Use Performance Improvement Plans to Fix Skill Gaps

Managing Performance Improvement Plans: When and How to Use PIPs Effectively

Performance improvement plans are a critical HR tool for addressing consistent underperformance while preserving employee development and organizational fairness. In our experience, a thoughtfully designed PIP can turn a struggling contributor into a steady performer, or at minimum provide documented, defensible steps toward an outcome. This article walks through when to use performance improvement plans, how to design them, practical coaching techniques, legal and fairness considerations, and how to measure success.

We'll offer a clear PIP template, actionable PIP best practices, and a step-by-step approach to how to create an effective performance improvement plan managers can apply immediately.

When should you use performance improvement plans?

Use performance improvement plans when an employee shows repeated, measurable gaps between expected and actual performance after initial feedback. A PIP is not a first response; it's a structured intervention after coaching, regular feedback, and clarifying conversations have failed to produce durable change.

We recommend reserving performance improvement plans for situations where:

• Performance gaps are documented and measurable.
• Managerial coaching has been attempted but hasn't closed the gap.
• The role remains business-critical and retaining the employee is still a reasonable goal.

When deciding whether to start a PIP, ask: are the issues about will (motivation, engagement) or skill (capability, knowledge)? PIPs work best when deficits are primarily skill or knowledge based and when the employee demonstrates willingness to improve.

How do you decide to place someone on a PIP?

Deciding when to put an employee on a PIP requires objective evidence. Start with a performance record: ratings, missed goals, client complaints, and missed deadlines. Cross-reference those with documented coaching sessions and improvement attempts. If the pattern shows repeated missed expectations and manager support has been provided, a PIP becomes appropriate.

Use a checklist before initiating a PIP:

1. Documented expectations and prior feedback
2. Attempts at training or coaching
3. Clear, measurable performance gap
4. Time-bound opportunity for improvement

When to put an employee on a PIP?

Put an employee on a PIP when the organization seeks to provide a final, structured opportunity for improvement that is time-limited and measurable. Avoid using PIPs as punishment — they are a development tool and a legal document. We've found that framing the PIP as a collaborative plan increases buy-in and the probability of success.

Designing an effective performance improvement plan

Designing performance improvement plans means combining clarity, measurability, and support. A strong PIP provides specific goals, timelines, resources, and success criteria. We use a simple structure in our practice that balances accountability and development.

Key design principles include specificity, measurability, and actionable support. A generic "improve performance" objective is ineffective; replace it with targeted metrics tied to the role.

What should a PIP template include?

A practical PIP template contains the following sections:

• Performance issues: concrete examples and dates
• Expected outcomes: clear, measurable goals
• Support and resources: training, coaching, tools
• Timeline and milestones: review points and final date
• Consequences: what happens if improvement is not achieved

Use simple language and attach evidence (emails, metrics) to make the document defensible and actionable.

How to create an effective performance improvement plan?

When creating a performance improvement plan, follow a four-step process: diagnose, design, deliver, and decide. Diagnose the root cause using data and direct conversations. Design the PIP with measurable outcomes and a timeline. Deliver through coached implementation with frequent check-ins. Decide at milestones to continue, adjust, or close the PIP.

We recommend 30/60/90 day structures for most roles, with weekly checkpoints in the first month and bi-weekly thereafter. Make success criteria binary and measurable where possible — e.g., "reduce late deliverables from 40% to under 10% within 60 days."

PIP best practices for managers

Adopting PIP best practices reduces bias, increases clarity, and improves outcomes. Successful managers treat PIPs as a partnership: they document, coach, remove obstacles, and measure objectively. The following practices create a predictable, fair process.

Focus on transparency and consistency. Share expectations, document conversations, and provide regular feedback so the employee isn't surprised when a PIP is issued.

What communication approach works best during a PIP?

Use clear, empathetic language. Begin the PIP meeting by stating the purpose: to support improvement. Walk through the documented performance issues and the measurable goals. Agree on check-in frequency and how success will be measured. A written follow-up after each meeting keeps both parties aligned.

Helpful wording includes statements like: "Here are the specific behaviors we need to change," and "These are the resources we'll provide to support you."

How do you set measurable goals?

