How to Create an Employee Performance Improvement Plan

Key Takeaways

• An employee performance improvement plan (PIP) is a structured document that outlines specific performance gaps, measurable goals and a timeline for improvement.
• Early identification of underperformance, combined with empathetic root-cause analysis, sets the foundation for a successful PIP.
• A well-written PIP includes clear expectations, defined support resources, regular check-ins and documented consequences if goals are not met.
• Pryor Learning offers live and On-Demand training courses that help managers build the skills to coach employees through performance challenges.

An employee performance improvement plan (PIP) is one of the most effective tools a manager or HR professional can use to address persistent underperformance in a structured, supportive way. Rather than jumping straight to disciplinary action, a PIP gives employees a clear roadmap for getting back on track, with defined goals, timelines and resources to help them succeed. Even if an employee is a positive asset of the organization with a good attitude, you might have to talk to them about the quality or quantity of their work. This guide walks you through how to recognize underperformance, write a performance improvement plan step by step, manage an employee through the process and know when to escalate. Whether you are looking to motivate underperforming employees or formalize a coaching process that has stalled, the framework below will help you act with confidence and empathy.

What Is an Employee Performance Improvement Plan?

An employee performance improvement plan is a formal, written document created collaboratively by a manager (often with HR support) that addresses specific performance deficiencies and lays out a path for the employee to meet expectations within a defined timeframe. Unlike informal coaching conversations, a PIP creates a documented record that protects both the employee and the organization.

A PIP is not intended as a punishment. When used correctly, it signals that the organization values the employee enough to invest time and structure in helping them improve. PIPs are used across industries and organization sizes, from small businesses to large enterprises, whenever an employee's performance has fallen below acceptable standards despite prior feedback.

Key characteristics of a performance improvement plan include:

• A formal, written document signed by both the manager and the employee
• A defined timeframe, typically 30, 60 or 90 days
• Specific, measurable goals tied to the employee's role and responsibilities
• Clearly outlined support and resources the organization will provide
• Transparent consequences if goals are not met by the end of the plan

When to Use a PIP vs. Other Approaches

Not every performance issue calls for a formal PIP. Understanding when to use one helps managers respond proportionally and avoid over-escalating minor issues.

• Informal coaching is appropriate for minor or first-time performance issues. A quick conversation, additional guidance or a brief follow-up is often enough to correct course.
• A performance improvement plan is the right tool when informal coaching has already been attempted and the employee's performance has not improved. PIPs are best suited for persistent gaps in work quality, productivity or behavior that are clearly tied to job expectations.
• Formal disciplinary action (written warnings, suspension or termination) is reserved for policy violations, misconduct or situations where a PIP has already been completed without success.

If you are unsure whether a PIP is warranted, consult with your HR team. They can help you assess the situation and determine the most appropriate next step.

Common Causes of Employee Underperformance

Before drafting a performance improvement plan, take time to understand why the employee is struggling. Jumping to conclusions or skipping this step often leads to plans that address symptoms rather than root causes. The most common drivers of underperformance include:

• Unclear expectations: The employee may not fully understand what success looks like in their role. Vague job descriptions, shifting priorities or inconsistent feedback from leadership can all contribute.
• Skill gaps: The employee may lack the technical or soft skills needed to perform at the expected level. This is especially common after role changes, promotions or shifts in technology.
• Personal issues: Challenges outside of work, such as health concerns, family responsibilities or financial stress, can significantly affect focus and productivity.
• Poor management or lack of feedback: Employees who receive little direction, infrequent check-ins or no constructive feedback may not realize they are falling short until the gap becomes significant.
• Role misalignment: Sometimes the employee's strengths and interests do not match the demands of their current position. A role change or adjusted responsibilities may be more effective than a PIP in these cases.
• Burnout: Chronic overwork, lack of recognition or sustained high-pressure environments can erode motivation and output over time.
• Lack of resources or tools: Employees cannot perform well if they do not have access to the systems, training or support they need to do their jobs effectively.

Identifying the root cause helps you design a PIP that targets the actual problem, which dramatically increases the likelihood of a successful outcome.

