How to build a performance improvement plan that works
An HBR case study found only 15 percent of employees on performance improvement plans complete them. Most PIPs fail because the underlying process is broken, not the employee. Structured plans with clear metrics, real support, and consistent follow-ups change the outcome.
Performance improvement plans work best when HR processes are consistent and well-documented. Here’s how we approach process improvement for teams.
Tallyfy is Process Improvement Made Easy
Summary
- PIPs fail without process discipline - An HBR case study found only 15% of employees placed on PIPs complete them, while 60% get terminated, mostly because the process itself is inconsistent and punitive rather than supportive
- Document behavior, not personality - Talk to peers and managers to find specific missed marks in job functions, not vague complaints about attitude or character
- Follow-ups are the whole game - PIPs with structured support achieve 60% higher success rates than those that just hand over a document and walk away
- AI runs your process at 10x speed, flaws and all - Throwing AI tools at a broken performance management workflow just accelerates the dysfunction. Fix the process first, then think about automation. See how Tallyfy creates trackable HR workflows
A performance improvement plan is one of those HR tools that everyone has an opinion about. Some managers think it’s a formality before firing someone. Others see it as genuine support for a struggling team member.
Both camps are wrong. And right. It depends entirely on how you run the thing.
The real problem? Most organizations don’t have a repeatable process for PIPs. Every manager does it differently. Some document everything, others wing it. To be fair, not every manager, but enough of them. The result is messy inconsistency that hurts both the employee and the company.
What a PIP is and why most of them fail
A performance improvement plan is a structured agreement between a manager and an employee. It spells out where performance is falling short, what “good” looks like, and a timeline for getting there. Simple enough.
But here’s where it gets interesting. SHRM’s guidance is clear that PIPs should reflect “a commitment to help the employee improve, not as a way for frustrated managers to start the termination process.” That’s the theory. The practice is different.
That HBR case study I mentioned earlier painted a grim picture: 15% completion, 60% termination, 25% going on stress leave. Turns out, those numbers should bother anyone in HR. They bothered me.
Why the gap? One thing that keeps coming up with workflow automation, we’ve seen the same pattern across industries. When a process lives in someone’s head rather than in a trackable system, it degrades. Every time. The manager forgets to schedule a check-in. The employee doesn’t know what resources are available. Nobody remembers what was agreed upon three weeks ago.
This is exactly the kind of problem we built Tallyfy to solve. Not just for PIPs, but for any repeatable process where consistency matters and things fall through the cracks when left to memory and good intentions.
Building the plan itself
Before you sit down with the employee, you need to do your homework. And I mean real homework, not a quick skim of their last review.
Get specific about what’s broken. Talk to peers. Talk to other managers who interact with this person. Find concrete instances where they missed the mark on actual job functions. “Bad attitude” isn’t a performance issue you can measure. “Missed three project deadlines in Q1 and failed to communicate blockers to the team” - that’s something you can work with.
Erik van Vulpen’s team at AIHR recommends that every PIP should include SMART goals - specific, measurable, attainable, relevant, and time-bound. I’d add one more thing: make them collaborative. Research shows that collaborative PIPs achieve 45% higher completion rates than ones imposed top-down. That’s a massive difference.
Your plan needs three things at minimum:
Performance metrics. Where is this person now versus where they need to be? Make it objective. Numbers don’t lie and they don’t play favorites. If the rest of the team hits 90% on quality checks and this person is at 62%, that’s your baseline.
A realistic timeline with milestones. SHRM notes that most PIPs run 30, 60, or 90 days. We built Tallyfy because we kept seeing with HR teams at mid-size organizations, 90-day cycles tend to work well for tracking progress on meaningful behavioral changes. Monthly milestones within that window let you catch problems early. The key is making each milestone specific enough that both the manager and the employee can look at it and agree - objectively - whether it was met. Vague milestones like “show improvement” are worse than useless because they invite disagreement at the worst possible moment. Monthly check-ins tied to concrete metrics let you catch drift early, offer support before someone falls too far behind, and build a documented trail that protects everyone involved.
Consequences stated honestly. The employee needs to know what happens if they don’t improve. But don’t lead with the stick. The goal is motivation, not intimidation. Does fear motivate people? Almost never. Scared employees don’t perform better. They just start looking for another job.
Getting HR involved before the meeting
I think this step gets skipped more than people want to admit. Managers feel confident they can handle it alone. Maybe they can. But an HR review before the employee meeting serves a purpose beyond just checking boxes.
Someone outside the direct relationship can spot bias you can’t see yourself. They’ll catch whether your goals are genuinely measurable or just dressed-up opinions. They’ll flag legal risks you hadn’t considered. I learned this the hard way at Tallyfy - this outside perspective often transforms a mediocre PIP into one that might work.
