If an employee’s performance isn’t meeting expectations, it can feel like you’re facing a difficult crossroads. You want to support them to succeed, but you also need to protect your business, your team, and your standards.
A performance improvement plan (PIP) provides a structured, fair, and supportive way to help employees get back on track. When used properly, it builds trust, creates clarity, and ultimately boosts performance for everyone involved.
In this complete guide, we’ll explain exactly what a performance improvement plan is, when to use one, and how to implement it effectively in your organisation.
What is a performance improvement plan?
A performance improvement plan (PIP) is a formal document used by employers to help an employee improve their performance to the required standard within a certain timeframe.
It sets out:
- The specific areas where performance is falling short
- Clear, measurable expectations for improvement
- Support the employer will provide
- A timeline for review
- The possible outcomes if improvement is not achieved
Importantly, a performance improvement plan is not about punishment. It’s about providing structure, clarity, and support so employees have an opportunity to succeed.
When implemented correctly, it protects both your employee and your organisation.
Why performance improvement plans matter for employers
For SME employers in the UK, managing performance effectively is essential for both operational success and legal protection.
A well-managed performance improvement plan helps you:
1. Create clarity and fairness
Employees should clearly understand what’s expected and what needs to improve.
2. Support employee development
Many performance issues arise from unclear expectations, training gaps, or changing roles – not necessarily a lack of effort.
3. Reduce legal risk
Documented performance management proves fairness and consistency if dismissal becomes necessary later down the line.
4. Strengthen your workplace culture
Addressing performance constructively reinforces accountability and trust across your team. When employees know they’ll be supported, not simply judged, engagement and performance improve across the organisation.
When should you use a performance improvement plan?
A performance improvement plan should be used when informal support and feedback have not resolved performance concerns.
Common situations that indicate a PIP may be needed include:
- Consistently missing targets or deadlines
- Declining quality of work
- Failure to meet agreed objectives
- Difficulty fulfilling key responsibilities
- Ongoing behavioural concerns affecting performance
Before implementing an official PIP, it’s best practice to address concerns informally first (if this has not already been done). This could include:
- One-to-one discussions
- Additional training or coaching
- Clearer expectations and feedback
If improvement does not follow, a performance improvement plan provides the necessary formal structure to make a positive difference.
Is a performance improvement plan part of a disciplinary process?
In the UK, performance improvement plans are typically part of a capability process, not a disciplinary process. Capability relates to an employee’s ability to perform their role, while disciplinary processes relate to misconduct.
This distinction is important because capability issues require a supportive approach focused on improvement, not punishment.
However, if performance does not improve despite appropriate support and opportunity, capability procedures may ultimately lead to dismissal, provided the proper process is followed.
What should a performance improvement plan include?
For a PIP to have the highest chance of being successful, it must be clear, specific and achievable. Key components include:
- Clear explanation of performance concerns – use factual and objective examples of poor performance
- Defined performance expectations – explain what acceptable performance looks like with specific targets and behavioural expectations
- Measurable improvement goals – these should be SMART (specific, measurable, achievable, relevant, time-bound)
- Reasonable timeframe for improvement – most PIPs last between 30 and 90 days, depending on the nature of the role and issues involved
- Support and resources provided – employers have a responsibility to provide reasonable support such as training, mentoring and feedback
- Review schedule – regular meetings to monitor progress and provide real-time feedback
- Potential outcomes – for full transparency, clearly explain what the possible outcomes might be, such as return to normal performance monitoring, extension of the plan, or progression to formal capability procedures
What should a performance improvement plan include?
Step 1: Identify and document performance concerns
Gather objective evidence, such as performance data, missed target examples, and feedback records. This ensures discussions are based on facts, not opinions.
Step 2: Meet with the employee
Arrange a formal meeting to discuss your concerns. Approach the conversation constructively and supportively and be sure to focus on improvement, not blame.
Explain clearly any performance concerns, the impact on the business, and your intention to support their improvement. It’s important here to encourage the employee to share their perspective, as underlying issues such as unclear expectations, personal challenges, or lack of training may be contributing factors.
Step 3: Develop the performance improvement plan
Create a written document clearly outlining everything covered in the above section (performance concerns, expected improvements, timeframes, support provided, the review schedule, and possible outcomes).
Be sure that the employee understands and agrees to the plan you have drafted.
Step 4: Monitor progress and provide support
Regular check-ins with the employee are essential. These conversations should focus on progress made to date, any challenges faced, and additional areas of support required.
Providing ongoing guidance demonstrates fairness, genuine support, and strengthens the likelihood of success at the end of the performance improvement process.
Step 5: Review the outcome
At the end of the review period, you need to assess whether the required improvements have been achieved. Possible outcomes can include:
- Successful improvement: The employee returns to normal performance monitoring
- Partial improvement: The plan may be extended with continued support
- Insufficient improvement: Formal capability procedures may progress, in line with UK employment law
Common mistakes employers should avoid
Many performance improvement plans fail because they are poorly structured or applied inconsistently.
Here are some of the common pitfalls employers should avoid:
- Lack of clarity
Vague expectations and desired outcomes make improvement difficult – you can’t improve on what you don’t know, after all. - Insufficient support
Employees need the right tools and guidance for a performance improvement process to be successful. If not, you risk them becoming unmotivated and losing interest in bettering themselves. - Inconsistent monitoring
Regular reviews ensure accountability and progress – you want to ensure they’re demonstrating a steady, continuous improvement over the set period. - Treating the process as a punishment
A performance improvement plan should focus on development, not blame. Negative attitudes and hostile environments can lead to the opposite of the desired PIP outcome. - Rushing the process
Employees must be given a reasonable timeframe to see real improvement. A generous, supportive, and consistent approach delivers the best outcomes for everyone.
How performance improvement programmes support business success
Effective performance management strengthens your entire organisation. When done correctly, it helps you to improve productivity through supporting employee development and maintaining high standards.
In some situations, it also minimises workplace conflict, which benefits overall morale across the business.
In short, performance improvement plans are about resolving problems and performance issues at a fundamental level. When actioned effectively and with purpose, they’re also about unlocking greater people potential.
How Omny HR supports you with performance improvement plans
Managing employee performance can feel complex, especially for growing SMEs. At Omny Group, we work alongside you to make performance management clear, fair, and most importantly, effective.
We help you:
✅ Create compliant and impactful performance improvement plans
✅ Manage capability processes confidently
✅ Support employee development
✅ Reduce legal risk
✅ Strengthen your workplace culture
Our approach is practical, supportive, and always focused on helping your people and your business thrive – because when your people succeed, your organisation does too.
If you’d like expert guidance on implementing performance improvement plans or managing employee performance on a wider level, Omny HR is here to support you every step of the way. Discover which level of HR support works best for you, or get in touch with us today.