I wonder how to run a fair and effective Performance Improvement Plan (PIP)?

Performance dips happen, even in great teams. The question for employers is how to tackle underperformance fairly, quickly, and in a way that actually has a positive outcome. A well-run capability process or Performance Improvement Plan (PIP) can reset expectations, support the employee, and protect your organisation if things do not improve.

What is a Performance Improvement Plan?

A PIP is a structured, time‑limited plan that sets out where performance is falling short, the standards required, the support you will provide, and the timescales for review. It is a management tool, not a punishment. Used well, it clarifies expectations, removes ambiguity, and gives the employee a fair opportunity to improve. It sits within your capability procedure and should be tailored to the role and the individual. It should be simple, specific and focused on measurable work outputs and behaviours.

What are the key considerations?

There are multiple considerations that you need to take into account before instigating a PIP:

• Fair process and Acas Code: Follow a fair capability process with clear communication, reasonable timescales, and a right of representation at formal stages.
   
• Discrimination and adjustments: Check if disability, pregnancy, age, or other protected characteristics are in play. A rigid PIP which is applied to all may put certain characteristics at a disadvantage.
   
• Procedure: Having a clear and reasonable procedure helps ensure consistency, transparency and fairness when managing performance issues.
   
• Stress and health: Watch for signs of stress or ill‑health. Consider Occupational Health input and pause or adapt the process if medical issues affect capability.

What should employers do if performance issues arise?

If an employee's performance starts to drop, have a timely, private conversation with them. Share concrete examples, and agree on short, supportive next steps. If issues persist, move to a formal PIP within your capability procedure. Specifically, you could:

• Arrange an informal meeting: Explain concerns, hear the employee’s perspective, and agree on immediate supports and quick wins.
   
• Consider SMART targets: Set Specific, Measurable, Achievable, Relevant and Time‑bound goals tied to core duties.
   
• Review resourcing and training: Provide practical support such as coaching, shadowing, refresher training or clearer workflows.
   
• Communicate the plan in writing: Set out targets, measures, support, review dates, possible outcomes, and consequences of not improving.
   
• Investigate underlying factors: Check workload, systems, health, or team dynamics that may be impacting performance. Possible Occupational Health referrals and reasonable adjustments can be suggested here.
   
• Monitor progress regularly: Hold short review meetings with constructive feedback and written summaries.

What are the legal and reputational risks?

Handled poorly, a PIP can create more risk than it resolves. To reduce that risk, employers should be clear, consistent and supportive throughout, while keeping a strong paper trail. A rushed, unclear or heavy-handed process can expose the business to both legal and reputational damage, including unfair dismissal findings and potential Acas Code uplifts.

There is also a risk of discrimination if targets, review methods, or timescales place employees with protected characteristics at a disadvantage, or if reasonable adjustments are not properly considered.

Where the process is connected to whistleblowing or other protected activity, victimisation claims may also arise. In addition, failing to follow contractual terms or internal procedures can weaken both fairness and legal defensibility.

Conclusion

In conclusion, a fair and effective PIP is not about catching someone out, but about giving them a genuine opportunity to improve. Employers who act early, communicate clearly and provide meaningful support are far more likely to achieve better outcomes, whether that is improved performance, a clearer understanding of expectations, or a fair basis for formal action if improvement does not happen.

When done well, a PIP reinforces standards, builds trust, and shows that performance concerns can be managed in a way that is both legally defensible and supportive.

Further Advice

If you have any queries on PIP’s or any other employment-related matters, our Peace of Mind Team is here to provide expert guidance. Our Document Audit Team can also assist in drafting relevant workplace policies.

Contact our Employment Team by emailing employment@warnergoodman.co.uk or calling 023 8071 7717.

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