Running Tallyfy taught us how building this review step into the workflow - as an actual task that has to be completed before the process moves forward - prevents it from being skipped when managers feel pressed for time.
Conversation that makes or breaks everything
This is where most managers get nervous. And honestly? They should be. This conversation shapes whether the employee sees the PIP as a lifeline or a death sentence.
Start by being direct about what you’ve observed. Use the specific instances you documented. Then shift quickly to the support side. What resources can you offer? Training? Mentorship? Adjusted workload while they get back on track?
Listen. I mean genuinely listen. The employee might point to friction with another team member, unclear expectations from leadership, or resource gaps you didn’t know about. Every time we onboard a new team, the same issue surfaces - coordination breakdowns across departments, where multiple people need to complete interdependent tasks without clear sequencing or accountability.
Sometimes the “underperformer” is actually a symptom of a broken process, not the cause.
Make sure they sign off on the plan. Not as a “gotcha” but as mutual acknowledgment that you’re both committed to this working out.
Follow-ups are where PIPs live or die
Here’s my honest take: everything before this point is just setup. The follow-ups are the actual PIP.
Hand someone a document, shake hands, and check back in 90 days? That’s not a performance improvement plan. That’s basically wishful thinking with paperwork.
Regular 1-on-1 meetings - weekly or biweekly at minimum - accomplish three things:
The employee knows you’re invested. Not watching over their shoulder, but genuinely paying attention to their progress. That distinction matters more than people realize.
They get a chance to ask for help before they’re drowning. Maybe they need access to a tool. Maybe they need their manager to remove a blocker. These small asks, addressed quickly, can make the difference between someone hitting their milestones and someone spiraling.
You stay informed. No surprises at the 90-day mark. If things aren’t improving by week three, you know. You can adjust the plan, add resources, or have a harder conversation while there’s still time to course-correct.
This is probably where I should mention the mega trend that keeps coming up in everything we do at Tallyfy: Plenty of organizations are rushing to bolt AI tools onto their performance management workflows. Automated sentiment analysis of employee communications. AI-generated performance summaries. Gartner’s research on AI in HR shows the trend is accelerating. Which sounds great until you look closer.
But if your PIP process is already broken - inconsistent follow-ups, missing documentation, managers who don’t know the steps - then automating it with AI just means you’ll fail faster and at greater scale. Fix the process first. Make it repeatable and trackable. Then automate.
When a PIP reveals a bigger problem
Sometimes the PIP process surfaces something uncomfortable: the problem isn’t the employee. It’s the system around them.
I’ve thought about this a lot. An employee who’s “underperforming” in a chaotic environment might thrive in a structured one. If three people on the same team end up on PIPs within a year, the common denominator probably isn’t three bad hires. It’s probably a management or process issue.
This is why tracking PIP outcomes matters at an organizational level, not just an individual one. When you run PIPs through a consistent workflow in Tallyfy - same steps, same checkpoints, same documentation requirements every time - you start to see patterns. Which departments have higher PIP rates? Which managers have better outcomes? Where do PIPs stall?
That data tells you something. Probably something important.
Making the process stick
An underperforming employee creates stress for everyone. Their teammates pick up slack. Their manager spends extra time on oversight. Projects slow down.
But the answer isn’t to rush through a half-baked PIP so you can justify a termination. The answer is to build a proper process that gives people a real chance while protecting the organization. Is that easy? Not really.
Here’s what that looks like in practice:
Document specific performance gaps with evidence, not opinions. Collaborate on measurable goals and a reasonable timeline. Get HR to review before the meeting. Have an honest conversation where you listen as much as you talk. Follow up consistently, not when you remember. Track everything in a system that doesn’t depend on anyone’s memory. The organizations that run PIPs well don’t treat them as paperwork exercises. They treat them as structured processes with defined steps, clear accountability, and real follow-through. Which, not coincidentally, is how any important business process should work.
Want to build consistent, trackable performance improvement workflows? See how Tallyfy helps HR teams run repeatable processes.
Related reading: improving employee buy-in and employee onboarding best practices.
About the Author
Amit is the CEO of Tallyfy. He is a workflow expert and specializes in process automation and the next generation of business process management in the post-flowchart age. He has decades of consulting experience in task and workflow automation, continuous improvement (all the flavors) and AI-driven workflows for small and large companies. Amit did a Computer Science degree at the University of Bath and moved from the UK to St. Louis, MO in 2014. He loves watching American robins and their nesting behaviors!
Follow Amit on his website, LinkedIn, Facebook, Reddit, X (Twitter) or YouTube.
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