How should a performance improvement plan work?
There is no statutory definition of a performance improvement plan (PIP). Acas guidance says that, if informal steps do not work, a PIP should set specific objectives, a reasonable timeline and any support or training needed, be discussed with the employee and confirmed in writing, and make clear what happens if performance does not improve.
Where a PIP fits
No Act of Parliament defines or requires a PIP. Acas describes it as a step employers could consider if informal steps to improve performance have not worked, and notes it is sometimes called a training or development plan.
Acas recommends that employers first try to understand why there is a problem, and whether it is about capability (the ability to do the job) or conduct (behaviour), because that affects how to respond.
What Acas says a PIP should contain
Acas advises discussing the plan with the employee so they understand it, sharing a written record, and keeping a record of performance conversations.
- Specific objectives for the employee
- A reasonable timeline to meet them
- Any further support or training the employee needs
- What will happen if the required improvement is not made, such as an extension to the timeline or a final written warning
Fair procedure and the Acas Code
The Acas Code of Practice on disciplinary and grievance procedures covers poor performance as well as misconduct. Employers with a separate capability procedure should still follow the Code's basic principles of fairness. Tribunals take the Code into account and can adjust awards by up to 25 per cent for unreasonable failure to follow it.
Under the Employment Rights Act 1996, capability is a potentially fair reason for dismissal. Acas says dismissal should be a last resort, and that evidence such as fair performance reviews and PIPs showing a failure to improve may be needed.
Disability and reasonable adjustments
Acas notes that what looks like a performance or conduct issue may be linked to a disability. Employers must make reasonable adjustments for disabled employees, and should consider this before taking formal action.
The law
“relates to the capability or qualifications of the employee for performing work…”
“increase any award it makes to the employee by no more than 25%…”
Sources
- Problems with an employee's performance · Acas
- Dismissals for capability or conduct · Acas
- Code of Practice on disciplinary and grievance procedures · Acas
- Plan to Make Work Pay and Employment Rights Act: timeline update · GOV.UK
General information for employers in Great Britain, not legal advice. Check the official sources for your situation.
- Unfair dismissal qualifying period expected to reduce from 2 years to 6 months for dismissals from this date (subject to Parliament)
Future dates are expected dates and depend on Parliament.
What employers can do
- Hold an informal conversation first and record what was agreed
- Check whether the issue is capability, conduct or linked to a health condition or disability
- Set specific, measurable objectives with a reasonable timeline
- Provide the training, coaching or resources the employee needs
- Confirm the plan and the possible outcomes in writing
- Review progress regularly and keep dated notes
- Use a procedure that follows the Acas Code if formal action becomes necessary
Recent tribunal decisions on this topic
Tribunal tracker- Parravox Ltd (In Voluntary Liquidation) Breach of contractTransfer of undertakingsUnfair dismissal Read the decision involving Parravox Ltd (In Voluntary Liquidation) on GOV.UK
- K.T.C (Edibles) Ltd Public interest disclosureRace discriminationUnfair dismissal Read the decision involving K.T.C (Edibles) Ltd on GOV.UK
- Kerry Ingredients (UK) Ltd Race discriminationUnfair dismissal Read the decision involving Kerry Ingredients (UK) Ltd on GOV.UK
Being listed does not mean a claim succeeded. Read the decision for the outcome; decisions can be reconsidered or appealed. If a listing concerns you, or a decision has since been anonymised or removed, tell us and we will review it and remove it where appropriate.
Related answers
- What is a fair disciplinary procedure? In Great Britain, a fair disciplinary procedure follows the Acas Code of Practice: investigate to establish the facts, tell the employee about the problem in writing, hold a meeting where they can respond, allow them to be accompanied, decide and confirm the outcome in writing, and offer an appeal.
- How should probation periods work? There is no legal requirement to have a probation period, and it can be any length. Acas recommends clear written expectations, regular reviews, support to improve, extension where appropriate, and a fair procedure before any dismissal. Day-one rights such as protection from discrimination apply throughout, and the unfair dismissal qualifying period is expected to fall to 6 months from 1 January 2027.
- When can an employer have a protected conversation? An employer can propose ending employment on agreed terms at any stage, even with no existing dispute. Under section 111A of the Employment Rights Act 1996, those pre-termination negotiations are generally inadmissible in an ordinary unfair dismissal claim, but not in discrimination or automatically unfair dismissal claims, and not where there has been improper behaviour.