Good work. This is called management - performance reviews are a sop to try and make up for poor management but are utterly useless and often counter productive (there’s no better incentive to start job hunting than having to prepare for a performance review)
Competent managers don’t need to do performance reviews and bad managers are not helped by them
And that’s when you create a performance improvement plan.
If someone is underperforming then you take steps to try to understand why and help them to get to the level the company needs them to be at. Hopefully this works and everyone is happy but you need to be clear (to your employee and yourself) that ultimately this could end up in dismissal if it doesn’t work out.
This is when you document everything and have regular meetings with the individual so everyone understands what is going on and if it ever becomes legal then you have everything you need to justify your decision.
Point is, you only need to do this if someone is underperforming so much that you’re thinking you need to dismiss them, and if someone’s performance is bad then you don’t wait for the annual (or quarterly or whatever) review before doing something about it - you deal with it straight away
I've never seen PIPs work out well, although all my observations are from outside the manager/PIP-ee perspective and perhaps my sample size is not large enough yet. One employee managed to meet the demands of the PIP but only at the expense of dropping all other (not documented in the PIP) tasks, an extreme case of "what gets measured gets managed". Overall, they got to stay on but it was detrimental to the team they were in.
The more savvy people started applying at other companies the same day they received the PIP, since it was clear to them they would have to work significantly more for no increase in salary and they perceived the attainable effort/reward ratio to be better elsewhere. In one case this led to hilarity when the CTO had instructed the managers to PIP at least one of their team members "for morale reasons" and it ended in more than a third of all devs leaving the company in the next two months.
Wow. PIPs should only be used when someone is underperforming so badly they are damaging the team (and the business) at that point you have nothing to lose if they voluntarily leave (which in fact, is probably better for everyone)
"what gets measured gets managed" is one of the reasons I don't like the usual metrics and performance reviews, but in the specific case of a PIP they are necessary. If someone meets the targets of the PIP but starts dropping other required behaviours then you just add that into the PIP to make sure they don't do that
Competent managers don’t need to do performance reviews and bad managers are not helped by them