Performance Improvement Plans & Employee Evaluations

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1 Performance Improvement Plans & Employee Evaluations HELPING THOSE WHO HATE HR. 554 Pacific Avenue, York, Pennsylvania

2 Performance Improvement Plans & Employee Evaluations Contents What is a PIP.. Page 3 Developing a PIP. Page 4 Step 1 - Documentation... Page 5 Step 2 Develop an Action Plan.. Page 6 Step 3 Review... Page 7 Step 4 Implementation.. Page 7 Step 5 Follow Up.... Page 8 Performance Reviews Overview... Page 10 Performance Reviews Do s..... Page 11 Performance Reviews Don ts... Page 12 Types of Performance Reviews. Page 13 Numerical Rating Scale Page 14 Objective-Based Review. Page Degree Appraisal.. Page 16 Step 6 Conclusion Page 9 All information in this guide is intended to provide a generalized overview of the Human Resource Area. It is not intended to be used as legal advice for your business. The contents of this guide are intended to convey general information only and not to provide legal advice or opinions. No action should be taken in reliance on the information contained on this . An attorney should be contacted for advice on specific legal issues. Should your business have any legal questions regarding Human Resource issues, you should contact a Lawyer to help you. Ph kellie@alternative-hr.com All rights reserved Alternative HR LLC 554 Pacific Avenue York, Pennsylvania

3 What is a PIP? A performance improvement plan (PIP), also known as a performance action plan, is a great way to give struggling employees the opportunity to succeed while still holding them accountable for past performance. It is not always clear why their performance is on the decline. Was it due to inadequate training? Does the employee have a clear understanding of the expectations for their role? Are there other hidden issues? A performance improvement plan opens the door for communication and feedback from the employee as to why their performance may be lacking.

4 Developing a PIP When developing a performance improvement plan, communication is key. It is important that the plan allows for questions and concerns to be addressed up front, and sets the ground work for how the plan will be implemented going forward. Some items to consider when developing a PIP include: Length of time that may be needed for the employee to improve their performance (2 weeks or 90 days?) PIPs should also allow for the supervisor to include positive reinforcement, not solely focus on the negative aspects of the employee s performance. We recommend starting and ending the conversation on positive notes. Clear, measurable objectives should be included in the plan along with a clear timeline outlined for each objective. Details on the performance issues that need to be improved ( Employee must be on time for work for the next 60 days ) rather than just employee must improve on tardiness. The supervisor and/or manager will have responsibilities, as well. For instance, if the employee needs additional training, the supervisor will be responsible for making sure that takes place, whether outsourced or done internally. Performance issues can be a difficult thing to address and overcome, but the development of a PIP will show the struggling employee that you, the employer, are willing to work with them and help them to be successful I their position. When the plan is developed, there are six steps to ensure that an effective and complete plan is developed: Document Develop Review Implement Follow Up Conclusion

5 Documentation The first step is to document all performance issues. Documentation is key in all situations, but when it comes to performance issues, having documentation on when the issues began and how they have changed over time will help establish a more comprehensive plan.

6 Develop an Action Plan The second step is to develop an action plan for improvement. The action plan is something that can be adjusted based on feedback from the employee and should be a collaborative effort. This will help to identify questions and confusion upfront and encourages ownership of the issue by the employee. The action plan should include specific and measurable objectives that are attainable, relevant and time based (also known as SMART goals). It may be helpful when developing the action plan to use the job description and any relevant HR policies to clearly identify the issues and expectations. The action plan is also when a supervisor should look at any additional resources that may be needed to help the employee succeed. These resources could include additional training or coaching. The plan should also outline exactly what the supervisor and/or manager will do to assist the employee in achieving these goals. It is also important to make sure the action plans sets the performance expectations and includes a statement about what the consequences will be if the objectives are not met. If termination is possible, it should be clearly communicated in the plan.

7 Review and Implementation The third step in developing the performance improvement plan, is to review the plan with your manager or HR professional. Reviewing the document with a third party to ensure that the information within the document is clearly stated and free of any emotion. The fourth step is to meet with the employee and clearly lay out the areas for improvement and the plan of action going forward. This is also the time to allow the employee to give their feedback on the plan, and there may be a need to alter the plan depending on the employee s feedback and questions. Once all the changes have been made and the plan is clear to all parties, both the supervisor and the employee should sign off on the plan. Both parties will receive a written copy of the plan. Any follow up meetings should also be scheduled at this time.

8 Follow Up The fifth step of the performance improvement plan process is follow up. Regular follow up meetings should be established and scheduled, and the progress of the plan will be discussed. We recommend having follow up meetings roughly every two weeks. Document any updates to the plan and the progress that is being made toward the objectives. It is important to allow the employee the opportunity to ask any questions they may have and for them to feel open to ask for additional help if they need it. It is also important to recognize any progress and improvements that are being made. By recognizing this, the employee will be motivated to continue to improve and reach the goals outlined in the plan.

