Performance Improvement Plan (PIP) explained and Word Template

Performance Improvement Plan (PIP) - Toolshero

Performance Improvement Plan (PIP): this article explains the Performance Improvement Plan (PIP) in a practical way. Next to what it is, this article also highlights personnel management for underperformance, why is a manager is talking about a PIP, how to make one, a Performance Improvement Plan Word template to get started and tips. Enjoy reading!

What is the Performance Improvement Plan (PIP)?

The Performance Improvement Plan (PIP), also known as the Performance Action Plan (PAP), is a method for employers to identify performance gaps among employees.

The goal of the method is to address shortcomings among employees or to achieve specific task goals in their performance planning. Also, PIP is used by human resource managers to reduce problems with behavior in the workforce.

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The Performance Improvement Plan (PIP) is a concise and formal document that describes where an employee falls short and what can be done to improve. The document includes details about specific skills and training that employees lack.

The PIP can also be used to assess certain behavioral elements of an employee. The document then specifies how certain behaviors must be adjusted. Regardless of the purpose for which the document is drawn up, the PIP contains clear steps that the employee must go through in order to achieve the desired improvement.

Usually a deadline of 30, 60 or 90 days is used to achieve the specified goals in their performance planning. This deadline is included in the PIP document. The consequences are also described if the employee’s performance continues to be inadequate.

Personnel management for underperformance

At some point, every manager will have to deal with an employee who is underperforming. The extent to which this is the case determines whether action is needed. Whether an employee does not meet job requirements, or exhibits certain negative behaviors, how this should be addressed is extremely important.

Sometimes firing employees seems like the most obvious option. In many cases, however, it is also possible to tackle the problems yourself. The process of identifying shortcomings, outlining expectations and consequences helps save time and costs. After all, rehiring and training employees takes a lot of time and resources.

Such performance management also creates a culture of accountability, both for employees and management.

Not every employee finds it easy to receive criticism. That doesn’t mean they aren’t open to it. Employees generally want to develop themselves (Theory X and Y), but more than half of the employees indicate that they will not necessarily work harder when receiving a negative assessment.

That’s because many employees are convinced that their evaluation is inaccurate. That causes them to reject findings as a whole.

Using a PIP can help with this. In consultation with management and HR, a personalized approach can be made that is clearly and concisely set out.

Why is my manager talking about a PIP?

Many people think that the end of their employment with a company is near when the manager talks about a Performance Improvement Plan (PIP). The opposite is often true. When a company finds your performance so under-performing that you should be fired, management doesn’t take the time to improve your performance.

Just keep in mind that if you don’t live up to expectations, there will be consequences. The consequences of this should be included in the document. Employee expectations must be realistic.

How do I make my Performance Improvement Plan (PIP) a success?

As described above, a Performance Improvement Plan (PIP) is a sincere way to develop employees. Communication with management and HR is crucial in this regard. Without clear communication, it is impossible to know what management expects from an employee. Do you find this difficult to estimate? Discuss this!

As indicated earlier, the duration of a PIP is predetermined. Discuss the progress in between with some regularity. This ensures that you are not suddenly faced with surprises at the end of the term.

How do I use a Performance Improvement Plan (PIP) as a manager?

Step 1: assess whether a PIP is needed

A PIP should primarily be used to help an employee improve, not as a way for a frustrated manager to initiate a layoff. If a PIP is used for that purpose, the PIP means nothing more than a part in the layoff documentation that should already exist.

HR assesses whether a PIP is the right way to help an employee move forward. A PIP may also not be the solution in some cases.

In making this assessment, HR takes into account the following:

  • Is there actually a problem with the performance or behavior of an employee? Can this problem be substantiated?
  • Is the PIP used to help the employee succeed? Or is it an action by an insecure manager?
  • Is it likely that the problems can be solved in this way?
  • Does the employee receive sufficient training and guidance to successfully complete the PIP?

Step 2: develop a concept PIP

Once the need for a PIP has been established in the previous step, it is time to draw up a concept. This concept is usually drawn up by the line manager of the employee concerned. The concept should in any case contain:

  • Job description and relevant employer policy;
  • Information about what are acceptable levels of performance for the employee;
  • Information about the employee’s current performance and how it falls short;
  • Clear and measurable objectives according to the SMART Goals principle;
  • Description of what guidance will be given by management;
  • Details about the frequency at which employee and management meet for a progress meeting;
  • Clear consequences for not achieving the objectives. Examples of this are: degradation, transfer or termination of employment.

