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.