UK Performance Improvement Plan Guide

Our performance improvement plan guide starts with getting one thing straight: its real purpose. A PIP is a formal, supportive document designed to help a struggling employee find their footing again. It’s about outlining specific performance gaps, setting crystal-clear goals, and providing a structured timeline for improvement.

A well-handled PIP is first and foremost a tool for recovery, not just a tick-box exercise on the way to dismissal.

What Is a Performance Improvement Plan?

Let’s be honest, the term ‘Performance Improvement Plan’ (or PIP) can make even the most seasoned employee’s blood run cold. It’s often seen as the last stop before the exit door, a formality before termination. But that’s a huge misconception.

At its core, a PIP is a structured coaching tool. Think of it as a formal, documented process meant to tackle specific performance problems head-on and give someone a clear, supportive path to getting back to their best.

Imagine a star athlete who’s hit a rough patch. They aren’t just dropped from the team. Instead, they get a specialised training regimen, one-on-one coaching, and clear milestones to hit. A PIP does the same for an employee, giving them a structured chance to understand where they’re falling short and work with their manager to close those gaps.

When to Use a Performance Improvement Plan

Knowing the right moment to introduce a PIP is half the battle. It isn’t a silver bullet for every workplace problem. A PIP really shines in specific situations where an employee’s performance is the issue (not their conduct), and you genuinely believe they can turn things around with the right support.

It’s time to consider a PIP when:

• Informal coaching hasn’t worked: You’ve already had a few chats and offered verbal guidance, but the performance issues just aren’t going away.
• Targets are consistently missed: The employee is regularly failing to meet key performance indicators (KPIs) or objectives that are fundamental to their job.
• Work habits are affecting the team: An employee’s poor time management, communication, or organisation is dragging down colleagues or project outcomes.
• Someone is struggling after a promotion: An employee has moved into a new role and needs extra, structured support to get up to speed with new expectations.

When a PIP Is Not the Right Tool

It’s just as important to know when a PIP is the wrong tool for the job. Using it in the wrong situation can backfire, creating legal headaches and undermining its real purpose. For example, a PIP is absolutely not a replacement for disciplinary action when dealing with gross misconduct.

To help you decide, here’s a quick guide on choosing the right approach for common performance issues in the UK.

Choosing the Right Action for Performance Issues

Scenario	Recommended Action	Reasoning
An employee is consistently late for work.	Informal Warning, then Disciplinary Process	This is a conduct issue (breach of contract/policy), not a performance one. A PIP is for skill or capability gaps.
A salesperson misses their quarterly target for the first time.	Informal Coaching / One-to-One Meeting	A single dip doesn’t warrant a formal PIP. Start with a supportive conversation to understand the reasons.
An employee is caught falsifying expense reports.	Immediate Disciplinary Investigation	This is gross misconduct. A PIP is entirely inappropriate and fails to address the severity of the act.
A team member’s work quality has slowly declined over several months, despite verbal feedback.	Formal Performance Improvement Plan (PIP)	This is a classic PIP scenario: a persistent performance issue where informal methods have failed.
An employee is accused of bullying a colleague.	Grievance and/or Disciplinary Procedure	Bullying and harassment are serious misconduct issues that must be handled through formal, established procedures.

This table should help clarify that issues like theft, harassment, or a major breach of company policy need an immediate and formal disciplinary process. Trying to manage these with a PIP sends the wrong signal and doesn’t properly address the seriousness of the misconduct.

A Performance Improvement Plan should be a bridge to better performance, not a plank to walk. It is a collaborative effort to rebuild skills, clarify expectations, and restore an employee’s contribution to the team.

The goal of this guide is to demystify these distinctions, giving managers the confidence to choose a course of action that is both fair for the employee and effective for the business.

