What is Performance Improvement Plan (PIP)?

A Performance Improvement Plan (PIP) is a structured document used when an employee's performance falls significantly below expectations despite prior coaching and feedback. It formally identifies the specific areas of underperformance, sets clear and measurable targets for improvement, outlines the support and resources the organization will provide, and establishes a defined timeline — typically 30, 60, or 90 days — within which improvement must be demonstrated.

A well-constructed PIP serves as both a development tool and a documentation record. On the development side, it gives the employee clarity on exactly what needs to change, removes ambiguity about expectations, and ensures they receive adequate support such as additional training, adjusted workload, or more frequent check-ins. On the documentation side, it creates a fair and transparent record that protects both the employee and the organization.

The perception of PIPs varies widely. In some organizations, a PIP is viewed as a genuine attempt to help an employee succeed, and many employees do improve and return to good standing. In others, PIPs carry a stigma as a precursor to termination. The difference often comes down to execution: PIPs that are collaborative, specific, and supported by real coaching succeed more often than those that are punitive, vague, or administered as a formality. Organizations should ensure PIPs are reserved for genuine performance gaps (not personality conflicts) and are applied consistently across the workforce.

PIPs provide a fair, structured process for addressing underperformance — protecting employees from arbitrary decisions and protecting organizations from legal risk. When used effectively, they salvage valuable talent by providing the clarity and support that informal feedback may have lacked. For HR teams, having a consistent PIP process demonstrates organizational fairness and helps maintain team morale by ensuring accountability standards apply to everyone.