What Is a Performance Plan? Definition, Template and Examples
A performance plan, or performance indicator plan (PIP), is generally used to highlight any areas where an employee is failing to meet company standards.
A performance plan will detail:
- Your job role and responsibilities
- The area or areas of performance issues
- Goals you need to achieve
- The skill sets required for your role
- A plan to facilitate improvement
- Consequences of failing to improve performance
These plans are often used as a final attempt to motivate employees before issuing a termination notice.
However, performance plans can also be used as motivational tools to facilitate an employee’s personal and professional growth.
They can be issued to an individual or an entire team, depending on the situation.
The discussions surrounding a performance plan are typically formal and may involve several conversations to ensure everything is understood and implemented.
Simply put, a performance plan is similar to a probation period.
A successful performance plan will lead to an improvement in an employee’s or team’s performance, resulting in no termination. An unsuccessful plan often leads to termination.
Depending on the company’s key performance indicators (KPIs) and the performance issue in question, a plan could be put in place to address the following:
- Turning up for work on time
- Improving sales
- Being more enthusiastic about your role
- Being more empathetic to your colleagues
There is a common belief that performance plans are merely official documents to show a company did address any issues before a dismissal.
However, there is a difference between a disciplinary and a performance plan.
A warning letter or disciplinary process highlights all your failures, indicating reasons for dismissal and sits in your file as a constant reminder.
A performance plan is a structured document that clearly outlines the issues and details SMART goals for you to achieve over a set timeframe.
If the goals in your performance plan are unrealistic, then it could be that the company does intend to terminate your employment. If you feel this is the case, it is recommended you start a new job search ahead of time.
But the effort that goes into creating a performance plan suggests the company does want to keep you and is allowing you the time to fix any issues.
There are several reasons why a performance plan is used:
- You or your team are continually failing to meet deadlines
- There is a lack of professional communication
- You or your team are considered dysfunctional
- There is no regard for how your behavior or that of your team affects the overall performance of the company
- The work quality of you or your team has decreased
There are countless reasons why an employee may not be performing at their best.
If you are given a performance plan, consider the following advice.
If your employer wanted to dismiss you, they would do it without dedicating time and resources.
Being issued a performance plan can be upsetting, as you’re probably thinking you are close to losing your job.
If this is a role you genuinely want to keep, take a moment to collect yourself before resuming the conversation. These few seconds will be barely noticeable to your manager or HR representative. This short moment will stop you from responding emotionally and allow you to have a constructive conversation.
There is a reason why you are not performing according to standards. It could be because of a personal issue at home, someone in your team, or even company policies.
Whatever the reason, let your manager know, as it allows them to set appropriate goals and timelines.
It is important to note that, if you are having performance issues because the company sets unrealistic goals, or you aren’t getting the support you need, then that company may not be the employer for you.
A majority of employees fail because they are working in a hostile work environment.
There is nothing wrong with wanting to work in a slower, more laid-back workplace that values your wellbeing.
If you feel that the goals are unrealistic and that you will never thrive there, consider looking for another job.
You spend most of your adult life at work, so it needs to be a place where you feel supported and happy.
Ask as many questions as you need.
When you leave that room, you want to be crystal clear on what is expected and what you need to do.
Don’t be afraid to ask for additional support, such as weekly feedback sessions or a peer review.
Though the exact template will vary between companies, a performance plan has the following elements:
- Areas of improvement – These can be related to behavior or performance, and there may be more than one.
- Examples of failures – For a performance plan to be effective, there have to be examples for you to reflect on. If your manager fails to give an example and you feel that you are not failing in that area, speak up and ask for clarification.
- Expected standards – These goals need to be specific, measurable and achievable.
- Agreed actions – What you and your manager agree is the way to achieve your goals
- Support – Any additional meetings, feedback or training that will help you achieve your goals
- Review date – Date of progress review
- Review notes – Performance so far
- Achievement date – When your goal needs to be met
Performance plans are useful tools when it comes to improving weak areas in your performance.
However, there is no denying that they are typically used as a last resort before termination.
If you find yourself on a performance plan, consider:
- What your improvement areas are
- Whether the company is a good fit for you
- Whether the goals are achievable
If this is a role that you love and want to keep, work with your manager and HR to ensure you achieve your goals and maintain those standards.
If it is not a role you enjoy and you believe your employer wants to dismiss you, consider looking for another job.