What is a performance improvement plan and how to create one

Nobody is perfect, and sometimes, your hourly employees may fall short of the expectations you have for them. They could be missing their performance targets, display unsatisfactory behavior or have poor relationships with their teammates. If that happens, you may need to bring a performance improvement plan into the equation.

Having a performance improvement plan can guide your employee back on track. But what exactly is a performance improvement plan, and how should you go about it? 

Here are some tips on how to create a performance improvement plan and how to follow through with it in a way that’s healthy and beneficial for all parties involved.

What exactly is a performance improvement plan?

When your employee is underperforming, it could result in frustration, unhappiness and discord between team members. These are some negative effects that could escalate in the long run, effectively lowering morale and productivity. 

Having a performance review gives them a second chance to correct their mistakes, and for you to rediscover their potential. This review brings up their missteps, provides them with a second chance to improve their performance and lays out your expectations. (It also saves you from the difficult decision of letting the employee and the hassle and additional costs of hiring and re-training another one.)

Ultimately, it's the best way to provide positive encouragement to employees, highlighting areas where they can improve, so that they can develop new skills and have goals to work towards to get better at their job. 

How to create a performance improvement plan?

There are several key components to a meaningful performance improvement plan. Here’s how to design yours.

1. Set clear goals 

This is where you list the expectations and goals that your employee should work towards. This should be specific and clear so both you and your employee are on the same page. Goals should be attainable and incremental so the employee can reasonably reach milestones to demonstrate their commitment and realigned focus. (Plus, it helps them gain momentum and keeps them excited about their job.)

When you set goals, remember to include a timeline, with a specific start and finish date and checkpoints (if applicable). This helps add structure to the goals, and keeps expectations aligned for both parties. 

2. Foster two-way conversations 

Set up a meeting and have a conversation with the underperforming employee. This meeting will create a space for you to find the root cause(s) behind why the employee isn’t reaching their current goals. Perhaps they're facing a situation at home, or they’re having difficulties adapting to their role. 

By understanding and looking at their performance with this additional context in mind, you can be more empathetic of their situation and potentially discover new ways to help the employee get back on track. For example, if your employee is underperforming because they’re having difficulties adapting to their role, you may consider assigning them a mentor that they can turn to for guidance rather than letting them suffer in silence.

Ask them about what they think about their job and the new goals that are set. Ultimately, this should be a conversation between both parties, rather than them following the goals you've set. This will help manage expectations on both sides, especially if the hourly employee is overwhelmed by their workload. 

And lastly, give them an opportunity to give feedback or state their opinion. This is a critical piece of finding true alignment and will be extremely useful in setting up the performance improvement plan more effectively. 

3. Provide guidance and positivity

Be sure to talk with your employee about what they've done well, too. This is important. While they may have underperformed in a certain area, they may have also excelled in other aspects of their job. Bringing this up will help them feel valued and motivate them to do better. 

As a leader, it’s your responsibility to provide your employee with all the necessary resources they’ll need to reach their goals. Be mindful of those needs and provide them in a timely manner. 

4. Set up a check-in schedule 

Consistency is key, and what better way to do it than through routine meetings to discuss progress? Set up weekly or monthly check-in to see how your employee is doing. Use this time to see if they’re getting closer to being on track or if they’re facing any roadblocks you can help them overcome.

5. State the consequences

Your hourly employee needs to be aware that continued underperformance will yield consequences—and let them know exactly what those consequences are. List them clearly in your plan, but keep the focus and emphasis on improvement, not punishment. If you don’t, your employee may read this as a sign that they may be let go when your real intention is to help them become better in their role.

Remember, welcome open conversation during these moments. Your employees should feel comfortable enough to bring up any concerns they have along the way. 

6. Create the actual performance improvement plan

Now that you know these elements, it’s time to begin writing. Unsure of how to go about it? We've created a performance improvement plan template to make things easier for you! 

For a detailed example of the content you can include in the performance improvement plan, refer to our template here. 

How to sustain your performance improvement plan?

Now that you've put the performance improvement plan in place, how do you ensure that your hourly employee adheres to it and that their progress is on track? This is where the regular check-ins with your employee come into play. Again, these meetings can range from weekly to monthly sessions to follow up on their goals and determine if they're on the right track—whatever will set the employee up for success. 

These check-ins can also be coupled with extra support or training to help the employee bridge the gap between the skills they have and the skills they need. Training may take shape in a variety of forms—including video courses or job shadowing. 

Review the performance improvement plan from time to time to ensure that everything is on track. If the employee is showing drastic improvements, it may be a signal that the goals can be tweaked to a more advanced level. Likewise, if they seem to be struggling with the objectives set previously, consider reducing the criteria. This is where you can ask questions, and determine the effectiveness of the performance improvement plan. Did it help? What do they think should be the next steps? 

As your employee reaches their goals, reward them! This doesn't have to be monetary in nature. Even complimenting them on their improvement is a great way to show that their efforts didn’t go unnoticed or unappreciated. You may also consider some of these top benefits that can help in incentivizing employees.