Performance Improvement Plans: A Practical Tool for Turning Things Around

You’ve built a great team, but there’s one person who just isn’t keeping up. You’re not ready to let them go, but you know things can’t continue as they are.

Many business owners often feel stuck between giving someone a fair chance and protecting the rest of the team, and the business. That’s where using a Performance Improvement Plan (PIP) can make all the difference.

Despite its reputation, a PIP isn’t just a stepping stone to termination. When used the right way, it’s one of the most effective, respectful, and compliant tools available to manage underperformance, guide improvement, and bring structure back to your team.

What Is a Performance Improvement Plan?

At its core, a PIP is a clear, structured plan that outlines:

• Where an employee’s performance isn’t meeting expectations

• What 'good' looks like

• How they can get there

• The timeframe to achieve it

• What support will be provided along the way

It’s collaborative, not one-sided. You’re not handing someone a list of complaints, but instead opening a conversation about improvement, ownership, and support.

When Should You Use a PIP?

Here’s a quick check to see if a PIP is the right move:

• Has this person generally been reliable, but they’ve recently dropped the ball?

• Are expectations clear, or could they use some clarification?

• Do you believe they want to do well, but something’s holding them back?

• Would clearer goals or extra training help?

  
  

If you’re answering 'yes' to any of these, a PIP might be just the tool to support the employee, start seeing some improvement, and protect your business.

A Performance Improvement Plan Supports HR Compliance

Many businesses don’t realise this, but having a documented process like a PIP in place is also a key compliance step.

If you ever need to terminate employment due to poor performance, Fair Work expects you to show:

• That the employee was made aware of the concerns

• That they were given a genuine opportunity to improve

• That you followed a fair, structured process

  
  

A PIP shows exactly that. It helps protect your business from unfair dismissal claims by showing that you acted reasonably and in good faith.

The Benefits of a PIP Done Right

1. Gives the employee clear direction - They know exactly what's expected, what success looks like, and how to get there.

2. Strengthens communication - No more assumptions, everyone’s on the same page with goals, timelines, and feedback.

3. Protects your business - A well-documented process shows you’ve acted fairly and given genuine opportunities to improve, which is essential if performance doesn't lift.

4. Lifts productivity and morale - When issues are addressed early and clearly, the whole team benefits.

5. Clarifies the role itself - Sometimes the problem isn’t the person, it’s the position. A PIP can highlight gaps or a misalignment that needs fixing.

PIP Best Practices That Work

1. Start with a clear purpose - Let your employee know this isn’t a punishment, it’s a structured plan to support their success. Try:"I want to help you succeed, and this plan gives us both a roadmap to get there."

2. Make it a shared conversation - Don’t just talk at them. Ask what they think is getting in the way, and what support would help them turn things around.

3. Set clear, measurable goals - Be specific. Instead of “improve attitude,” focus on things like “respond to client queries within 24 hours” or “submit reports by Friday each week.”

4. Offer real, practical support - That could be extra training, shadowing another team member, regular feedback sessions, whatever will help them close the gap.

5. Schedule consistent check-ins - Short, regular meetings (weekly or fortnightly) keep things on track and show you’re committed to their progress.

6. Keep everything documented - Track goals, deadlines, conversations, and outcomes. If the improvement doesn’t happen, you’ll have a clear record of what steps were taken.

How to Track Progress

Measuring progress doesn’t have to be complicated. Use simple, relevant tools that align with the employee’s role and responsibilities:

• Role-specific KPIs - Link performance goals to tangible business outcomes, like sales targets, project completion rates, or accuracy metrics.

• Customer feedback - For client-facing roles, tools like Net Promoter Scores (NPS)* or direct client feedback can highlight improvements in service or communication.

• Training outcomes - If you’ve provided extra support, check whether it’s translating into better performance. Look at assessment results, skill application, or on-the-job changes.

• 360-degree feedback - Get a balanced view by collecting input from colleagues, managers, and even clients where appropriate. This can highlight improvements (or issues) that others are seeing too.

*Net Promoter Scores: Customers are asked one key question: "On a scale of 0 to 10...."

Based on their response, customers are grouped into three categories:

• Promoters (9–10): Love your service, likely to refer others

• Passives (7–8): Satisfied, but not enthusiastic

• Detractors (0–6): Unhappy and could harm your reputation through negative word-of-mouth

Common Mistakes To Avoid

• Using a PIP as a formality before termination - If the plan is just a tick-the-box step before letting someone go, it shows. A PIP should be a genuine opportunity for improvement.

• Failing to follow through - Creating a plan is only the first step. Without regular check-ins and accountability, it becomes just another document no one uses.

• Setting goals without support - Expecting change without offering guidance, training, or feedback sets your employees up to fail. Support is what turns a plan into a real pathway forward.

• Leaving the employee out of the process - A one-sided plan won’t work. Involve your employee, ask for their input, listen to their concerns, and make it a shared commitment.

Final Thoughts

When done well, a PIP is one of the most respectful and effective tools you have to support your team, address underperformance, and protect your business.

It gives your employee the chance to reflect, reset, and succeed, with clear goals and real support. And it gives you the structure, documentation, and peace of mind to know that you're being fair and staying compliant.

If you’re unsure where to start, need help putting a plan in place, or are looking for guidance on how to deal with underperformance, we're here to help.

Book a free discovery call today, and let’s make managing HR the least of your worries. 

Get in Touch

Need help? Contact us today - sandra@hrconsultingtas.com.au or 0408 408 225  

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