Hiring and training new employees (if you can find them) is expensive and time-consuming. Due to this dilemma, we are often contacted by Florida small business owners to discuss ways to positively address employee performance problems, in hopes of saving a productive employee. So, before firing an employee, what can be done to save the company’s investment in their job skills? Good employees sometimes lose focus or struggle to deliver sustained performance results. In those cases, an employer will need to engage in an actionable conversation that can reverse a performance slide and reset job expectations – before termination. We regularly recommend that small business clients use two fundamental HR tools to implement a performance culture (and to drive business results): (1) regular performance dialogues (monthly, quarterly or annually) and (2) performance improvement plans. A performance improvement plan (PIP) is best used in conjunction with regular performance dialogues, but it can also be used as a stand-alone action to fix deficiencies in employee performance.
A PIP is appropriate when the employer is committed to helping an employee correct their performance problems and is willing to give sufficient time to see the improvement. If an employer has already decided that the employee will be terminated for poor performance, or the problems are related to workplace misconduct, then a PIP is not the best approach. The manager also needs to be committed to giving a fair chance to the employee and be accessible to give needed feedback and encouragement. If the manager only wants to create termination documentation, use corrective action and not a PIP. The use of PIPs also creates a company culture of employee focus, fairness, and transparency. PIPs work best when there are objective measures of performance, so the agreement can contain specific numbers, ratings or results. A PIP can also be used to address problems with work behaviors and critical competencies. For instance, if problem-solving, initiative or interpersonal skills are not good enough, the PIP can address these subjects.
A PIP will be put in writing, shared with the employee and signed by everyone. It is a formal structured approach to bridging performance gaps. When possible, a PIP should make reference to an existing written position description that identifies duties, competencies, and deliverables. Here are some other tips for putting together your written PIP together (either memo or letter format):
- Include the reason for the PIP – be specific about deficiencies – give example(s)
- State that current performance coaching has been unsuccessful
- Have a positive and confident focus – be appreciative of contributions
- Add PIP plan details – organize around general areas and then give specific standards that will be used to measure and determine success. For example: improve communication with department manager – provide daily feedback to manager about “x type” situations.
- Use deadlines and time frames such as 30 or 60 days.
- Restate that improvement must be sustained.
- Employee and manager sign the agreement
After meeting with the employee to explain the PIP, and getting it signed, the manager will calendar the follow-up events and then monitor the plan and performance progress. If there is training or skill-building elements in the plan, the session needs to be assigned and completed. With hard work and discipline by both parties, hopefully, you can save the employee. If your company wants a sample PIP template, give us a call.