A Performance Improvement Plan (PIP) is a formal management tool used when an employee's performance falls below the required standard. It sets out clear expectations, measurable targets, and a defined timeframe for improvement. Used correctly, a PIP can turn around underperformance. Used incorrectly, it can expose your business to unfair dismissal claims.
When to Use a PIP
- After informal conversations have failed to improve performance
- When there's a capability issue (can't do the job) rather than a conduct issue (won't do the job)
- Before considering dismissal for poor performance
- After a probation review identifies concerns
What a PIP Should Include
- Specific performance gaps — exactly where performance falls short, with evidence
- Expected standards — what "good" looks like, with measurable targets
- Support offered — training, mentoring, adjusted workload, regular check-ins
- Review dates — typically weekly or fortnightly during the PIP period
- Timeframe — usually 4-12 weeks depending on the role and issues
- Consequences — what happens if improvement isn't achieved (e.g., formal capability hearing)
Legal Considerations
A PIP is not a legal requirement, but it's an essential part of a fair process. If you later need to dismiss for poor performance, a tribunal will want to see that you:
- Clearly communicated the expected standards
- Gave the employee a reasonable opportunity to improve
- Provided appropriate support
- Followed a fair procedure (aligned with the ACAS Code of Practice)
Our performance management service includes PIP templates and guidance through the entire process. Talk to our team.