How to Handle Poor Performance through Performance Improvement Plans (PIPs)

Poor performance is one of the most difficult challenges managers face, but it’s crucial to address it early and effectively. A Performance Improvement Plan (PIP), when used correctly, offers a structured and supportive way to guide employees toward improvement. Unfortunately, many managers avoid dealing with underperformance, either because they don’t know how to address it or because they fear confrontation. However, avoiding the issue can lead to a decline in team morale, productivity, and overall business performance. This guide will walk you through a modern, empathetic approach to managing poor performance, from implementing a PIP to deciding when termination is necessary, all while avoiding common pitfalls.

Before exploring how to handle underperformance, it’s important to understand the potential fallout of not addressing poor performance. Many managers assume that the issue will resolve itself or hesitate to intervene because they don’t want to disrupt the employee’s confidence or damage their relationship. However, this inaction can lead to larger issues.

When performance issues go unaddressed, they often have a ripple effect across the team. Other employees may become frustrated that they are compensating for a colleague’s poor performance. For example, if a team member repeatedly misses deadlines or delivers subpar work, someone else must often step in to fill the gap, leading to increased workloads and stress for high-performing employees. Over time, this can lower team morale and lead to resentment. The result is often decreased productivity and potential employee turnover, as top performers may leave in frustration.

Unaddressed performance issues also risk stunting the employee’s growth. When employees aren’t held accountable for improving, they lose the opportunity to develop the necessary skills for success. What could have been a manageable problem, if dealt with early, may become a situation where the employee’s skills and confidence deteriorate over time.

Determining when to implement a PIP is a critical part of managing performance. It’s not something that should be used as a first response to an isolated issue, nor should it be delayed until the problem becomes irreparable. A PIP becomes necessary when an employee consistently underperforms despite receiving informal feedback and coaching.

For instance, consider a scenario where an employee has missed several important deadlines. If the manager has already offered feedback and discussed time management strategies but the issue persists, a more formal approach—like a PIP—might be necessary. Likewise, if an employee consistently struggles to meet quality standards, causing mistakes that impact the team’s productivity, a PIP can provide the structure needed to resolve the problem. It’s also important when behavioral issues arise, such as poor communication or difficulty collaborating with colleagues.

It’s essential to recognize patterns of underperformance rather than waiting for a major incident. If the issue is left unchecked, it may worsen, resulting in a situation where performance improves too little, too late. A PIP offers a structured opportunity to address these issues before they become insurmountable.

When designing a PIP, the most important element is setting clear, specific objectives that are directly related to the performance issues at hand. Avoid using vague language like “improve attitude” or “work harder,” as these goals are open to interpretation and difficult to measure. Instead, focus on specific tasks that need improvement and outline what success looks like.

For example, instead of telling an employee to “improve communication,” the plan should specify that the employee must provide weekly project updates in a timely, clear, and concise manner. Likewise, if the issue is time management, the plan should require the employee to meet 95% of project deadlines over the next quarter. These specific expectations ensure both the manager and the employee are on the same page about what needs to change and how success will be measured.

It’s also important to set realistic expectations. Overloading an employee with too many objectives in a short time can set them up for failure. Instead, focus on achievable goals that allow the employee to demonstrate improvement over a defined period, such as 30, 60, or 90 days.

A PIP should never be presented as a punishment. Instead, frame it as a collaborative process designed to help the employee succeed. Start by having an empathetic conversation with the employee, acknowledging their strengths and contributions while explaining the areas that need improvement.

For example, a manager might say, “You’ve done great work on our marketing campaigns, but I’ve noticed that project deadlines have been a challenge. I believe you’re capable of improving in this area, and I’d like us to work together to help you meet those deadlines more consistently.”

Once the objectives have been set, offer the necessary support and resources. If the employee needs to improve time management, for example, suggest enrolling them in a time management course or pairing them with a mentor who can guide them. Providing the right tools and resources demonstrates that the company is invested in the employee’s success and gives the employee a better chance of succeeding.

A PIP is not a one-time event but an ongoing process. Managers need to schedule regular check-ins with the employee to monitor progress and offer feedback. These check-ins allow the manager to celebrate small victories and address any lingering issues before they become more significant.

Imagine an employee struggling with meeting deadlines. In the weekly check-ins, the manager could acknowledge where the employee has made improvements, such as completing smaller tasks on time, while still discussing larger deadlines that were missed. This continuous feedback ensures the employee stays on track and allows the manager to make adjustments to the plan if necessary.

Incorporating continuous feedback into the process also helps employees feel supported rather than punished. They receive real-time feedback on their progress and can make adjustments immediately, rather than waiting until the end of the PIP to find out how they’ve done.

While the goal of a PIP is to help an employee improve, there are situations where termination may be the necessary next step. It’s important to recognize when an employee is not making the necessary progress or is disengaged from the process altogether.

For example, if an employee shows little improvement despite receiving continuous feedback and support, or if they demonstrate no engagement with the PIP, it may be time to consider termination. In these cases, the manager should evaluate whether the employee is meeting any of the outlined objectives and whether there is any sign of sustained improvement.

Termination should also be considered if the employee’s performance is having a significant negative impact on the business—for example, if the employee is responsible for critical errors that affect the company’s clients or if their underperformance is demoralizing the rest of the team.

That said, termination should never come as a surprise to the employee. A well-structured PIP outlines the consequences of failing to meet the objectives, and the employee should be aware that termination is a possible outcome if the necessary improvements aren’t made.

There are several pitfalls managers often fall into when implementing a PIP. One common mistake is setting goals that are too vague or unrealistic. Vague goals like “improve work ethic” are subjective and difficult to measure, leaving both the manager and the employee frustrated. Instead, goals should be concrete, such as “complete 90% of tasks by their assigned deadlines.”

Another pitfall is failing to follow through. Some managers may create a PIP but then neglect to hold regular check-ins or offer the promised support. This can leave the employee feeling abandoned and unclear about their progress, ultimately undermining the purpose of the PIP. Managers should remain actively engaged throughout the process, offering guidance and support at every step.

It’s also critical not to treat a PIP as a punishment. If the employee feels the PIP is simply a precursor to termination, they may become defensive and disengaged. Managers need to frame the PIP as a tool for growth, offering resources and encouragement to help the employee improve.

Handling poor performance is one of the most important responsibilities of any manager. A well-implemented Performance Improvement Plan (PIP) provides structure and support to guide employees toward improvement, allowing them to remain valuable contributors to the organization. By addressing underperformance early, setting clear and specific objectives, providing the necessary support, and offering continuous feedback, managers can turn poor performance into an opportunity for growth.

However, it’s essential to remain transparent about the consequences of failing to meet PIP goals. When necessary, managers must be prepared to take the next step, whether that’s termination or reassignment. Always consult with an attorney to ensure that your process complies with legal requirements and protects both you and the employee.

In the end, a PIP is about accountability and support—holding employees accountable for their performance while giving them the tools and guidance they need to succeed.