Is performance management the same as a PIP?
No. Performance management is the ongoing way an employer agrees objectives, gives feedback and reviews how employees are doing; Acas says reviews should happen at least once a year. A performance improvement plan (PIP) is narrower: a written plan Acas suggests when informal steps have not fixed a specific performance problem.
Everyday performance management
Acas describes performance reviews, sometimes called appraisals, as a chance to discuss what someone is doing well, any areas for improvement, whether they need more support or training, and their career and development objectives. Employers should hold them regularly for employees, and Acas says at least once a year is a good idea.
Alongside formal reviews, Acas says managers should talk to employees about their performance regularly, through feedback, coaching and regular check-ins, sometimes known as one-to-ones. A written record of each review should be kept and shared with the employee.
Setting objectives
Acas says objectives should be fair and reflect the employee's usual tasks and workload, though they might stretch them in some areas. It recommends objectives that are specific, measurable, achievable, relevant and time-bound, known as SMART objectives.
Performance management and a PIP compared
- Who it is for: performance management applies to every employee; a PIP is for one employee with a specific performance problem
- When it is used: performance management runs all year; Acas suggests a PIP if informal steps to improve performance have not worked
- What it sets: performance management sets everyday objectives and development; a PIP sets specific objectives, a reasonable timeline and the support or training needed
- What follows: a review leads to feedback and development; a PIP should make clear what happens if the required improvement is not made
When poor performance becomes formal
Acas says employers should first try to understand whether a problem is about capability (the ability to do the job) or conduct (behaviour), and should take steps to help someone improve before starting a formal procedure. Employers must provide adequate resources, such as training, to enable an employee to do their job.
The Acas Code of Practice on disciplinary and grievance procedures says disciplinary situations include misconduct and/or poor performance. Employers with a separate capability procedure should still follow the Code's basic principles of fairness. If a performance problem may be linked to a disability, employers must consider reasonable adjustments before taking formal action.
Sources
- Reviews and appraisals · Acas
- Problems with an employee's performance · Acas
- Code of Practice on disciplinary and grievance procedures · Acas
General information for employers in Great Britain, not legal advice. Check the official sources for your situation.
What employers can do
- Agree SMART objectives with each employee and review them regularly
- Hold a formal review at least once a year, with regular informal check-ins in between
- Keep a written record of each review and share it with the employee
- Work out whether a problem is capability or conduct before deciding what to do
- Offer support, training and adequate resources before considering a PIP
- Use a PIP when informal steps have not worked, and a procedure that follows the Acas Code if formal action becomes necessary
Related answers
- 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.
- 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 falls to 6 months from 1 January 2027.