Signs of an Underperforming Employee

Recognizing underperformance in the workplace involves observing behavioral and productivity patterns over time. Once the signs of underperformance are identified, it's essential to address the issue through open communication, support, and clear action plans to help the employee improve. Early intervention helps the employee and helps maintain overall team productivity and morale. When these signs persist despite informal coaching, it may be time to initiate a performance improvement plan. Here are key signs of bad performance in the workplace.

• Missed deadlines and inconsistent results: One visible indicator of poor performance is consistently missing deadlines. When an employee regularly fails to meet project deadlines or submits incomplete work, it suggests time management or efficiency problems. This can also show up in inconsistent results - some tasks may be completed adequately, while others fall short of expectations. While occasional delays are understandable, a pattern of missed deadlines signals an ongoing problem.
• Declining quality of work: A noticeable decline in the quality of work is another sign of underperformance. For example, if an employee's deliverables consistently contain errors, lack attention to detail, or fail to meet previously established standards, this indicates a problem. Declining quality often stems from disengagement, burnout, or lack of necessary skills. It's important to address this early, as poor-quality work can negatively impact team performance and customer satisfaction.
• Lack of initiative: Employees who were once proactive but now show a lack of initiative may be struggling with performance issues. Underperforming staff tend to avoid taking on new tasks, hesitate to suggest ideas, or appear to lack enthusiasm for the work. If an employee seems to be doing the bare minimum, it could indicate disengagement or a lack of motivation. A decline in initiative can hinder innovation and slow down team progress, especially in roles that require creativity or problem-solving.
• Poor collaboration and communication: Effective collaboration and communication are key to workplace success. When an employee becomes less communicative, avoids team interactions, or fails to contribute to meetings, it may signal they are struggling. Ineffective communication naturally leads to misunderstandings and missed opportunities, which can increase performance issues. If team members start complaining about having to "pick up the slack" or there's friction in collaboration, it's a red flag that bad performance may be at play.
• Frequent absenteeism or tardiness: Frequent absenteeism, lateness, or long periods of unavailability during work hours can indicate underlying performance problems. While occasional absences are normal, repeated patterns of absence or tardiness often reflect a lack of engagement, personal issues, or dissatisfaction with the role. This can also have a ripple effect, burdening other team members who cover for the missing employee, and reducing overall productivity.
• Resistance to feedback or training: Employees who are underperforming often resist feedback or do not take action when constructive criticism is given. The reaction may be defensiveness, dismissiveness, or indifference - all coping reactions that you will need to help them move past. Additionally, if you provide an employee with training or upskilling opportunities but they show no progress or interest in learning, this can be a clear sign of disengagement or a lack of adaptability to the demands of the role.
• Low engagement and negative attitude: Low engagement is a common characteristic of underperforming employees. A negative or indifferent attitude toward tasks, co-workers, or the organization as a whole is a sign to consider. This often shows a lack of enthusiasm, decreased participation in meetings, or minimal contribution to team goals. Employees with poor attitudes may also complain often or resist organizational changes, further impacting their productivity and team morale. 

How to Write a Performance Improvement Plan Step by Step

Once you have identified the root cause and confirmed that a PIP is the right approach, the next step is building the plan itself. A well-structured performance improvement plan gives the employee a clear understanding of what needs to change, how success will be measured and what support they can expect along the way. Follow these steps to create a PIP that is fair, actionable and effective.

Step 1 - Identify and Document the Performance Gap

Start by gathering specific, objective evidence of the performance issue. Review work output, missed deadlines, quality metrics, peer feedback and any prior coaching conversations. Avoid generalizations like "attitude problems" and instead focus on observable behaviors and measurable outcomes. For example, "Three of the last five client reports were submitted after the deadline and contained data errors" is far more useful than "Work has been sloppy lately."

Reference the signs you identified earlier and document everything in writing. This documentation forms the foundation of the PIP and will be critical if the situation escalates later.

Step 2 - Set Measurable Goals and a Timeline

Define specific employee performance goals that address the identified gaps. Each goal should be measurable, realistic and directly tied to the employee's job responsibilities. Avoid vague objectives like "improve communication" and instead write something like "Respond to all internal requests within one business day and provide weekly status updates to the project lead."