Navigating UK Employment Law and ACAS Guidelines

When you put an employee on a performance improvement plan in the UK, you’re doing more than just managing performance. You’re stepping into a legal framework that has real teeth. Get it wrong, and you could find yourself facing a costly unfair dismissal claim at an employment tribunal. It’s absolutely vital to understand your obligations to protect both your employee and the business.

Think of a well-handled PIP as your best evidence of being a fair and reasonable employer. But its strength hinges entirely on following the proper procedures, which in the UK are shaped significantly by the Advisory, Conciliation and Arbitration Service, better known as ACAS.

The Role of the ACAS Code of Practice

Now, a PIP isn’t technically a disciplinary action on its own. It’s meant to be supportive. However, let’s be realistic – if the performance doesn’t pick up, the path often leads towards disciplinary steps. This is where the ACAS Code of Practice on disciplinary and grievance procedures becomes essential reading.

You can’t be sued simply for not following the Code, but it casts a very long shadow over tribunal proceedings.

An employment tribunal has the power to increase or decrease compensation by up to 25% if it finds an employer unreasonably failed to follow the ACAS Code. Suddenly, it’s not just about best practice; it’s a serious financial risk.

Following the Code boils down to being fair, consistent, and transparent. A tribunal will scrutinise your actions through the lens of ‘reasonableness’. A carefully documented PIP that aligns with ACAS principles is your proof that you’ve acted properly and given the employee a genuine chance to get back on track.

Key Legal Considerations for Your PIP Process

To make sure your PIP is legally sound, there are a few non-negotiables you need to build into your process from day one.

• The Right to Be Accompanied: If a PIP meeting might result in a formal warning or another disciplinary outcome, the employee has a legal right to bring someone with them. This can be a colleague or a trade union representative. You must inform them of this right in writing ahead of the meeting. It’s a fundamental step.
• Thorough and Objective Documentation: This is crucial. Every meeting, every observation, and every bit of feedback needs to be written down. Steer clear of subjective comments like “has a bad attitude.” Instead, stick to the facts. For example: “On three separate dates in May, the Project X report was submitted after the 5 p.m. deadline, which delayed the client review call.” This kind of evidence is your best defence if a claim ever arises.
• Reasonable Adjustments for Disabilities: Under the Equality Act 2010, if an employee has a disability, you are legally required to make reasonable adjustments. This isn’t optional. It could involve changing their targets, providing specialist software, or offering a different work pattern. Overlooking this can easily lead to a discrimination claim.

Handling Data and GDPR Compliance

A PIP document is, by its nature, full of sensitive personal data. It details an employee’s performance, their struggles, and areas for development. Under the UK General Data Protection Regulation (GDPR), you have a strict legal duty to manage this information correctly.

In practice, this means:

1. Limit Access: Keep the circle tight. Only people who absolutely need to see the PIP documents—the line manager, HR, and the employee themselves—should have access.
2. Store It Securely: Whether it’s in a locked filing cabinet or a password-protected folder on your server, keep it safe. Using a dedicated HR system, like Dynamics 365 Human Resources, is a great way to manage this securely.
3. Don’t Keep It Forever: Have a clear policy for how long you hold onto PIP records. You can’t just keep them indefinitely; they should only be retained for as long as is necessary.

By making legal compliance a cornerstone of your PIP process, you shift it from being a potential minefield to a structured, fair, and legally defensible tool for managing your team.

How to Set Clear SMART Objectives for a PIP

Vague goals are the enemy of a good Performance Improvement Plan. Telling someone to ‘improve client communication’ is like telling a ship’s captain to ‘sail better’ – it’s completely subjective and impossible to measure. It leaves both the employee and manager adrift, with no clear idea of what success actually looks like.

A solid PIP doesn’t just point out problems; it lays down a clear, agreed-upon roadmap to the solution. This is where the SMART framework comes in. It’s the tool that turns foggy feedback into concrete, actionable objectives, leaving no room for crossed wires.

Think of each goal as a checkpoint on a journey, not a hazy destination on a blurry map. The SMART model makes sure every objective is solid and fit for purpose.

