Performance improvement plans: When to use one and how

When an employee’s performance isn’t meeting the bar, even after repeated feedback, HR usually resorts to a performance improvement plan (PIP). This approach gives the worker a fair chance to turn things around in a structured way that should be available to anyone in a similar situation. 

Making these plans work involves more than paperwork—it’s also crucial to plan the opening conversation and what to do when the strategy doesn’t work. This article covers when to use a PIP, what it must include, how to deliver it, where the legal exposure lies, and what your organization owes the employee if the plan ends in separation.

A performance improvement plan (PIP) is a formal written document that tells an employee where their work falls short, what acceptable performance looks like, and how long they have to reach that. It also sets out what support the employer will provide and what may happen if performance doesn’t improve.

The ideal PIP strategy frames the plan “as an opportunity for improving an employee’s performance, not solely as a tool to discipline,” as defined by the US Office of Personnel Management (OPM) in its guide for federal supervisors that’s also useful well beyond government.

Moreover, we should be clear on what a PIP isn’t:

• A development plan: This type of plan helps a solid performer grow into a bigger role and carries no consequences. In contrast, an employee performance improvement plan addresses a performance gap in the current role and states what happens if that gap remains. Mixing the two up confuses employees and weakens your records.
• A fix for team-level problems: If several people in the same role are struggling, the cause is more likely workload, process, tools, or management. Use a PIP for one person whose results fall short while peers in similar conditions succeed.

A PIP is the right tool when an employee’s performance is measurably below the standard for their role, informal feedback hasn’t worked, and you believe that the person can improve with clear direction and support. If no one involved believes that improvement is possible, the plan will merely be a formality, and employees will notice.

Before you start a plan, check that these conditions are in place:

• The expectations were clear: The employee knew the expected standard through a job description, goals, or documented feedback.
• Informal feedback came first: The manager has raised the issue in one-on-ones or reviews, and there’s a record of it. A PIP shouldn’t be the first time someone hears that there’s a problem.
• The gap is measurable: You can point to specific missed deadlines, error rates, quality issues, or unmet targets.
• Improvement is realistic: The goals can reasonably be met in the time available, with the resources on offer.
• You’d handle anyone else the same way: Other employees with similar performance have been, or would be, treated through the same standards.

An improvement plan isn’t a one-size-fits-all solution for every underperforming employee. Here are some cases when not to use a PIP:

• Employee misconduct: Harassment, dishonesty, and policy violations are conduct issues, handled through your disciplinary process. A formal employee warning notice is usually better.
• The decision is already made: A plan with goals designed to fail is unfair and makes for a weak record. A direct, respectful separation is more honest.
• The role is going away: If the real driver is a restructuring or budget cut, treat it as a position elimination.
• The timing raises questions: If the employee recently complained about discrimination, asked for an accommodation, or came back from protected leave, talk to counsel first. The performance issue may be real, but the timing will be scrutinized.
• The cause sits outside the employee’s control: If the role changed or promised training never happened, fix that first.

A performance improvement plan should be specific enough that an outsider, possibly an agency investigator or a judge, could understand what was expected, by when, and whether the employee met it.

Building on OPM’s guide, we’ve listed seven core elements every PIP must cover:

• Performance description: Describe what’s falling short in plain, observable terms. “Isn’t meeting client deadlines” is a good example, while “lacks commitment” is too generic.
• Critical elements: Tie the parts of the job affected by poor performance to the job description, the role’s core responsibilities, or any agreed goals.
• Deficiency examples: Provide specific dates, figures, and incidents that show the gap. “Missed three of five client deadlines in Q3” gives the employee something concrete to fix.
• Plan duration: Outline the start and end dates, plus a schedule for check-ins (more details in the next section).
• Expectations and success criteria: Explain what acceptable performance looks like, and how each goal will be measured by the end date.
• Support and assistance: Detail the training, coaching, feedback, tools, or extra manager time your organization will provide to the employee.
• Consequences for not improving: Plainly state what may happen if the goals aren’t met, up to and including termination.

Most PIPs run between 30 and 90 days. Both OPM’s guide and SHRM cite 30 days as the most typical length, but the latter also notes that 60 to 90 days is customary.

However, the right length varies case by case. A support agent’s call quality can change in weeks, while a sales rep on a quarterly cycle may need three months. In any case, a timeline too short to show improvement suggests that the plan was never meant to succeed.

In your improvement plan, make sure that you build in:

• Regular check-ins: Conduct weekly or biweekly meetings, each followed by a short written summary.
• A midpoint review: Schedule an honest review of whether the employee is on track, so that the end holds no surprises.
• The option to extend: Reserve the right to extend the plan if the employee is improving, but hasn’t fully reached the standard.

The conversation that opens a PIP shapes everything after it. An employee has a real chance to improve if they leave the meeting understanding the gap and believing that the plan is genuine. If not, they may start planning an exit that same day.

