How to create a performance improvement plan
A complete guide to creating effective PIPs that help underperforming employees succeed while protecting your business. Learn the process, essential elements, and tips.
Written by
Georgia Morgan
General information only – not legal advice
This guide provides general information about creating Performance Improvement Plans (PIPs) in Australia. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
Note: A PIP should be a genuine attempt to help an employee improve, not just documentation for termination. If you're using PIPs purely to build a case, the Fair Work Commission may view termination as unfair.
What to include in a PIP
Performance issues
Clear, specific description of what isn't meeting expectations
Expected standards
What good performance looks like in this role
Improvement goals
Specific, measurable objectives the employee must achieve
Timeframe
Duration of the PIP (typically 4-12 weeks)
Support provided
Training, coaching, resources, or adjustments you'll offer
Review schedule
When and how progress will be assessed
Consequences
What happens if improvement isn't achieved
Signatures
Employee acknowledgment and manager approval
PIP do's and don'ts
| Do | Don't |
|---|---|
| Set achievable, measurable goals | Make goals vague or impossible to meet |
| Offer genuine support and resources | Use PIPs just to build a termination case |
| Check in regularly and provide feedback | Set and forget until the end date |
| Document all discussions and progress | Rely on memory for what was said |
| Consider underlying causes | Ignore health, workload, or other factors |
| Recognise improvement genuinely | Move goalposts when employee improves |
The PIP process in 6 steps
Identify and document the performance issues
Clearly define what performance problems exist and gather evidence before creating a PIP.
- Be specific about what standards aren't being met
- Collect evidence: missed KPIs, quality issues, feedback
- Review any previous informal feedback or warnings
- Ensure the issues are about performance, not conduct
Meet with the employee before finalising the PIP
Discuss the performance concerns and give the employee a chance to respond.
- Explain the specific concerns clearly
- Ask if there are factors affecting their performance
- Listen to their perspective genuinely
- Advise they can have a support person present
Draft the PIP document
Create a formal document outlining expectations, support, and review points.
- State the performance gap clearly
- Define specific, measurable improvement goals
- Set a realistic timeframe (usually 4-12 weeks)
- Outline the support you will provide
Meet to present the PIP
Present the PIP formally, explain it thoroughly, and answer questions.
- Walk through each section of the PIP
- Ensure the employee understands what's expected
- Confirm the support and resources available
- Have them sign to acknowledge receipt (not agreement)
Implement regular check-ins
Meet frequently to review progress, provide feedback, and adjust support if needed.
- Schedule weekly or fortnightly check-ins
- Document progress at each meeting
- Provide positive feedback when improvement occurs
- Identify barriers and offer additional support
Conclude the PIP with a formal review
At the end of the period, formally assess whether goals were met.
- Review against each goal in the PIP
- If successful: confirm the PIP is complete, acknowledge improvement
- If partially successful: extend the PIP or adjust goals
- If unsuccessful: proceed with further action as warned
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Frequently asked questions
- A PIP is a formal document that outlines an employee's performance issues, sets clear improvement goals, establishes a timeframe, and specifies the support provided and consequences of not improving. It's a structured way to help underperforming employees succeed while documenting the process.
- Use a PIP when an employee's performance consistently falls below expectations despite informal feedback and coaching. PIPs are for ongoing performance issues, not one-off mistakes or conduct issues (which may require different processes like warning letters).
- Typically 4-12 weeks, depending on the complexity of the improvements needed. Simple skill gaps might need 4-6 weeks. Complex behavioural or capability issues may need 8-12 weeks. The timeframe should be realistic for achieving the goals.
- A PIP is primarily a support tool, though it does typically include consequences (further action, up to termination) if improvement doesn't occur. Some organisations issue a PIP instead of a warning; others issue a warning first, then a PIP. Follow your policy consistently.
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