Set a clear timeline for the PIP. Most plans run 30, 60 or 90 days depending on the severity and complexity of the issues. A 30-day plan works well for straightforward performance gaps, while a 90-day plan may be appropriate for skill development that requires training or practice. Define what success looks like at the end of the timeline so there is no ambiguity.

Step 3 - Define Support, Resources and Check-In Cadence

A PIP should never be a one-sided demand. Outline the specific support the organization will provide to help the employee succeed. This might include additional training, mentoring from a senior colleague, adjusted workload during the improvement period or referrals to employee assistance programs (EAPs) for personal challenges. 

Establish a regular check-in cadence, typically weekly or biweekly, where the manager and employee review progress, discuss obstacles and adjust the plan if needed. These meetings keep the process collaborative and prevent surprises at the end of the timeline. Pryor Learning offers targeted courses such as Set Employee Goals and Define Performance Expectations that can serve as a practical resource during this phase.

Step 4 - Outline Consequences and Next Steps

Be transparent about what happens at the end of the PIP. If the employee meets their goals, the PIP closes and the employee returns to standard performance management. Acknowledge the achievement and recognize the effort it took to improve.

If the employee does not meet the goals, outline the possible next steps: an extended PIP with revised goals, reassignment to a role that better fits their skills or termination. Clarity here is essential. The employee should never be surprised by the outcome because the consequences were communicated from the start.

What to Include in a Performance Improvement Plan

The table below summarizes the key components every performance improvement plan should contain. Use it as a performance improvement plan template to ensure your document is thorough and consistent.

How to Manage an Employee Through a Performance Improvement Plan

Managing underperforming employees through a PIP requires a combination of empathy, clear communication and accountability. The way you conduct the process has a direct impact on whether the employee succeeds. Here are practical tips for managing an employee through a performance improvement plan.

Exercise empathy and identify the root cause: Before jumping to conclusions or taking action, try to understand why an employee is underperforming. Common causes include lack of skills, unclear expectations, personal issues, or disengagement. Take time to analyze their work patterns, talk to them, and gather feedback from colleagues to pinpoint the underlying problem. Is the employee struggling with a specific aspect of their job, or is their workload overwhelming? Understanding the root cause helps you pick the best path forward, in a way that has the best chance of succeeding.

Conduct the initial PIP meeting with care: The first conversation about a PIP is one of the toughest conversations a supervisor faces, and it sets the tone for the entire process. Choose a private setting, allow enough time for a thorough discussion and approach the meeting as a collaborative problem-solving session rather than a disciplinary hearing. Explain the purpose of the PIP, walk through each section of the document and give the employee time to ask questions and share their perspective. Be prepared for emotional reactions, including frustration, anxiety or defensiveness. Acknowledge those feelings without backing away from the plan. Courses like Communicating with Tact and Professionalism can help managers navigate these difficult conversations effectively.

Provide clear, constructive feedback: One effective way to address underperformance is through clear and direct feedback. Explain specific areas where the employee is falling short, using concrete examples. Avoid being overly critical or vague—constructive feedback should focus on behaviors and outcomes, not personality. For instance, instead of saying, "You're not working hard enough," say, "I noticed that three of your project deadlines were missed this month. Let's discuss why this happened and how we can prevent it moving forward." Be sure to highlight any strengths or previous successes to encourage the employee.

Set clear expectations and goals: Often, underperformance stems from a lack of clarity about what's expected. During a feedback session, ensure that the employee understands the performance standards they need to meet. Set specific and clear goals that are aligned with their job responsibilities. For example, if an employee is struggling with time management, you might set a goal of completing specific tasks by designated deadlines over the next month. Clear goals provide a benchmark to measure progress and give the employee a sense of direction.

Offer support and resources: Once you've identified the problem and set expectations, provide the necessary support to help the employee succeed. This could include additional training, mentoring, or adjusting their workload if it's overwhelming. If personal issues affect performance, consider offering flexibility or referring them to employee assistance programs (EAPs). Sometimes, underperforming employees lack the tools or resources needed to perform their jobs effectively, so offering these can remove barriers to success.

Document every check-in: Keep written records of each progress meeting, including what was discussed, any adjustments made to the plan and the employee's response. These notes create a clear paper trail that demonstrates the organization acted in good faith and gave the employee every reasonable opportunity to improve.