Step 3: review PIP

HR should see and approve the concept. One of the goals of this review is to dispel the bias against the employee. They assess, among other things, whether the problem is clearly defined and whether the performance gap is well substantiated. They also ask themselves the following questions:

  • Are the expectations reasonable for the employee?
  • Is the employee prescribed a realistic goal?
  • Does the employee have the right tools at their disposal to successfully complete the PIP?

The goal of this step is to ensure that the plan is realistic, achievable, and fair.

Step 4: implementation of the Performance Improvement Plan

During this fourth step of the PIP it is time to invite the employee for an interview. The plan is discussed in this meeting. Everyone involved understands that this is not a fun meeting, but it helps when managers express their involvement and support. Employee feedback on the plan should always be encouraged and seriously considered. Be open to change based on employee input.

After the meeting, the manager, together with HR, looks at whether changes need to be made. Once the final plan has been drawn up, it is signed by the manager and the employee.

It sometimes happens that the employee does not want to cooperate. If this is because there are substantive objections to the plan, then this should be seriously considered. If this is not the case and the employee is simply unwilling, the employer must decide between demotion, transfer or dismissal.

Step 5: monitor the progress of the plan

The line manager of the employee in question must ensure that all progress meetings are planned and take place. Canceling these meetings or being late shows a lack of interest and commitment. Progress, or lack thereof, should be documented. Gaps in training or other resources should also be included in the documentation.

Encourage the employee to conduct these meetings him- or herself.

Step 6: Performance Improvement Plan conclusion

When the employee has successfully completed the Performance Improvement Plan (PIP) by meeting the objectives, the employer must formally close the process. This is important because it recognizes the employee’s success. This gives confidence to both the employee and the employer and is the basis for the renewed working relationship. This is a positive moment for the employee. The manager must be sure that the employee understands that continued good performance is expected.

If an employee has not been able to improve performance, or if performance has even deteriorated, the Performance Improvement Plan must also be closed, but the consequences will apply as agreed.

If the employee has made sufficient effort, but the objectives have just not been achieved, it may be worth expanding the plan or giving the employee a little more time. If it turns out that the objectives were not realistic after all, the PIP can be closed successfully on the basis of the improvements achieved.

Performance Improvement Plan Word template

To set-up or write a PIP, you can use this ready-to-use Performance Improvement Plan Word template in a .DOC format.

Download the Performance Improvement Plan template

This template is exclusively for our paying Toolshero members. Click here to see if a membership is something for you!

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Now it’s your turn

What do you think? Do you recognize the explanation about the Performance Improvement Plan (PIP)? Have you ever worked with a PIP? Which alternatives are you familiar with when it comes to improving performance and behavior among employees? Do you have any tips or comments?

Share your experience and knowledge in the comments box below.

More information

  1. Carter, J. H., & Meridy, H. (1996). Making a performance improvement plan work. The Joint Commission Journal on Quality Improvement, 22(2), 104-113.
  2. McConnell, C. R. (2003). The manager’s approach to employee performance problems. The health care manager, 22(1), 63-69.
  3. Messmer, M. (2003). Managing employee performance issues. Strategic Finance, 13-15.
  4. McCarthy, A. M., & Garavan, T. N. (2001). 360 feedback process: Performance, improvement and employee career development. Journal of European Industrial Training.

How to cite this article:
Janse, B. (2022). Performance Improvement Plan (PIP) explained and Word Template. Retrieved [insert date] from Toolshero:

Published on: 04/06/2022 | Last update: 02/25/2023

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Ben Janse
Article by:

Ben Janse

Ben Janse is a young professional working at ToolsHero as Content Manager. He is also an International Business student at Rotterdam Business School where he focusses on analyzing and developing management models. Thanks to his theoretical and practical knowledge, he knows how to distinguish main- and side issues and to make the essence of each article clearly visible.


One response to “Performance Improvement Plan (PIP) explained and Word Template”

  1. Nancy Komola says:

    For the most part, I agree with this approach. However, I’ve found it more impactful if the manager engages the employee by outlining (in writing) what’s expected of the employee, opposite examples of the performance delivered (or behavior demonstrated) in the area(s) of concern… and then has the EMPLOYEE draft what THEY will do differently to close the gaps, with or without reasonable assistance from the employer. If the supervisor writes the goals, etc. there is less buy-in. The employee then presents their draft plan to close the gaps for the supervisor’s review and approval (this is where the supervisor will get a sense for how sincerely the employee wants to improve, as well as be able to make changes/adjustments to the plan as necessary) … and then move on to discuss follow-up, etc. Not only have I found this more impactful, but it also shifts part of the work off the supervisor and onto the employee – who hopefully cares about improving their performance. I hope this is helpful to others.

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