A performance improvement plan, widely known as a PIP, is a way to assist underperforming team members positively and strategically. While there are other methods of assessing team member performance, this method has a more specific purpose — to help a team member, considered a great asset by most, improve performance.
My team and I have effectively used performance improvement plans in our organizations for different reasons and various roles in many departments. Taking a strategic approach is key to getting great results.
Here are five keys to getting the most out of PIPs.
1. Decide if a PIP is warranted
A performance improvement plan is precisely that. It is a plan to improve a team member’s performance. It is not for a team member who isn’t a strong culture fit.
Team members typically fall into four categories. The first category includes individuals who are great culture fits and are high performers. Keep praising these team members, as they are your rock stars. The opposite of that category is a team member who is a poor culture fit and a low performer. These people should be off the team ASAP, because they add no value to the organization and can often bring others down.
A third category is a team member who is a high performer, but a poor culture fit. This is the most challenging category of employee and generally requires conversational exploration as to why there isn’t a culture fit. If there is no way to improve buy-in to the organization’s culture, then there is a strong chance that the employee will move into the category that includes low culture fits with low performers and will need to be let go.
The last category, and the one most ripe for a PIP, is a team member who is a great culture fit but is not performing well. This type of team member believes in the organization’s mission, vision and values but, for some reason, is still falling short. We had a sales team member with a great attitude and work ethic, but he lacked phone skills and had a meager appointment booking percentage. In other words, a culture fit who wasn’t performing to standards — a perfect example of where a PIP is warranted.
2. Have an honest conversation
A PIP should start with a transparent and clear two-way conversation between the manager and the team member. In this conversation, the manager can openly and honestly share specifics about expectations and where there are deficiencies. It is also an opportunity for the team member to share thoughts and insights as to why they might be falling short.
Starting with a conversation before getting into the actual logistics helps to build trust and demonstrates that the PIP requires a team effort for improvement. It should be made clear that a PIP is not a punishment.
We had an instance in which one of our experienced personal trainers was having trouble converting trial sessions into clients. We uncovered that, in her former job, the sales team had been responsible for selling trials, not the trainer. Clearly, the trainer needed more training, coaching and practice.
We might have approached the PIP incorrectly if we had not uncovered this hurdle. An honest conversation leads to the next step.
3. Create clear outcomes
Once there is a clear mutual understanding of the situation, it is time to create a plan. An effective plan begins with a S.M.A.R.T. (specific, measurable, attainable, realistic and timely) goal. It is ineffective to simply require the team member to “perform better.” That is too ambiguous and not at all helpful. Ambiguity leads to confusion and anxiety.
Setting goals or performance outcomes in areas such as sales is typically easy because goals in this department can often be tangible. Using hard numbers can help make goals crystal clear, such as improving a closing percentage by 10 percent or upping introductory personal training bookings by 15 percent.
Other areas may require more creativity, especially when it comes to an improvement in soft skills. Imagine a welcome desk attendant who needs to be more proactive and interactive with members. A goal in this area could be to have the attendant introduce himself to 10 people per shift or to memorize five names a day.
Clarity is essential for success. Once clear outcomes are created, the next step can take place.
4. Determine necessary resources and action
Resources need to be provided to achieve the desired outcome, and action needs to be taken. This is the responsibility of both the manager and the team member. It’s a collaborative effort.
Let’s take, for example, a group exercise instructor whose class attendance is down. The desired outcome is to increase class attendance by 20 percent in 90 days. The manager commits to meeting once a week with the instructor to work on choreography, cueing and other aspects of teaching a good class. Those are the resources that will be provided to the team member. The team member will commit to attending those meetings. In addition, she will advertise her class by posting on social media three times per week, attending another instructor’s classes once a week, and personally inviting five people per week to attend her sessions.
The manager’s resources and the instructor’s willingness to perform these agreed-upon tasks create a formula for improved performance.
5. Assign a timeline with checkpoints
A typical PIP is 90 days long. It often has 30- and 60-day formal check-ins. In addition, there should be frequent informal follow-ups throughout the process.
Checkpoints include incremental breakdowns of the goal and help to determine whether the team member is on track. This process not only helps to assess progress but also to reveal issues. Without check-ins, the team member may feel lost and unsupported.
Imagine creating a PIP in any of the above examples and saying, “Good luck! Let’s see how you do in 90 days!” That would be neither motivating nor supportive, and therefore, likely ineffective. In that scenario, it may cause the team member to regress, lose motivation and even quit.
When you check in frequently, one of two things happens. The first is a realization that progress is happening. This confirms things are on track for the manager and the team member. Celebrate these small victories! The second thing that can happen is discovery that the team member is behind schedule. If that’s the case, the goal can be reassessed, allowing for adjustments in terms of resources and actions.
Given that the purpose of a PIP is to make sure a good team member performs better, either result is valuable and will enhance the success of the PIP.
Those are critical steps for executing a successful performance improvement plan. To reiterate, PIPs are appropriate for team members who are great people but not performing to expectations. If a team member is not a great fit in general, PIPs are not the solution — termination often is.
PIPs are not a punishment or a tool to document bad behavior. They are designed as a team effort to help improve specific performance while improving morale, teamwork, the workplace environment and the overall success of your business.