Here’s a sequence that holds up for most performance improvement plans:

1. Prepare with HR: Review the documentation, confirm that the goals are realistic, and check for timing or legal concerns before the meeting.
2. Have the direct manager deliver it: The person who manages the work should lead the conversation, with HR in the room or close at hand.
3. Meet privately, in person or on video: Never start the conversation by email, and never as an aside at the end of another meeting.
4. Be direct about the purpose: Say early on that this is a formal plan, explain the gap with examples, and make it clear that you want the employee to succeed.
5. Walk through the document together: Cover each goal, the support available, and the check-in schedule. Invite questions and write down the answers.
6. Ask for acknowledgment: Explain that signing confirms receipt. If the employee declines to sign, note that in the file, with a witness.
7. Book the first check-in before you finish: This shows that the support is real from day one.

Documentation makes a PIP fair and defensible. Throughout the performance improvement plan process, HR and the manager should:

• Write up every check-in the same day: Record progress against each goal, the support provided, and next steps, and then share the summary with the employee.
• Log the support you gave: Training dates and coaching sessions show that the organization held up its end.
• Record progress, not only shortfalls: A file that captures nothing positive reads like a case being built for termination.
• Note new issues the employee raises: Concerns about health, workload, or treatment need their own response (as covered below).

Most US employment is at-will, so you generally don’t need a PIP to end someone’s employment. But once you use one, the way you run it becomes evidence that could be used against the organization. 

These are the areas where PIPs most often create risk:

• Retaliation: The Equal Employment Opportunity Commission (EEOC) lists actions such as giving “a performance evaluation that is lower than it should be” and choosing to “increase scrutiny” as examples of retaliation when they follow protected activity, like a discrimination complaint. A PIP that starts soon after protected activity needs a documented performance history that predates it.
• Protected leave: The Department of Labor (DOL) bars employers from using an employee’s request for or use of FMLA leave “as a negative factor in employment actions, such as hiring, promotions, or disciplinary actions.” So don’t count time on protected leave against PIP goals. Many employers pause the plan during leave and restart it when the employee returns.
• Disability: If an employee discloses a disability during a PIP, the EEOC’s guidance says that you don’t have to excuse past poor performance. Still, you should begin the “interactive reasonable accommodation process” and talk about what might help going forward.
• Inconsistency: If two employees with similar results are handled differently, and they differ in a protected characteristic, that can look like disparate treatment.

There are some common questions employees ask about performance improvement plans: Does a PIP lead to termination? How serious is it? Should I quit? Managers will hear these in the room, so your organization needs to have honest answers.

It’s serious, and you should present it that way. A PIP is a formal step that puts the employee’s job at risk. Playing it down is unfair to the employee and undermines the record. Presenting it as a foregone conclusion removes any reason to try.

It can, and employees know this. No reliable national data shows how many PIPs end in separation, and outcomes vary widely by organization. What you can control is whether the outcome is genuinely open. If almost every PIP in your organization ends in an exit, the plans are working as exit paperwork, and employees will treat them that way.

That’s the employee’s decision, and managers shouldn’t steer it. What your organization does owe them is clarity: confirm that the plan is real, explain what each path looks like, and answer practical questions about how an eventual resignation would be handled.

Some employers offer a choice upfront: work the plan or negotiate an exit with severance. However, this is only humane if it’s a real choice, in writing, and with proper time to consider. Pressure to resign carries its own legal risk, so check with your counsel first.

At the plan’s end date, the manager and HR review the documented results against each goal. There are four possible outcomes:

• Success: Close the plan in writing and return to normal performance management.
• Partial progress: Extend the plan for a defined period, with updated goals.
• Role change: Sometimes the employee’s skills fit another role better, so consider redeployment to move the individual internally to a different position or team.
• Separation: If the goals weren’t met and no alternative fits, the organization moves to termination.

Follow these four steps to ensure proper preparation before meeting with the employee:

1. Confirm the decision: Have HR and counsel review the full file, from the first feedback to the final check-in.
2. Prepare final pay: Federal law doesn’t require employers to issue a final paycheck immediately, but some states do. Check the local rules in the state where the employee works.
3. Prepare benefits information: COBRA lets workers continue group health coverage for a limited period, and applies to employers with 20 or more employees. Some states have their own continuation laws for smaller employers.
4. Decide on severance: If you offer severance in exchange for a release of claims and the employee is 40 or older, the EEOC says that the release must give them at least 21 days to consider it and 7 days to revoke it after signing.

Keep the meeting short, private, and led by the manager with HR present. State the decision in the first minute, explain that it follows the PIP, and don’t reopen the debate about individual goals. Then move on to next steps: final pay, benefits, company property, and the support available.

After the meeting, follow your offboarding best practices. Close systems access, share a brief note with the team, and make sure that the employee knows who to contact with questions.

A performance improvement plan works when it’s honest about the gap, the support, and what happens if the goals aren’t met. Use one when you believe improvement is possible and realistic, have the manager deliver it directly, document every step, and plan for the exit as carefully as for the improvement.

Careerminds helps managers prepare for these conversations through leadership coaching, and supports employees through career transition with outplacement and redeployment when a role ends. Contact our experts to talk through what that could look like for your organization.