently work with.
  • Manager feedback: This is feedback from their direct manager (such as from a performance review).
  • Self-feedback: Any feedback the employee may share about their performance. 
  • Customer satisfaction scores: This asks customers to rank their satisfaction with their experience with customer-facing employees.
  • Other customer-supplied feedback: If your company has other sources of customer feedback that can be directly attributed to a specific employee, you can use this data as part of your report.
  • Other metrics: If your company tracks other measurable performance metrics like close rates, time to resolution, and success rates, use these in your report too. 

👉 Learn more about mastering the art of customer service reviews to learn more about your employees. 

How to identify areas for improvement

Based on all sources of employee performance data you collect, look for places where they perform far below their peers or predetermined expectations. The employee must be aware of their expectations in advance, or else they may feel blindsided or threatened receiving a performance improvement plan. 

Identify areas of poor employee performance and suggest ways they can improve them (with your support where needed) within a given timeframe. You can create these goals for the employee, but ideally they should be a co-creation effort to help empower the employee to take an active role in the change. 

👉 Need to boost the performance of customer service reps? Read these tips for improving call center agent performance.

How do you write a strong performance improvement plan?

Do you need to create a performance improvement plan for your team? Here are the steps to get started: 

1. Assess employee performance

Review all sources of qualitative and quantitative data on the specific employee. Highlight examples of where your employee doesn’t meet expectations. Be sure to note if the issues of concern are one-off incidents, or recurring situations. This will be essential in the next step of the performance plan.

If you find higher than expected or too many recurring performance issues, your next step is to determine if a complete performance improvement plan is necessary or if a simple redirection or reminder to the employee is enough.   

2. Determine need for a performance review plan

Before creating a performance improvement plan for a particular employee, you should determine if a complete plan is required and if it will be helpful. You’ll set your own criteria for when to do a full plan, but it will most likely be when:

  • The employee has lower-than-expected performance
  • The employee’s performance issue can be resolved
  • The employee has a chance for a positive outcome for themselves and the company. 

If you determine a full improvement plan is needed, begin the next step.

3. Identify improvement areas

This step is when you’ll include the employee in your discussions. Schedule a 1:1 meeting with the employee to discuss your concerns. This meeting is an excellent opportunity to learn more about their perspective and to work together to further clarify and define acceptable performance, as well as set performance goals together. 

Together, identify the areas of their performance where improvement is needed. Encourage employees to discuss their perspective of the reasons behind their low performance so you have a clear understanding of their point of view. 

Once you both understand the root cause of the performance issues, you can move to step four together. 

4. Develop an action plan

Including the employee in developing an action plan empowers them to invest in the required changes and the expected outcome. 

Focus on creating SMART (Specific, Measurable, Attainable, Relevant, and Time-backed) goals and set incremental goals together so you can monitor performance improvement over time. It’s possible that your employee may not meet the end goal of the performance improvement plan but is showing progress and is meeting your incremental goals. If so, your prescribed consequence may not be necessary if they progress well. 

Your action plan should include the following:

  • Measurable criteria or performance guidelines
  • SMART framework goals
  • Actions required
  • Resources, training, or coaching available to the employee 
  • Metric milestones (if applicable)
  • Date-based milestones needed for success 
  • Any rewards for positive or exceeding outcomes
  • Consequences for not meeting goals

By the end of this step, both of you should have a clear understanding of the root issue, the steps to improve, and the consequence(s) if the employee fails to meet the goals of the performance plan. 

Once you and your employee agree to the plan, it should be submitted to your HR department.

5. Implement plan and monitor

Next, monitor the employee’s performance as they work towards their performance goals. Provide any support or additional resources to your struggling employee promptly. 

Schedule regular check-ins with the employee and keep HR up-to-date on the employee’s progress or any concerns that may arise. 

Once the performance improvement deadline has passed, it’s time for you and HR to discuss the next steps. If they met or exceeded expectations, work with the employee to maintain this performance over the long term. If the employee fails to meet the goals, you can decide if termination or demotion is necessary or if they have proven progress worthy of an extension. 

Why do some employees have poor performance?

There are many reasons why an employee may not be performing as expected. The first is not knowing what their criteria for success are. If that’s clear, then the underperforming employee’s performance is often attributed to one of three factors:

They don’t want to succeed

The employee may not be motivated to succeed in their current role. This could be due to:

  • Not feeling challenged enough in the role. 
  • Not feeling they have a clear growth or succession plan in your organization. 
  • Just in it “for the paycheck.” (Or think they’re not paid enough.)
  • Lacking a personal improvement plan or desire for professional development and satisfaction.
  • Personal issues in their personal life that distract them from giving 100% at work.

If this is the reason behind the poor performance, a performance improvement plan may not help them improve (unless you can find the right motivation for their success). 

They are incapable

Sometimes, the employee wasn’t the right fit for the role. Maybe it was a more senior role they didn’t have enough experience or education to handle. Perhaps their comprehension of the job skills required does not match their skills (such as a job requiring regular heavy lifting, but the employee has physical limitations preventing this).

If this is why they perform poorly at work, you can offer additional training or support to help them improve or move them into a role better suited to their capabilities.  

They don’t have the resources for success

The third option is that you haven’t given them the resources for success. This could include technical resources (such as appropriate software and systems), training support, or a clear hierarchy to approach for help when needed. 

If this is why the employee isn’t performing well, you need to look at your internal systems, processes, and support to see where you can better support the struggling employee.

How machine learning can support your performance improvement plans

You can do an issue analysis to help determine the likely reasons behind poor employee performance. Using a tool supported by machine learning for this issue analysis can save you time. A customer feedback analytics software like Idiomatic can analyze multiple customer feedback sources to determine why your employees are (or aren’t) performing as expected. By understanding what customers are saying about their experience, you can gain valuable insight into why an employee might be underperforming. While you could do this analysis manually, Idiomatic’s AI-driven platform can sort through and analyze mountains of data at scale, quickly and efficiently, giving you specific actionable insights to help your team perform optimally. Here’s a quick video that shows how Idiomatic does this within minutes:


Request a demo of Idiomatic today to learn how it can provide you with the actionable insights you need to support your employee performance improvement plan. 

Try Idiomatic for free today

What is an example of a performance improvement plan for unprofessional behavior?

Here is a performance improvement plan template you can use to create your own employee improvement plan. Modify it to suit the needs of your organization:

performance improvement plan template


Based on the above performance improvement plan template, here is an example for a SaaS company customer service rep who has received lower than expected customer services scores, displaying unprofessional behavior.  

performance improvement plan example part 1

performance improvement plan example part 2