What Is a Performance Improvement Plan (PIP)?

What Is a Performance Improvement Plan (PIP)?

No manager wakes up excited to put someone on a performance improvement plan. It’s uncomfortable, time-consuming, and — if handled poorly — can backfire in ways that hurt both the employee and the company. But here’s what most people get wrong about PIPs: they’re not a prelude to firing. Done right, a performance improvement plan is one of the most effective tools an employer has for turning underperformance into real, measurable growth.

The problem? Too many companies treat PIPs like paperwork — a box to check before termination. That approach wastes everyone’s time and opens the door to legal risk. A well-structured PIP, on the other hand, gives employees a clear path forward while protecting the organization if things don’t work out.

In this guide, we’ll cover exactly what a performance improvement plan is, when you should (and shouldn’t) use one, how to write a PIP that actually works, and the legal considerations every employer needs to understand. Whether you manage a team of five or five hundred, this is what you need to know.

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What Is a Performance Improvement Plan?

A performance improvement plan (PIP) is a formal document that outlines specific areas where an employee’s work isn’t meeting expectations, along with clear goals, timelines, and support resources to help them improve. It’s a structured framework — not a verbal warning or a casual “we need to talk.”

Think of a PIP as a written agreement between employer and employee. It says: “Here’s what’s not working. Here’s what good performance looks like. Here’s how long you have to get there. And here’s what we’ll do to help.”

Most PIPs include these core components:

• Specific performance deficiencies — not vague complaints, but documented examples
• Measurable improvement goals — with clear benchmarks for success
• A defined timeline — typically 30, 60, or 90 days
• Support and resources — training, mentoring, or adjusted workload
• Consequences of not meeting goals — which may include reassignment or termination

The goal is always improvement first. Documentation for potential termination is a secondary benefit — not the primary purpose.

PIP vs. Verbal Warning vs. Written Warning

A performance improvement plan sits higher on the formality scale than a verbal or written warning, but it’s not necessarily a “last chance” notice. Here’s how they compare:

A verbal warning is an informal conversation about a specific issue. It usually isn’t documented beyond a manager’s notes.

A written warning formalizes the concern in writing. It goes into the employee’s file and may reference potential consequences.

A PIP goes further by creating a structured plan with specific goals, timelines, support resources, and regular check-ins. It’s a development tool, not just a disciplinary record.

Some companies use all three in a progressive discipline sequence. Others skip straight to a PIP when the performance gap is significant enough to warrant a structured approach.

When Should You Use a Performance Improvement Plan?

Not every performance issue calls for a PIP. Using one too early can feel heavy-handed; using one too late can feel like a setup. Timing matters.

Good Reasons to Issue a PIP

A PIP makes sense when an employee has clear, documented performance gaps that haven’t improved after informal feedback. Common triggers include:

• Consistently missing deadlines or targets after being made aware of the issue
• Declining work quality that’s been addressed in one-on-one meetings without improvement
• Behavioral issues that affect the team — like poor communication, absenteeism, or resistance to feedback
• Failure to meet role requirements after a reasonable ramp-up period
• Skill gaps that were manageable initially but now impact business outcomes

Take the case of David, a mid-level project manager at a SaaS company. His team’s sprint completion rate dropped from 85% to 55% over three months. His manager had two informal conversations about it, documented both, and offered to adjust the project scope. When nothing changed, a 60-day PIP gave David specific benchmarks to hit — and the accountability structure he needed. He finished the PIP period at 82% completion and kept his role.

When a PIP Isn’t the Right Tool

PIPs don’t work for every situation. They’re the wrong choice when:

• The issue is a one-time incident that warrants a warning, not a structured plan
• The employee’s behavior involves gross misconduct — harassment, fraud, safety violations — that calls for immediate action
• The performance gap is caused by inadequate training or unclear expectations that the employer hasn’t addressed
• You’ve already decided to terminate and the PIP is just cover — this creates legal risk, not protection

If you’re using a PIP purely to build a termination file, employees and their attorneys will see through it. And courts often do too.

How to Write a Performance Improvement Plan

Writing an effective PIP requires more than filling in a template. The document needs to be specific enough to hold up legally and human enough to feel fair. Here’s how to build one that works.

Step 1: Document the Performance Gap

Before you write a single word of the PIP, gather your evidence. You need specific, dated examples of underperformance — not generalizations.

Weak: “Sarah isn’t meeting expectations.”