Adjust the plan if circumstances change: A PIP is not set in stone. If new information comes to light, if the employee's role shifts or if external factors affect the timeline, be willing to revise the plan. Flexibility shows the employee that the process is genuinely about improvement, not about building a case for termination.

Provide ongoing feedback and recognition: Improving performance doesn't happen overnight, so it's crucial to provide ongoing feedback. Schedule regular check-ins to discuss progress, address any new issues, and offer guidance. Be sure to acknowledge any improvements, even small ones. Positive reinforcement can go a long way in motivating an employee to continue putting in the effort to improve.

Documentation and Legal Considerations

Thorough documentation is one of the most important aspects of the PIP process. Written records protect the organization if the situation escalates to termination or if the employee files a complaint. They also demonstrate fairness and consistency, which matters for team trust and organizational culture.

Keep written records of all PIP-related meetings, including the initial conversation, every check-in and the final review. Note the date, attendees, topics discussed, employee responses and any agreed-upon adjustments. Store these records in the employee's personnel file.

Before initiating a PIP, consult with your HR department or legal counsel, especially if the employee is in a protected class or has requested workplace accommodations. A PIP should never be used as a pretext for discrimination or retaliation. When the process is handled transparently and documented thoroughly, it protects everyone involved.

When a PIP Is Not Working - Escalation and Next Steps

Unfortunately, not every case of underperformance can be resolved, even with support and clear expectations. If the employee doesn't improve after multiple attempts to help, you may need to escalate the situation.

Escalation options include:

• Extending the PIP timeline with revised or adjusted goals if the employee has shown partial progress and additional time could make a difference
• Reassigning the employee to a different role that better aligns with their strengths, particularly if root-cause analysis revealed a role misalignment
• Issuing a formal written warning that becomes part of the employee's permanent record
• Proceeding with termination as a last resort when all other options have been exhausted

It is important to remember that not all PIPs end in termination. Many employees successfully complete their improvement plans and go on to perform well when given clear goals and adequate support. A well-documented PIP protects both the employee and the organization during escalation, regardless of the outcome. This is often a last resort, but it's needed to be fair to the team and maintain organizational performance.

Managing underperforming staff requires a combination of empathy, clear communication, and accountability. It's also important to monitor progress and take further action if necessary to ensure that the team remains productive and aligned with organizational goals.

Tips for Working Alongside an Underperforming Colleague

Most of the time, we talk about how managers should work with poor performers, but bad performance impacts peers too. Below are ways to handle the situation if you find yourself working side-by-side with an underperformer.

• Communicate clearly: Make clear what you will handle and what you assume the other person is doing that relates to your work. Help clarify goals in ways that make boundaries clear.
• Lead by example: Demonstrate your own work ethic and quality, and don't sink to the other person's level or condone their behavior through expressions of sympathy or alignment.
• Offer support: Assess whether they need help or resources to improve, such as training or mentoring. Offer references to other resources and encourage them to seek help from a supervisor.
• Don't cover for them: Avoid covering for their mistakes to prevent enabling poor performance.
• Collaborate strategically: Delegate tasks that align with their strengths, reducing the risk of failure. Note what you are doing and why to support any discussions with your supervisor about what you are doing.
• Stay professional: Avoid gossip or expressing your frustration with others. Focus on problem-solving.
• Escalate when necessary: If their performance impacts team goals, diplomatically escalate the issue to management or HR. Objectively share what you observe and the impact on the team.

Build Your Performance Management Skills with Pryor Learning

Managing poor performers is an important part of managing others, and it is a skill that improves with practice and the right training. Pryor Learning offers both live and On-Demand training courses that help managers build confidence in every stage of performance management, from setting expectations and delivering feedback to navigating difficult conversations and implementing a performance improvement plan. Pryor's online and In-Person training courses on Management and Leadership can help you develop these skills described above. Here are some good examples:

• Dealing with Employee Discipline & Performance Problems
• Set Employee Goals and Define Performance Expectations
• How to Conduct Employee Performance Evaluations
• Performance Gap Series
• Communicating with Tact and Professionalism
• Leadership, Team-Building and Coaching Skills for Managers and Supervisors

For organizations that need ongoing access to performance management training across their teams, PryorPlus provides unlimited learning opportunities that scale with your workforce.