What Does SMART Actually Mean?

The real strength of SMART objectives is in their structure. Each letter represents a vital ingredient that, when combined, creates a clear picture of what needs to be done, how you’ll measure it, and by when.

Here’s the breakdown:

• Specific: The goal has to be crystal clear. What exactly needs to get better? Instead of “get better at reports,” a specific goal is “reduce the number of formatting errors in weekly financial summaries.”
• Measurable: How will you track progress and know when the finish line is crossed? You need numbers. For instance, “achieve a client satisfaction score of 90% or higher.”
• Achievable: Is the goal actually realistic? You have to consider the employee’s current skills, the resources you can offer, and the timeline. Setting an impossible target just sets them up to fail and kills motivation.
• Relevant: Does this goal directly connect to the employee’s role and the performance issues you’ve identified? It has to matter to their job and contribute to the team’s wider goals.
• Time-bound: Every objective needs a deadline. A clear start and end date create a sense of focus and provide a definite point for the final review.

The SMART framework takes all the guesswork out of the PIP process. It shifts a tough conversation about underperformance into a practical, forward-looking discussion about specific, achievable targets.

From Vague to Actionable: A Real-World Example

Let’s see this in action. We’ll take a common piece of vague feedback for a UK-based project coordinator and give it the SMART treatment.

Vague Goal: “You need to be more organised with project deadlines.”

This is pretty unhelpful. What does “more organised” even mean? How would anyone measure it? It’s a dead end.

Now, let’s rebuild it using the SMART framework.

SMART Objective:
“Over the next 60 days (Time-bound), you will use the agreed project tracking template for all your assigned projects. You’ll make sure all key project milestones are updated in the system by 4 p.m. every Friday, with zero missed updates (Specific and Measurable). This is to ensure the senior leadership team has accurate data for their Monday morning review calls (Relevant). To help you get there, we’ll set up a two-hour training session on the new template (Achievable).”

See the difference? This version is clear, fair, and gives a precise benchmark for success. The employee knows exactly what to do, when to do it by, and why it’s important.

Why Collaboration and KPIs are Non-Negotiable

Setting these objectives shouldn’t be a one-sided affair. It’s absolutely crucial to involve the employee in the process. When people have a hand in shaping their own targets, they feel a much stronger sense of ownership and are far more invested in hitting them. This collaborative spirit is a core principle of knowing how to improve employee engagement, even during a challenging time.

And this isn’t just theory; it works in practice. In the UK public sector, PIPs are a critical accountability tool. A recent review revealed that by the end of the year, an impressive 77% of performance improvement actions were either achieved or on track, with only 2% failing to meet their objectives. This success is directly linked to the careful tracking of Key Performance Indicators (KPIs), where even a 1% margin is watched closely. You can dig into these findings in the Belfast City Council’s performance report.

By defining clear KPIs and building the plan together, you turn a PIP from a top-down mandate into a shared roadmap for getting back on track.

Your Step-By-Step Guide to the PIP Process

Putting a Performance Improvement Plan into action can feel like a minefield. But if you break it down into a clear, manageable process, a lot of that uncertainty melts away. This isn’t just about having one tough conversation; it’s a structured journey with distinct phases, and each one needs to be handled with care and professionalism. Get it right, and you have a process that’s fair, transparent, and legally sound.

Think of this guide as your roadmap for running a PIP that actually works, taking you from the initial evidence-gathering right through to the final review. Following these stages keeps things consistent and gives your employee the best possible chance to turn things around.

The infographic below really nails down how crucial SMART goals are to this whole process. It shows you how to build a clear, structured, and time-bound path for improvement.

As you can see, each part of the framework builds on the last, transforming vague feedback into a concrete plan that both you and your employee can actually follow.

Phase 1: Gathering Objective Evidence

Before a meeting is even on the horizon, your first job is to build a case with facts, not feelings. Vague feedback like “your work has been sloppy” is not only unhelpful, it’s almost impossible to defend. You need to focus on specific, documented examples of where things are going wrong.

