Performance Improvement Plan Policy Template for India

A performance improvement plan, or PIP, is a structured period in which an employee whose performance falls short receives clear targets, support and regular reviews to reach the expected standard. A PIP policy sets out when a plan may be used, how long it lasts, what it must contain and what can happen at the end. Used properly, it is a genuine chance to improve, not a formality before an exit.

When to use it: Use it after feedback and coaching have failed to close a clear, documented performance gap. It is not for misconduct, and not for employees on probation, who follow the probation policy. HR approves each plan before it is issued, the reporting manager runs it, and a senior manager approves any decision taken at the end.

Performance improvement plan policy template

Copy the text below and replace everything in square brackets with your company details.

1. Purpose

This policy gives employees of [Company Name] whose performance is below the expected standard a fair, structured opportunity to improve, with clear targets, support and regular feedback.

2. Scope

It applies to confirmed employees with a documented performance gap. Misconduct is handled under the Disciplinary Action Policy, and employees on probation follow the Probation Policy.

3. Definitions

Performance improvement plan: a written plan setting targets, support and review dates for a fixed period.
Performance gap: the difference between the expected standard for the role and the employee's actual results or behaviour, supported by evidence.
PIP review: a scheduled meeting to assess progress against the plan's targets.

4. Policy

A PIP is used only after the manager has discussed the gap with the employee and given at least [Number] weeks of informal feedback and support.
A PIP lasts [60] to [90] days, and may be extended once, by up to [30] days, if there is clear progress.
The written plan states the gap with evidence, [3] to [5] specific and measurable targets, the support the Company will provide, the review dates and the possible outcomes.
Targets are realistic for the period and in line with what others in the same role achieve.
The employee may add written comments to the plan before it starts, and an HR representative attends the opening meeting.
A PIP is not a disciplinary penalty, and pay, leave and other terms continue as usual during it.

5. Procedure

At the opening meeting, the manager and HR explain the plan, and the employee signs to confirm receipt, not agreement.
The manager holds reviews every [2] weeks and shares written notes with the employee after each one.
At the final review, the manager assesses each target and recommends an outcome to HR.
Possible outcomes: successful completion, confirmed in writing; one extension where progress is substantial; or, where the standard has not been met, redeployment to a suitable role if one is available, or separation.
Separation after an unsuccessful PIP follows the Termination Policy, including a chance to respond, notice or pay in lieu, and settlement of all dues.

6. Responsibilities

Managers: prepare the plan with evidence, provide the promised support and hold every review.
HR: approve each plan, check targets for fairness, attend key meetings and keep records.
Employees: work towards the targets, use the support offered and raise any obstacles early.

7. Exceptions

Where performance is affected by ill health, a family crisis or a disability, HR will consider adjustments, a pause in the plan, or leave before the plan continues.

8. Review

HR reviews this policy every [24] months, looking at how many plans ended in success, extension or separation, and at any concerns raised by employees about fairness.

What to include

Only for real, documented gaps

Start a PIP only when a gap is backed by evidence and informal feedback has already been given. A PIP out of the blue feels like a verdict, not a plan.

Measurable targets

Write three to five specific targets with numbers or observable behaviours. Vague targets such as improve attitude cannot be reviewed fairly.

Real support

List the training, coaching, tools or workload changes the company will provide. A plan with targets and no support is set up to fail.

Regular written reviews

Hold reviews every two weeks and share notes. They give the employee a fair chance to adjust and give the company a record.

Outcomes stated at the start

Tell the employee at the start what the possible outcomes are, including separation. Surprises at the end lead to disputes.

Health and personal circumstances

Allow a pause or adjustments when illness, disability or a family crisis affects performance. Pressing on regardless is unfair and risky.

Common mistakes to avoid

Using a PIP as paperwork for an exit that has already been decided.
Setting targets that nobody else in the team currently achieves.
Skipping the fortnightly reviews and meeting only at the end.
Putting an employee on a PIP for misconduct that belongs in the disciplinary process.
Ending employment after a PIP without notice, a hearing or settlement of dues.

Run it in ZeniaHR

In Performance, open an ad hoc review cycle for the PIP period with your rating scale, and add the improvement targets as goals typed KPI or task, each with a weight, so weighted progress is visible at every review. If training is part of the support, enrol the employee in the relevant program in Learning. Keep the signed plan, review notes and outcome letter in Employee Documents.

Performance Policy settings Employee records and exits

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Frequently asked questions

What is a performance improvement plan?

A performance improvement plan is a written plan that gives an employee with a performance gap specific targets, support and regular reviews over a fixed period, usually 60 to 90 days. It aims to bring performance up to the expected standard and sets out what will happen if it does or does not improve.

How long should a PIP last?

Usually 60 to 90 days, long enough for measurable improvement in the role. Shorter plans can be unfair for roles with long cycles, such as sales with monthly targets, while very long plans leave the employee in uncertainty. Allow one short extension where there is clear progress.

Can an employee be terminated after a PIP?

Yes, if the employee has not reached the standard despite a fair plan with realistic targets, genuine support and regular reviews. Before deciding, let the employee respond to the final review, consider redeployment, and follow the termination process with notice or pay in lieu and settlement of all dues.

Should an employee sign a PIP?

The employee signs to confirm they have received and understood the plan, not that they agree with it, and can add written comments. If they refuse to sign, note the refusal with a witness and go ahead with the plan, because a refusal does not stop the process.