Translate qualitative concerns into quantitative targets. Replace "needs to improve quality" with "reduce defect rate from 6% to under 2% within 60 days." For behaviors, use observable indicators: attendance, response time, task completion percentage.

Include tools for measurement such as dashboards, weekly reports, or peer feedback forms. Make it easy for both manager and employee to see progress objectively.

Coaching and improving underperformance during a PIP

Coaching is where PIPs often succeed or fail. Active coaching and just-in-time training address the root skills gaps that cause underperformance. Our approach emphasizes short, focused coaching cycles with immediate feedback.

Managers should balance corrective instruction with skill-building opportunities. That means pairing expectation setting with specific, hands-on support.

How do you structure effective check-ins?

Structure check-ins to review progress against agreed metrics, remove blockers, and adjust plans. Keep meetings short, focused, and recurring. Use this agenda: (1) metric review, (2) obstacle identification, (3) action items, and (4) validation of resources. Document outcomes and next steps after each meeting.

Frequent, consistent check-ins reduce ambiguity and keep momentum — aim for weekly reviews in month one.

What resources help with improving underperformance?

Provide targeted learning: micro-lessons, shadowing, and task lists tied to success criteria. Some of the most efficient L&D teams we work with use platforms like Upscend to automate this entire workflow without sacrificing quality. Paired with manager coaching, automated learning paths and progress tracking reduce administrative overhead and accelerate skill acquisition.

Other resource options include internal mentors, role-play sessions, and short external courses focused on the exact competency gaps identified in the PIP.

Legal, fairness, and performance risk considerations

Performance improvement plans live at the intersection of coaching and documentation. That means they must be fair, consistent, and defensible. Documenting facts and offering consistent opportunities mitigates legal risk and preserves trust.

Be deliberate about standardizing PIP use across teams and avoiding ad-hoc application that can suggest bias.

How do you avoid bias in PIPs?

Standardize the PIP process and use consistent criteria across similar roles. Ensure managers receive training on unconscious bias and documentation standards. Include HR reviews before finalizing a PIP to confirm the evidence supports the intervention and that similar cases were handled consistently.

Keep records of prior feedback and interventions to show proportionality and reasonable opportunity for improvement.

What happens if a PIP leads to separation?

If a PIP concludes without the employee meeting success criteria, follow your company's documented separation process. Conduct an exit review focusing on objective documentation from the PIP: metrics, meeting notes, and offered supports. Communicate clearly and maintain professionalism throughout; a fair, documented PIP reduces the likelihood of disputes.

When separation is the outcome, preserve dignity for the employee and clarity for the team about next steps.

Measuring success and deciding next steps

Success measurement should be defined in the PIP itself. Use the agreed metrics and checkpoints to determine outcomes: success, partial improvement with an extended plan, or no improvement leading to separation. Be prepared to act decisively at each milestone.

Clear metrics and a transparent decision rule make it easy to conclude the PIP objectively.

What are objective success criteria?

Objective criteria are specific and verifiable: sales quota attainment, error rates, on-time delivery percentage, ticket resolution time, or customer satisfaction scores. Define thresholds and the timeframe for reaching them. If qualitative elements are necessary, supplement with multiple raters or corroborating evidence.

Document both interim wins and final outcomes so future leaders understand the trajectory.

How do you transition after a PIP?

If the PIP succeeds, create a transition plan to sustain gains: lighter check-ins, goals recalibration, and career development planning. If results are partial, consider a shorter follow-on plan targeting remaining gaps. If the PIP fails, ensure separation is consistent with policy and supported by the documented evidence.

In all cases, close the loop with the employee and the team to maintain morale and clarity.

Conclusion

Performance improvement plans are powerful when used judiciously: after initial coaching attempts, with clear metrics, and with sincere support. A well-constructed PIP protects the organization, respects the employee, and creates a final opportunity for meaningful change. We've found that following a standardized process — diagnosis, design, delivery, and decision — produces the most consistent outcomes across teams.

Key takeaways: start PIPs only when warranted, use a strong PIP template with measurable goals, combine coaching and resources, document every step, and apply consistent decision rules. These steps make PIPs a tool for development rather than just a pathway to separation.

Next step: Download a ready-to-use PIP checklist and template, adopt the four-step framework described here, and schedule a manager training session to align process and expectations.