This is the bedrock of the entire plan. Your evidence has to be impartial and concrete.

• Quantitative Data: Pull together the hard numbers. This could be missed sales targets, project deadlines that have slipped, or customer satisfaction scores that have dipped below the agreed standard.
• Qualitative Observations: Note down specific instances, complete with dates and details. For example, “On 15th May, the client report was submitted with three major data errors that a colleague had to correct.”
• Previous Feedback: Go back through your notes from one-to-ones or any informal chats where you’ve raised these issues before. This shows you’re not springing this out of nowhere and that you’ve already tried to offer support.

Phase 2: Conducting the Initial Meeting

This is often the trickiest part of the whole process. Your aim here is to be clear, calm, and constructive. It’s crucial to frame the conversation as a collaborative effort to get performance back on track, not as a disciplinary hearing. A well-handled discussion at this stage sets a positive tone for everything that follows.

Here’s a simple structure for that conversation:

1. State the Purpose Clearly: Start by explaining that you want to discuss some performance concerns and introduce a plan to support them in improving.
2. Present the Evidence: Calmly walk through the specific, factual examples you’ve collected. Stick to the facts and steer clear of emotional language.
3. Introduce the PIP Document: Talk them through each section of the plan—the SMART objectives, the timeline, and the support you’re committing to provide.
4. Invite Questions and Discussion: Give them plenty of time to respond, ask questions, and share their side of the story. This has to be a two-way conversation.
5. Confirm Understanding: Make sure they’re clear on what’s expected and what the next steps are. Let them know they don’t have to sign it right there and can take some time to review it.

Phase 3: Managing the Plan with Regular Check-ins

A PIP isn’t a “set it and forget it” document. The follow-up is where the real work happens and progress is made. Regular, scheduled check-ins are absolutely vital for tracking how things are going, offering support, and giving timely feedback. These meetings keep the plan alive and show you’re serious about helping the employee succeed.

Book in weekly or bi-weekly meetings to review progress against their objectives. Keep these meetings focused, and make sure you document the key discussion points and any actions you both agree to. Remember, this kind of structured follow-up is also crucial if an employee is on a formal trial; you can find out more about managing expectations in our guide to the probation period employment process.

The consistency of your check-ins sends a powerful message. It shows you are actively invested in their improvement, transforming the PIP from a static document into a dynamic coaching tool.

Phase 4: Holding the Final Review

When you reach the end of the agreed timeline, it’s time for a final review meeting to decide on the outcome. This meeting needs to be just as well-prepared as the first one, based entirely on the evidence you’ve gathered during the check-in period.

You’re typically looking at one of three outcomes:

• Success: The employee has consistently met their objectives. The PIP is officially closed, and they return to the standard performance management cycle.
• Partial Improvement: They’ve made some progress, but haven’t quite hit all the targets. In this case, you might decide to extend the PIP for a short, defined period.
• No Improvement: The objectives haven’t been met. At this point, you have to consider what comes next, which could mean disciplinary action or dismissal, always making sure you follow fair and legal procedures to the letter.

How to Handle Difficult PIP Conversations

Let’s be honest: nobody looks forward to having a PIP conversation. No matter how well you’ve prepared the paperwork, the success of the entire plan often hinges on this initial chat. It can feel like walking on eggshells. Your job is to deliver a serious message with genuine empathy, turning what could be a confrontation into a constructive, two-way discussion.

Getting this right is a real skill. It’s all about framing the PIP as a structured support system, not a disciplinary action. When you position it as a tool to help your employee get back to their best, you build trust and show you’re invested in them, even when their performance is under the microscope.

Setting a Constructive Tone from the Start

Your tone and the words you choose are absolutely crucial. This first meeting sets the stage for the whole PIP period. You need to walk in calm, professional, and genuinely supportive. If you start with accusatory or negative language, you’ll immediately put the employee on the defensive, and the conversation will be over before it’s even begun.

