What is a performance improvement plan (PIP)?

A performance improvement plan (PIP) is fundamentally a formal process aimed at enhancing an employee's job performance when it is not meeting the expected standards. The purpose of a PIP is to provide a structured framework for identifying specific areas where the employee needs improvement, setting measurable goals to achieve within a defined timeframe, and offering support and resources to help the employee succeed.

This approach is critical for both the employee and the organization as it allows for clear communication regarding performance expectations and provides an opportunity for professional development. The PIP typically includes regular check-ins, feedback sessions, and assistance to help guide the employee through the process of improvement.

Other options do not accurately describe a PIP. While financial incentives may play a role in retention strategies, they do not directly address performance improvement; rather, they are tangentially related. Team-building activities focus on enhancing collaboration among employees rather than individual performance. Budget allocation outlines are concerned with financial planning within departments and do not pertain to employee performance metrics or development.