Strong: “Between January 15 and March 1, Sarah missed four out of six client delivery deadlines. Specifically, the Henderson account deliverable was due January 22 and submitted February 3; the Axiom Q1 report was due February 10 and submitted February 19.”

The more specific you are, the harder it is for anyone to argue the PIP was arbitrary or discriminatory.

Step 2: Define Clear, Measurable Goals

Every goal in the PIP should pass the SMART test — Specific, Measurable, Achievable, Relevant, and Time-bound.

Weak: “Improve client communication.”

Strong: “Respond to all client emails within 4 business hours. Provide weekly project status updates to each assigned client by end of day Friday. Achieve a client satisfaction score of 4.0 or above on the next quarterly survey.”

Give the employee two to four goals. More than that and you’re setting them up to fail.

Step 3: Set a Realistic Timeline

Most PIPs run 30, 60, or 90 days. The right length depends on the complexity of the performance gap:

• 30 days works for straightforward issues like attendance, responsiveness, or meeting deadlines
• 60 days fits broader performance concerns that require behavior change and skill development
• 90 days may be appropriate for complex role requirements, especially for senior positions or when significant upskilling is needed

Build in weekly or biweekly check-ins. These aren’t optional — they’re what make the PIP a development tool instead of a paper trail.

Step 4: Specify Support and Resources

This is where many PIPs fall short. If you’re asking an employee to improve, you need to show what you’re providing to help them get there:

• Additional training or coaching sessions
• Pairing with a mentor or senior team member
• Adjusted workload during the improvement period
• Access to tools, certifications, or learning platforms
• More frequent one-on-one meetings with their manager

A PIP without support is just a countdown to termination. Courts and arbitrators notice this distinction.

Step 5: State the Consequences Clearly

Be direct about what happens if the employee doesn’t meet the PIP goals. Common outcomes include:

• Extension of the PIP with revised goals
• Reassignment to a different role
• Demotion with adjusted compensation
• Termination of employment

Use clear, professional language. Avoid threats or emotional framing. The tone should be factual and supportive.

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Performance Improvement Plan Examples

Seeing how other companies structure their PIPs helps clarify what works. Here are two scenarios that illustrate different approaches.

Example 1: Sales Performance

Employee: Regional Sales Manager
Issue: Missed quarterly revenue target by 35% for two consecutive quarters
PIP Duration: 60 days

Goals:

1. Close a minimum of $150,000 in new business within the PIP period
2. Maintain a pipeline of at least 30 qualified opportunities at all times
3. Complete 15 prospect meetings per week (documented in CRM)
4. Submit accurate weekly forecasts within 10% variance of actual results

Support provided: Sales coaching sessions twice weekly with VP of Sales, access to Gong call review platform, reduced administrative duties during PIP period.

Outcome: The employee closed $185,000 in new business and exceeded the pipeline target. PIP completed successfully.

Example 2: Communication and Collaboration

Employee: Senior Software Engineer
Issue: Repeated conflicts with cross-functional teams; three formal complaints from product managers about unresponsive communication and missed standup meetings
PIP Duration: 45 days

Goals:

1. Attend all scheduled standup and sprint planning meetings (100% attendance unless on approved leave)
2. Respond to Slack messages from cross-functional partners within 2 hours during business hours
3. Receive no new formal complaints about communication or collaboration
4. Complete a conflict resolution workshop within the first two weeks

Support provided: Weekly 1:1s with engineering director, conflict resolution workshop registration, optional sessions with an executive coach.

Outcome: The engineer attended all meetings, received positive feedback from two product managers, and the PIP was closed out successfully.

Legal Considerations for Employers

A PIP isn’t a legal document in itself, but it creates a paper trail that matters — especially if the employment relationship ends in termination or a legal dispute.

Documentation as Protection

If an employee is later terminated and files a wrongful termination claim, a well-documented PIP can demonstrate that:

• The employer identified specific, legitimate performance concerns
• The employee was given clear notice of the issues
• Reasonable support and time were provided to improve
• The decision to terminate was based on documented failure to meet stated goals — not bias or retaliation

Without this documentation, employers are vulnerable to claims that the termination was discriminatory, retaliatory, or without cause.

At-Will Employment and PIPs

In the United States, most employment is “at-will,” meaning either party can end the relationship at any time for any lawful reason. You don’t legally need a PIP before terminating someone.

