Sales glossaryPIP (Performance improvement plan)

What does PIP (performance improvement plan) mean in sales?

Busy? Here's the short answer:

PIP stands for "Performance Improvement Plan." It's a structured process used by employers to help employees who are not meeting expectations. The plan sets clear goals and provides support to improve performance, but it can also lead to further actions if improvement doesn't happen.

What is a PIP (Performance Improvement Plan)?

A Performance Improvement Plan (PIP) is a structured process used by employers to help employees who are not meeting performance expectations. It is designed to give struggling employees a clear path for improvement, providing them with specific goals and support to enhance their job performance. However, if the employee fails to show improvement within the designated timeframe, it may lead to further actions, including termination of employment.

Key Takeaways

  • PIP is a formal plan used to address performance issues with employees.
  • It outlines clear performance goals and expectations for improvement.
  • PIP provides a supportive framework to help employees succeed.

Understanding the Performance Improvement Plan (PIP) Process

Step 1: Identification of Performance Issues

The first step in the PIP process is identifying the specific performance issues of the employee. This could include problems with meeting deadlines, a decline in productivity, or failing to meet quality standards. The issues are documented and communicated to the employee, making them aware of the need for improvement.

Step 2: Development of the PIP

Once the performance issues are identified, the employer, together with the employee and possibly HR personnel, develops the Performance Improvement Plan. The PIP outlines the areas that need improvement, sets measurable goals, and defines a timeline for achieving those goals. The plan should be fair, realistic, and attainable, taking into account any external factors that may impact the employee's performance.

Step 3: Providing Support and Resources

During the PIP, the employee receives support and resources to aid them in meeting the improvement goals. This could involve additional training, mentoring, or coaching sessions. Regular feedback and communication between the employee and their supervisor are crucial to monitor progress and make necessary adjustments to the plan.

Step 4: Monitoring and Evaluation

Throughout the PIP, the employee's performance is closely monitored and evaluated against the agreed-upon goals and expectations. Regular check-ins provide an opportunity to discuss challenges and successes, identify any roadblocks, and offer solutions to help the employee succeed.

Step 5: Outcome and Next Steps

At the end of the PIP period, the employee's performance is reassessed. If the employee has met the performance goals and demonstrated improvement, the PIP may be considered successful, and the employee can continue with their regular duties.

However, if the employee has not made sufficient progress or failed to meet the goals outlined in the PIP, the employer may need to take further action, which could include termination of employment.

Real-Life Example: Sarah's PIP Journey

Let's consider a real-life example of Sarah, a sales executive at a software company, who was struggling to meet her sales targets. Her manager noticed a decline in her performance over the past few months and decided to implement a PIP to support her improvement.

  • Step 1: Identification of Performance Issues: Sarah's manager identified that her sales numbers had been consistently below the team average and set specific sales targets for her to achieve.

  • Step 2: Development of the PIP: Together with HR, Sarah's manager created a detailed PIP that included targeted sales goals for the next three months.

  • Step 3: Providing Support and Resources: Sarah was provided with additional sales training and assigned a mentor to help her improve her sales techniques.

  • Step 4: Monitoring and Evaluation: Weekly meetings were scheduled to review Sarah's progress, discuss challenges, and offer guidance.

  • Step 5: Outcome and Next Steps: At the end of the three-month PIP period, Sarah had made significant progress and achieved her sales targets. The PIP was considered successful, and Sarah continued as a valuable member of the sales team.


Q1: Is being placed on a PIP a bad sign?

Being placed on a PIP does not necessarily mean termination. It is an opportunity for improvement and growth, with the support of the employer.

Q2: Can an employee appeal a PIP?

Yes, employees may have the option to appeal a PIP if they believe it is unjust or unfair.

Q3: How long does a PIP typically last?

The duration of a PIP can vary depending on the complexity of the improvement goals, but it is usually around 30 to 90 days.

In conclusion, a Performance Improvement Plan (PIP) is a tool used by employers to support employees who are struggling to meet performance expectations. It offers a structured approach to help employees improve their performance and succeed in their roles, leading to a more engaged and productive workforce.

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