Instead of jumping straight into the problem, try starting by reaffirming their value to the team. A simple statement expressing your desire to see them succeed can completely change the dynamic of the meeting.

Think of the PIP as a structured coaching plan, not the first step towards the door. This shift in mindset changes the conversation from ‘me versus you’ to ‘us working on this together’.

And a practical point: always hold this meeting in a private, neutral space. Booking a room where you won’t be interrupted shows respect for the employee and the gravity of the discussion.

What to Say and What to Avoid

Clarity and directness are your best friends here, but they need to be balanced with empathy. When you’re giving feedback, stick to specific, observable examples of behaviour and their impact. Never make it about personality traits or assumptions about their attitude.

Here’s a quick guide to help you phrase things effectively:

What to Say:

• “The reason we’re meeting today is to talk through some challenges with performance and, importantly, to agree on a plan to help you get back on track.” (This is clear, direct, and supportive.)
• “I’ve noticed that in the last quarter, three of your five project deadlines were missed. Let’s dig into what might be causing that.” (It’s factual, specific, and opens up a discussion.)
• “We want to support you through this. This plan includes bi-weekly check-ins with me and we’ve also arranged access to a project management course.” (This shows you’re providing tangible support.)

What to Avoid:

• “We need to talk about your bad attitude.” (This is vague, personal, and will only cause resentment.)
• “If you don’t sort this out, you’re out.” (Threats are demotivating and completely unhelpful.)
• “Everyone else on the team is managing, so why aren’t you?” (Comparisons are unfair and crush morale.)

The way we manage performance is also changing. Recent reports on UK workforce trends show that employee wellbeing and mental health are major priorities for businesses. At the same time, new legislation like the Employment Rights Bill is putting a greater emphasis on flexibility and fairness. This means our PIPs have to be more holistic. For a deeper look at how these factors are shaping official strategies, you can explore insights from the Lisburn & Castlereagh City Council’s plans.

Encouraging a Two-Way Dialogue

Finally, and this is critical, a PIP conversation must not be a monologue. Once you’ve explained the plan and the reasons behind it, you need to stop talking and start listening. Give the employee plenty of time to process what you’ve said, ask questions, and share their side of the story.

There might be valid reasons for their dip in performance that you’re completely unaware of—perhaps the expectations were unclear, they’re missing key resources, or they’re dealing with personal issues. By listening actively, you not only get the full picture but also show that you respect them as an individual. This collaborative spirit is what makes a performance improvement plan guide actually work in the real world.

Bringing Your PIP Process into Dynamics 365

Trying to manage a Performance Improvement Plan with a mix of spreadsheets, Word documents, and stray emails is a recipe for disaster. It’s not just inefficient; it’s a genuine risk. With UK GDPR in mind, scattered sensitive employee data is a compliance headache waiting to happen.

This is exactly why moving the whole process into a secure, central system like Microsoft Dynamics 365 and the Power Platform makes so much sense. For UK businesses, it’s a way to get a firm grip on the PIP process, ensuring everything is handled securely, efficiently, and with a clear audit trail. By keeping it all within your company’s Microsoft environment, you’re already a step ahead on data protection.

Building a Secure and Compliant Foundation

The first step is to stop relying on local files and create a single, secure home for all PIP data. You can do this by setting up a custom table in Dataverse. Think of it as your definitive, access-controlled record for everything related to performance improvement.

This isn’t just a digital filing cabinet. It’s a structured system where you can properly track:

• Clear Objectives: Log every goal, its deadline, and how success will be measured.
• Meeting Records: Document the details of every check-in and review, creating a timeline of support.
• Final Outcomes: Record the result, whether the employee got back on track or another decision was made.

