Performance management is an ongoing responsibility, but when underperformance arises, it often calls for a more formal approach, like a Performance Improvement Plan (PIP).
While common, poor handling of performance issues can expose your business to serious legal risks, including unfair dismissal, general protections, and bullying claims.
By following a structured performance management process, and using our downloadable PIP template, you can align with procedural fairness, meet your legal obligations, and protect your business from costly mistakes.
Key Steps for Effective Performance Management
1. Document Everything from Start to Finish
Maintain detailed, dated records of:
- Underperformance or misconduct
- Conversations, meeting and support/s provided to the employee
- Written warnings or performance improvement plans
- Employee responses and explanations.
Why it matters: If a claim is later made by an employee, having clear documentation will be critical in defending your decisions.
2. Provide Clear Expectations and Feedback
Set clear performance expectations from the outset and give regular, constructive feedback.
Practical tips:
- Use position descriptions and KPIs as a baseline
- Be specific about the behaviours or outcomes required
- Offer examples of where performance has fallen short and provide opportunity for improvement.
Why it matters: Employees can only improve if they know what is expected and how they are falling short.
3. At Strategic HR- we promote following a process that is in alignment with Procedural Fairness
This means the employer must always ensure the employee has:
- An opportunity to respond to concerns
- Before inviting an employee to respond to concerns or allegations, the employer must first ensure that the option to have a support person has been presented to the employee
- A reasonable time to improve (where appropriate)
Why it matters: The Fair Work Commission looks closely at whether a fair process was followed-not just the outcome.
4. Use a Performance Improvement Plan (PIP) When Appropriate
A structured PIP should:
- Identify specific issues aligned to the employee’s position description
- Outline steps to improve
- Set realistic timeframes
- Include regular review points
Why it matters: Having a PIP can be included as evidence that a fair process has been followed if required to demonstrate to the Fair Work Commission that you gave the employee reasonable opportunity to improve.
5. Communicate with Care and Consistency
Performance discussions should be:
- Professional, not personal or subjective
- Free from bias or assumptions
- Consistent across all employees
Why it matters: Poor communication can lead to claims of bullying, discrimination, or adverse action.
6. Avoid Snap Decisions or Emotional Responses
Never terminate an employee’s employment in the heat of the moment. Even in difficult situations, it is crucial that you take the time to assess and follow the outlined process.
Why it matters: Summary dismissals without process are one of the most common triggers for legal claims.
7. Engage HR or Seek Professional Advice Early
If unsure, get support before action is taken. This can include:
- Conducting a formal investigation or mediation
- Assessing the risk of a claim
- Reviewing internal policies and procedures
Why it matters: Early advice can help you avoid procedural missteps that could later be challenged.
How Strategic HR Can Help
At Strategic HR, we partner with businesses across diverse industries to deliver:
- Practical step-by-step support during performance processes
- Creating and drafting of misconduct letters, PIPs, and meeting scripts
- Independent workplace investigations and mediations
- Tailored training for managers
- Advice on compliance with the Fair Work Act and relevant Modern Award/s
By engaging us, you can focus on fair outcomes while we help protect your business from costly mistakes.
Contact us today if you’re facing a performance issue or want to proactively review your processes.
Download the Performance Improvement Plan (PIP) Template, tailored for Australian employers.
Practical Tips for Implementing a Performance Improvement Plan (PIP)
Performance Improvement Plans (PIPs) are a structured, fair, and legally sound method for addressing employee underperformance. When used properly, they support both the employer and employee by creating clarity, accountability, and the opportunity for improvement-while also protecting your business from future legal risk.
Here’s a practical guide to implementing a PIP effectively:
When to Use a PIP
A PIP should be considered when:
- Informal feedback hasn’t led to improvement.
- There is a pattern of underperformance, not just a one-off issue.
- The issue is not serious misconduct but warrants serious or formal intervention.
- You want to genuinely give the employee an opportunity to improve before further action is taken.
Examples of when a PIP is appropriate:
- Continued missed deadlines or targets
- Frequent and careless errors in work
- Inconsistent quality of outputs against KPIs or role expectations
- Repeated failure to meet expectations, despite coaching and training provided
Before you reach for a PIP: a PIP addresses capability. In other words, the employee is not meeting the expectations and standards of the role. This is an issue of inadequate skills or experience, not an issue with willingness to achieve.
If the issue is about attitude and behaviour, like rudeness, insubordination, breach of policy, dishonesty, that’s a conduct matter, not a performance matter, and a disciplinary process is more appropriate to address this. See how to tell the difference. You can also find answers to common questions in our Performance Management FAQs.
Legal & Procedural Considerations
Before implementing a PIP:
- Review any applicable modern award, enterprise agreement, or employment contract.
- Check whether any protected attributes or circumstances (e.g. illness, disability, carer’s responsibilities) may be contributing to performance concerns.
- Ensure you are not acting in a way that could be perceived as discriminatory or retaliatory.
Pro tip-Strategic HR can assist with pre-assessment to ensure you are legally compliant and procedurally fair.
Steps to Implement a PIP Effectively
1. Prepare Clear Documentation
- Identify specific areas where performance is not meeting expectations.
- Gather evidence such as KPI reports, client feedback, or supervisor notes.
- Using our PIP template, draft your copy, outlining key concerns and expected outcomes.
2. Hold a Formal Meeting
- Arrange to meet privately and professionally with the employee (this is often done with the employee and their direct manager).
- Offer the opportunity for a support person to be present prior to the meeting.
- Explain the reasons for the PIP and clarify it is a supportive measure, not a disciplinary warning (unless otherwise stated).
3. Set SMART Objectives for the PIP
- Specific: Clearly define what needs to improve.
- Measurable: Include quantifiable targets-using real numbers.
- Achievable: Make goals realistic given the timeframes and role.
- Relevant: Focus only on job-related performance areas (refer to employees current Job Description).
- Time-bound: Set a clear duration-usually between 4 to 8 weeks.
4. Schedule Regular Check-Ins
- Agree on dates to review progress (weekly or fortnightly).
- Use these check-ins to provide feedback, support, and adjust expectations if needed.
5. Provide Support and Resources
- Offer coaching, training, or shadowing.
- Identify any tools or information the employee may need to succeed.
- Clarify who to go to for help during the PIP period.
6. End-of-PIP Review
- Conduct a final review meeting.
- Confirm whether objectives have been met or not.
- Decide on next steps: successful completion, extended PIP, redeployment, or further disciplinary action.
Common Mistakes to Avoid at All Cost
- Using a PIP as a fast-track to termination without genuine intent to support employee’s improvement
- Failing to clearly communicate the concerns or expectations for an employee
- Not allowing enough time or feedback for improvement
- Ignoring procedural fairness or acting inconsistently
How Strategic HR Can Help
At Strategic HR, we help businesses implement performance processes that are:
- Fair: Respecting the rights of all parties
- Compliant: With the Fair Work Act 2009 (Cth), applicable Modern Award, and regulations
- Practical: Focused on measurable outcomes and resolution
Whether you need a custom PIP template, help conducting meetings, or strategic advice on managing performance risks, we’re here to guide you through the process.
Contact us today to discuss how we can help you manage underperformance with confidence.
