For an organization, it’s more beneficial to retain, train and upskill existing employees than to hire new ones. Employee learning and development is becoming increasingly popular today. Especially since the COVID-19 pandemic forced us to move into our homes and adapt to a new business landscape.

Amidst this chaos of getting accustomed to new surroundings, workplace practices like Zoom meetings and online communication, many employees may have struggled to keep up their performance.

In such cases, organizations have a tool called a performance improvement plan or PIP to make sure they invest enough time and resources to help their employees be more productive. Not only does this help them retain talent but also drives a high-performance work culture.

Read on to discover all you need to know about a performance improvement plan and how it can help you decrease your employee turnover rate.

  1. What Is A Performance Improvement Plan?

  2. How To Create A Performance Improvement Plan

  3. Why Your Organization Needs A Performance Improvement Plan

  4. Harappa’s High Performing Leaders Program

What Is A Performance Improvement Plan?

A performance improvement plan is an action plan created for employees by their supervisors or managers in collaboration with human resources. The purpose of an employee performance improvement plan is to help employees correct repetitive errors, mistakes or problems in performance. For instance, if one of your employees repeatedly delivers low performance on a particular task but does well otherwise, you can create a performance improvement plan for them to address specific issues.

Many organizations may choose to simply terminate an employee’s contract in case their performance doesn’t improve. However, to really retain talented employees and create a work culture that relies more on long-term development than short-term outcomes, an employee performance improvement plan is the solution.

Here are some characteristics of a performance improvement plan:

  • A performance improvement plan addresses specific tasks, issues and actionable items for an employee

  • It helps the employee keep track of their progress throughout the process, collaborate with their teams and seek guidance to make sure they’re doing everything they can to deliver better results

  • There is a holistic review process involved so that the employee knows where and how they’ve improved over the course of the performance plan

  • A proper feedback channel is implemented for the employee to discuss goals, roles and actions to be followed in measurable and quantifiable terms

  • The employee is made aware of the repercussions of failing to meet the requirements of their specific performance improvement plan

A PIP may differ from organization to organization, but what’s common is the HR’s involvement to maintain transparency and best practices. How you choose to conduct performance evaluations depends on how you want to measure your employees’ performance.

How To Create A Performance Improvement Plan

The most crucial factors in creating an employee performance improvement plan are determining clearly defined goals, performance metrics and a timeline.

One way to go about this is to create SMART or Specific, Measurable, Achievable, Relevant and Time-bound goals. Not only will this help you and your employees stay on track but also measure progress along the way.

Here’s an example of the kind of goals a decision-maker can set out for a performance improvement plan:

Ravi has been inconsistent with his deliverables. Instead of meeting his deadlines, the delays in his work have caused the organization to suffer important client accounts. However, his insight and quick thinking has helped them sail through several setbacks.

Ravi’s manager decides to implement a performance improvement plan to address his tardiness. The improvement plan clearly defines what Ravi must do to stick to his deadlines. These are:

  • Sending update emails across the team to make sure everyone’s on the same page

  • Communicating with different teams for inputs before proceeding with his own share of the work

  • Regular check-ins with his manager for the duration of the plan

  • Seeking feedback on his work after every milestone so that he can make any changes if necessary

  • Delivering high-quality work at the end of the cycle to make sure his employment is unaffected

With these careful steps, Ravi is able to improve the quality of his work. Not only does he reach out to his manager for guidance but their faith in him motivates him to perform better than ever.

A performance improvement plan may be daunting for employees, but as decision-makers, it’s your responsibility to reassure them that it’s for their own professional growth. It can make employees feel as if they’re as good as fired. However, a performance improvement action plan is a way for employees to learn from their mistakes, grow within an organization and be better performers. This also makes them more loyal toward you and your organization. Giving them enough opportunities to realize their full potential shows you’re invested in their careers just as much as they’re invested in achieving organizational objectives.

Why Your Organization Needs A Performance Improvement Plan

You may think it’s easier to hire new people than investing in employee training and development. But the reality is far from it. From advertising a job opening, conducting interviews and investing a recruiter’s time to onboarding, training new staff and providing necessary resources, the cost of hiring far surpasses the cost of training current employees.

So, why should you create a performance improvement plan? If you want to make sure your employee turnover rate remains well below 10%, you’ll benefit greatly from performance evaluations. Every employee has a learning curve, what may be missing is the opportunity to learn on the job. Giving your employees a chance to develop their skills and abilities will make them even better at their jobs.

A performance improvement plan doesn’t necessarily mean that an employee has to fear for their job safety. Use this as an opportunity to transform them into high achievers.

Here are some reasons why an employee performance improvement plan works:

  1. Boost Employee Morale

Employees can address a PIP in one of two ways, they’ll either be afraid they’ll lose their jobs or they’ll use this as an opportunity to improve their performance. This is your chance to assure them that improving their performance and working on improvement areas will help them secure their jobs. This is a great way to boost employee morale because they can reach out to you for support, guidance and mentorship on next steps.

  1. Offer Growth And Development Opportunities

There are several ways to work with an improvement plan. You can incorporate learning opportunities like online programs to help your employees achieve optimal results. Time management, communication, problem-solving, conflict resolution and collaboration are only a few of many essential workplace skills. A performance improvement action plan can include learning and development training that employees can participate in to achieve their goals.

  1. Reduce Employee Turnover Rate

Training employees is one of the surest ways to make sure they stick around. If you’re investing in them, they’ll invest in your organization. Employees must feel integral and valuable to the organization to give it their all. Taking the time to help them improve and giving them a chance to realize their full potential by overcoming challenges is one way to do it.

  1. Encourages Open Conversations And Feedback

Discussing what can be done, creating an action plan and highlighting areas of improvement gives everyone a chance to have an open and honest feedback session. It’s critical to get your point across as clearly as possible. Being as detailed as possible will help you motivate your employees to respect the performance improvement action plan and do what needs to be done.

With a professional improvement plan for employee performance, you have the chance to communicate your expectations and in turn, listen to what your employees have to say. In collaboration, you can create a sound action plan that suits both your needs. Effective planning is what’ll help you achieve your goals and train your employees to transform their performance.

Harappa’s High Performing Leaders Program

High performance reaps optimal outcomes for any organization. But when it’s your senior executives and leaders who may not be performing as well, you run the risk of losing out on critical opportunities. Harappa’s High Performing Leaders Program offers tailor-made learning solutions to suit your business needs. With 15 must-have Thrive Skills such as Smart Decision Making and Effective Communication Skills, your employees can achieve transformative outcomes. Over the course of the program, they can learn to become effective leaders and decision-makers by mastering these skills and delivering on your expectations.

Design a professional improvement plan for employee performance with learning opportunities that push and encourage your employees to be better than ever.


Explore Harappa Diaries to learn more about topics such as What Is Organizational Agility, On-The-Job Training For Employee Learning And Development, Understanding RACI Matrix, What Is An Occupation and How To Prepare For Off-The-Job Training that will help organizations tap into their employee’s potential.

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