This approach locks down sensitive information, making sure it’s only seen by the line manager, HR, and anyone else with a legitimate need to know. It’s a practical way to meet your GDPR obligations. You can explore more about how this works within the broader HR ecosystem in our guide to https://www.dynamicshub.co.uk/2025/11/04/dynamics-365-for-hr/.

By moving PIP documentation into Dataverse, you transform it from a collection of scattered files into a secure, structured asset. This provides a clear, defensible record of the fair and supportive process you have followed.

Automating the Process and Seeing the Bigger Picture

Once your data is in one place, you can start making the process work for you. Using Power Automate, you can build simple flows that send automatic reminders to managers and employees about upcoming meetings. It’s a small change, but it removes the need for manual chasing and keeps everyone accountable.

Better yet, you can connect Power BI directly to your Dataverse table. This lets you build confidential dashboards for HR leaders, giving them a high-level view of what’s going on. You can finally answer questions like: “What are our PIP success rates by department?” or “Are there common performance issues we need to address with better training?”. It turns a purely reactive task into a strategic, data-informed part of your HR function.

Answering Your Performance Improvement Plan Questions

Even with the best guidance, it’s natural for questions to pop up when you’re dealing with something as sensitive as a Performance Improvement Plan. Let’s tackle some of the most common queries we hear from managers and employees across the UK, giving you straight, practical answers to navigate the process confidently.

Can an Employee Refuse to Sign a PIP?

Yes, they absolutely can. The first thing to understand is that their signature isn’t an admission of guilt. It’s simply an acknowledgement that they’ve received the plan and that you’ve discussed it with them. It is not an agreement with the performance issues you’ve raised.

If someone refuses to sign, don’t make it a battle. Simply make a note on the document itself, stating the employee declined to sign on that date. It’s always a good idea to have a witness, like someone from HR, who can also sign to confirm the plan was given and explained. The lack of a signature doesn’t stop the process; the PIP is still active, and you should carry on as planned.

What Happens When a PIP Ends?

Once the PIP’s timeline is up, you’ll hold a final review meeting to go over the results. This isn’t about gut feelings; it’s a formal assessment based on all the evidence and progress you’ve been tracking during the regular check-ins.

You’re generally looking at one of three outcomes:

1. Successful Completion: Great news! The employee has hit the targets laid out in the plan. You can officially close the PIP, document the success, and return them to the normal performance management cycle.
2. Partial Improvement: They’ve made some progress, but haven’t quite met all the standards consistently. In this case, you might decide to extend the PIP for another short, clearly defined period to give them a final push.
3. No Improvement: If, despite all the support, the employee hasn’t met the objectives, the business has to decide on the next steps. This could lead to disciplinary action or even dismissal, but you must ensure you follow a fair and legally sound process every step of the way.

Is a PIP a Legal Requirement Before Dismissal?

Here’s a common misconception. In the UK, no law explicitly says you must use a PIP before dismissing someone for poor performance. However, and this is a big “however,” dismissing an employee without following a fair process is a surefire way to risk an unfair dismissal claim at an employment tribunal.

A well-documented PIP is one of the strongest pieces of evidence an employer can have. It shows you acted reasonably, clearly told the employee what was wrong, and gave them a genuine chance and support to get back on track.

Following a structured process like a PIP is a huge part of complying with the ACAS Code of Practice, which tribunals look at very closely when deciding if a dismissal was fair.

How Long Should a Performance Improvement Plan Last?

There’s no magic number, but a typical PIP in the UK runs for between 30 and 90 days. The key is that the timeframe must be reasonable. It has to give the employee a realistic chance to show they can improve and sustain that improvement.

The right duration really depends on the issue. If it’s about correcting a simple procedural mistake, 30 days might be plenty. But if you’re trying to develop a complex skill or change a long-standing habit, you’ll likely need closer to 90 days. The most important thing is to set the timeline from the start and make sure it’s genuinely achievable.

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For expert guidance on implementing effective performance management strategies within your organisation, phone DynamicsHub on 01522 508096 today or send us a message.