But “legally required” and “practically advisable” are two different things. Skipping the PIP process can expose your company to wrongful termination lawsuits, unemployment insurance disputes, and reputational risk — especially if the terminated employee belongs to a protected class.

International Considerations

Employment laws outside the U.S. often require formal performance management steps before termination. In many European countries, for example, employers must demonstrate that they followed a fair process — including documented warnings and improvement plans — before dismissing an employee.

If you’re managing employees across multiple countries, this gets complicated fast. Each jurisdiction has its own rules about notice periods, documentation requirements, and what constitutes a “fair” performance management process.

This is one of the reasons companies with distributed teams turn to an Employer of Record — to ensure their performance management processes comply with local employment laws in every country where they have employees.

Need compliant performance management across borders? Remote People handles HR compliance in 150+ countries so you can manage your team with confidence. Learn more →

Common Mistakes That Undermine PIPs

Even well-intentioned PIPs can fail if the execution is off. Here are the mistakes that derail the process most often.

Vague or Unmeasurable Goals

“Improve your attitude” isn’t a performance goal — it’s an opinion. Every goal in a PIP must be observable and measurable. If you can’t point to specific data or documented behavior to evaluate progress, the goal doesn’t belong in the plan.

Using PIPs as a Punishment Tool

When employees perceive a PIP as punishment rather than support, they disengage immediately. The language, tone, and delivery of the PIP all signal your intent. If the employee’s manager presents it as “here’s your chance to turn things around” versus “this is the beginning of the end,” the outcome will be dramatically different.

Consider how Rachel, an HR director at a logistics company, changed her organization’s PIP completion rate from 15% to 65% in one year. The PIPs themselves didn’t change much. What changed was the delivery — managers were trained to frame PIPs as development tools, hold genuine support conversations, and celebrate progress during check-ins.

Inconsistent Application

If you put one underperforming employee on a PIP but let another slide, you’ve created a discrimination risk. PIPs must be applied consistently across similar situations, regardless of the employee’s demographics, tenure, or personal relationship with management.

Skipping Regular Check-Ins

A PIP without check-ins is just a document that sits in a file. Weekly or biweekly progress reviews are essential — both for the employee’s development and for your legal protection. Document every check-in conversation, including what was discussed, what progress was made, and any adjustments to the plan.

How PIPs Work for Remote and Distributed Teams

Managing performance is challenging enough when everyone’s in the same office. For remote-first companies, it requires extra intentionality.

The Remote PIP Challenge

Remote employees may not get the same level of informal feedback that office-based workers receive. A quick hallway conversation about a missed deadline doesn’t happen naturally when your team is spread across time zones. This means performance issues can escalate further before they’re formally addressed.

For distributed teams, PIPs need to account for:

• Time zone differences — check-in schedules that work for both parties
• Communication tools — where progress updates and feedback will be shared (Slack, email, project management tools)
• Cultural context — in some cultures, direct performance feedback is delivered differently than in others
• Local employment law — what’s required in the employee’s country, not just your headquarters’ jurisdiction

Building a Remote PIP Process

The fundamentals don’t change for remote teams, but the execution needs adjustment:

1. Deliver the PIP via video call — not email. The employee needs to hear your tone and ask questions in real time.
2. Follow up with the written document — send it immediately after the meeting for the employee to review and sign.
3. Use shared tracking tools — make progress visible to both the employee and manager through dashboards or shared documents.
4. Schedule check-ins with buffer time — don’t squeeze a PIP review into 15 minutes between other meetings.
5. Involve local HR support — if the employee is in a different country, make sure your process complies with local requirements.

Companies that manage employee retention effectively know that a fair, well-executed PIP process is actually a retention tool — it shows your team that you invest in people before giving up on them.

Key Takeaways

• A PIP is a development tool first — use it to help employees improve, not just to document a path to termination
• Specificity is everything — vague goals undermine the entire process legally and practically
• Support must accompany expectations — a PIP without resources is a setup for failure
• Consistency protects your organization — apply PIPs the same way across similar situations
• International employers need local compliance — performance management requirements vary significantly by country
• Regular check-ins make or break the process — document progress conversations and adjust as needed

When done right, a performance improvement plan gives employees a genuine chance to succeed — and gives employers the documentation they need if things don’t work out. That’s not a contradiction. It’s good management.

Remote People helps companies navigate performance management compliance across borders. From local employment law requirements to HR best practices, we support your team wherever they work. Get started today →