It’s hard to prepare leaders for the inevitable challenges they will face with their employees. But if you want to be an entrepreneur, not a solopreneur, some things are just par for the course: You’ll have exemplary employees, you’ll have people who don’t work out, and sometimes, you’ll have something in between—an employee who is struggling or giving a subpar performance, but could potentially improve or get back on track. And that is when a Performance Improvement Plan can come into play.

The Benefits of a Good Performance Improvement Plan

Some people see PIPs as a way to simply document a future termination, but that never sat well with me. I see initiating a PIP as an opportunity for introspection—not just for the employee but also for our leadership team—a gentle reminder that the employee-employer relationship is not set in stone.

Sometimes, your good and even great employees can slip and lose sight of their purpose and value. Perhaps other aspects of their lives are taking time and attention away from their work responsibilities, and you need to help them get back on track.

While a PIP might seem punitive, when done really well, the process can foster deeper connections and also reinforce your culture. PIPs provide personalized guidance, bridging gaps that might seem insurmountable.

In fact, the process of creating and implementing a PIP can yield profound rewards for both managers and employees. If PIPs are executed effectively, remarkable transformations can occur. Some of the people whom I have put on PIPs because they lost their way momentarily went on to do great work for me. Some even moved on to become executives at future companies!

Elements of a PIP

PIPs should be an extension of a performance review; no need to reinvent the wheel if you already have a general employee review form! The difference between a review and a PIP is that there’s a very specific window of time during which an employee must show improvement—generally four weeks. At the end of each week, you need to review what they did that week to rectify the specific issue.

PIPs are blueprints for empowerment and accountability. Here are some key considerations when developing a PIP:

• Focus on accountability as you develop the PIP rather than presenting a laundry list of mistakes. Pairing failed tasks with narratives of the impact helps foster a deeper understanding of expectations and successful outcomes.
• Approach the process with a growth mindset, seeking ways to improve your leadership skills.
• Be clear and concise in the PIP and your conversations with your employee. Glossing over or being vague will only confuse the employee.
• Celebrate successes and address setbacks openly through the PIP; the best managers show they care and want to support.
• Understand that most individuals seek purpose, and a PIP can help them learn specifics around their accountability.
• Keep emotions in check; this is just business, not personal.

Knowing When to Cut the Cord

In my view, we owe it to our employees to invest just as much in their success from the time we hire them until their last day. I see a really good PIP as an opportunity for the employee to reaffirm their commitment to your organization—or not. I’ve had individuals midway through a thirty-day PIP decide our environment was too challenging and quit. I respected their choice and acknowledged that our standards are indeed rigorous. Again, self-selecting out is never a bad thing. Don’t hold on to someone who isn’t in lockstep with you or your organization.

If you know very well that there is no chance you’ll keep someone after they complete their thirty-day PIP, give them a thirty-day severance instead and let them go. And if you know an employee is not a fit before you do a PIP, it’s better to terminate immediately than to offer false hope.

So, what do you do when you need to cut the cord? That’s the topic of our next blog!