9 Conclusion The final step is the performance improvement plan conclusion. If the plan does not seem to be working, then it is the supervisor s responsibility to end the performance improvement plan and move forward with the consequences that were outlined in the plan. If the employee has met all of the goals and their performance has improved, the supervisor should close the performance improvement plan and allow the employee to continue in their current position. It is important that the employee understand that even though their performance improvement plan has closed, continued positive performance is expected. During this process, open and frequent communication is critical to the success of the employee. Making sure that you, as the supervisor, are clear in your expectations and ensuring that your employee is clear in their understanding will make the performance improvement process easier for all parties involved. After a PIP has been closed, it should be filed in the employee s personnel record.

10 Performance Reviews Performance reviews are important for ensuring that employees are successfully meeting their job requirements, identifying under-performance and providing employees with an opportunity to raise any concerns they may have. Effective performance evaluations should align employees development and professional growth with that of your business. Employees are generally more productive and motivated when they understand the role their contributions play in achieving the company s, along with their own, goals and objectives. The performance review process can be a great way to strengthen the relationship between a manager and employee by promoting open communication in a relaxed environment. It s important to keep the following do's and don'ts in mind to minimize the stress level for both employees and their managers, as well as maximize the effectiveness of your performance review process.

11 DO: Base the review off an accurate job description. If the job description needs updated, bring to HR and/or your Supervisor. Have an effective plan in place to cut down on the time it takes to complete the reviews. This could mean keep an excel spreadsheet with the positive things they have done throughout the year in one column and the opportunities for improvement in another. Then you will not be scrambling to come up with feedback at the review time. Make sure the employee being reviewed understands the feedback. Use SPECIFIC examples to relay your point with factual data when possible. (For example, You were late 5 times in the last 90 days, which really impacts the ability of the team to get the job done instead of frequently late. ) Help employees when setting their performance goals. Ask what you can do to help them reach those goals and keep track throughout the evaluation period. Also request the employee complete a self-evaluation ahead of time, so it will be known if the parties are not on the same page (i.e. they think they are an excellent performer and the supervisor thinks otherwise.) This will allow the supervisor or manager to better prepare for the conversation. If you are concerned about how the meeting will go when a particularly thorny issue is brought up, invite a representative from HR to attend the meeting as a calming agent and witness.

12 DON T Rate on items that have no impact to the organization or the position. Use personal preferences or feelings when completing or conducting the review. Performance reviews are based on the employee s performance in the position, not how much you, as the supervisor, like or dislike that employee. Do treat the meeting as a focused business meeting. Small talk is fine to break the ice but do not bring up topics that can divert the focus of the meeting. Don t seat yourself in a position in between the employee and the door. Don t wait until, or use the appraisal meeting to inform an employee of unsatisfactory performance requiring disciplinary action. Timely feedback is important. Don t debate. Keep control of the meeting and reign in discussion. As the manager, you have the final word and if you have been fair in your assessment you must stand by your rating. If the employee presents new information, thank them for bringing it to your attention, request documentation and inform him/her that you will consider this information and if warranted, make an adjustment. Do not commit to making any adjustments to the evaluation rating.

13 Types of Performance Reviews You already know that employee evaluations are a critical component of running nearly any business and having an effective measurement system in place helps you recognize worker achievements, objectively compare multiple employees and identify areas where improvement is needed. The question is, How do you select an effective system that fits your company s specific needs? To answer this question, let s go over three popular types of employee performance evaluations and the advantages each offers.

14 Numerical Rating Scale Due to its simplicity, this is one of the most widely used systems and tends to be highly effective. It s also popular because it allows employers to measure employee performance on a plethora of areas such as teamwork, communication skills and reliability. A numerical rating scale is beneficial because a business can customize the system to rate whatever employee traits or characteristics it deems as important. This commonly involves rating individuals on a (1 to 5) or a (1 to 10) scale with lower numbers being unsatisfactory and higher numbers being satisfactory. In turn, employers can use tangible data to determine is an employee s performance is poor, average, good or excellent and award any potential merit increases to this data.

15 Objective-Based This is another simplistic evaluation system and is a clear-cut way to track progress. In an objective-based evaluation, an employer and employee will agree upon a specific goal for the employee to meet coupled with a deadline. If the employee meets the objective, then is speaks highly of them and vice versa. This is perhaps the most black and white of all systems and is a practical way to monitor the overall success of employees. Managers can award bonuses and/or merit increases if an employee meets the objective.

16 360-Degree Appraisal If you re looking for comprehensive feedback on an employee s performance to form in-depth insights, then this is the way to go. A 360-degree appraisal works by gathering feedback from multiple parties such as managers, coworkers, customers and even vendors. The more information you collect, the more accurate the performance review becomes and the more the picture comes into focus. Although this form of evaluation is somewhat laborious and time consuming when compared to the first two techniques, many employers prefer it because of the unbiased data they receive and the multi-dimensional vantage point it creates.