Sample Policy

COMPANY POLICY

PERFORMANCE IMPROVEMENT PLAN (PIP)

Purpose This policy guides superiors and employees in addressing the need to improve
performance, including problems in fulfilling the duties of a position by an employee.
The policy is based on the principle that performance issues are correctable thus
providing the employee the opportunity and provide support to improve their
performance while still holding them accountable for past performance.
Scope Applicable to all permanent and contract employees employed by the Company
inclusive of foreign workers and expatriate employees.
Revision date XXXXX
Issued by Human Resource Department
Approved by Executive Director

1.0. Introduction
1.1. The Performance Improvement Plan (PIP) is a series of measures designed to help
improve employee performance. The PIP communicates the performance
discrepancies, when an improved level of performance is to be achieved and the action
steps that will assist the employee in meeting performance expectations.
1.2. PIP shall be implemented to aid in correcting performance challenges associated with
the skills and expertise of employees and not be used to correct inappropriate
behavioural conduct or a violation of work rules.
1.3. To address and correct behavioural challenges, superiors should apply the Company’s
Disciplinary Policy.

2.0. Definition of Poor Performance

2.1. Poor performance is defined as “performance results that for not meet the job
requirements”. An employee who is unable to meet the targets/objectives set out for
him/her by the Company or superior.

3.0. Inclusion into the Performance Improvement Plan

3.1. An employee’s performance is determined during the annual performance appraisal
exercise or during any time of the financial year and therefore an employee can be put
into PIP any time of the year.

4.0. Duration of the Performance Improvement Plan

4.1. The duration performance improvement plan is a minimum of three (3) months and a
maximum of nine (9) months.
4.2. A full PIP review shall be carried out by the employee’s superior quarterly basis and
the employee shall be informed of the outcome. Managers are encouraged to conduct
regular reviews every month apart from a full PIP review.

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5.0. Performance Standard and Expectation

5.1. PIP communicates performance standards and expectations to assist an employee in
delivering their duties and responsibilities effectively. Effective performance standards
and expectations should consist of the following elements.
5.2. The PIP targets and support shall encompass the below;

Specific Performance standards should let employees know exactly which

actions and results they are expected to accomplish.
Measurable Whenever possible, objectives and standards should be based on
quantitative measures such as direct counts, percentages, and ratios.
Attainable The objective or standard should be achievable and set based on
reasonable productivity standards.
Relevant The performance standard should be relevant to the job
responsibilities.
Timely Results should be delivered within a time that meets the department
and Company’s needs.
Supportive Any reasonable steps the superior agrees to put in place to support
Measures improvement such as training, coaching or mentoring; additional
supervision, reallocation of duties, additional support from colleagues,
change in process, new software or equipment and reasonable
adjustments.
Feedback Regular feedback sessions should be put in place to let employees
know whether they are on track to deliver the required performance
improvement.

6.0. Outcome of the Performance Improvement Plan

6.1. Should the employee’s performance meet the expectation at the end of the review
period, he/she will be successfully opted out of PIP.
6.2. An employee who completes PIP shall remain in the current position and is required to
continue to maintain his/her performance level.
6.3. An employee who did not meet the expected performance after the review period can
be demoted to a lower job grade or dismissed from employment.

7.0. Superior Responsibilities

7.1. Superior must communicate performance issues to the employee via a face-to-face
discussion in a confidential manner.
7.2. Superior shall provide constructive feedback to an employee periodically or as
frequently as possible throughout the review period and document all communications.
7.3. If the issue is a result of a lack of skills or knowledge, the superior is expected to provide
and/or arrange for necessary training, resources, tools, support, and environment to
enable the employee to perform his duties.

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8.0. Employee’s Responsibilities

8.1. Employees must be accountable to ensure they fulfill their duties and responsibilities
of their positions, as outlined in their job descriptions and targets assigned by their
superiors.
8.2. Employees are advised to seek adequate information and feedback on their
performance and deliverables from time to time and reach out to their superiors if any
support is needed.
8.3. Employees must understand that if their work performance falls below the required
standard of their role, superiors will be obliged to address this and seek advice from
the Human Resources Department.

9.0. Human Resource Responsibilities

9.1. Human Resources acts as a mediator between the superior and the employee to
ensure a smooth implementation of PIP.
9.2. The Human Resource manager sits in with the superior and employee during the
review period of the employee to ensure a fair and consistent review is done.
9.3. The Human Resource manager may further provide valuable feedback to the
employee and address any concerns raised by them.

10.0. Process of Performance Improvement Plan

10.1. Phase 1 (Duration: 1 – 3 months)

10.1.1. The superior hold a formal meeting to discuss concerns regarding employee
performance and formalises this in writing by issuing a PIP Notification letter.
This letter informs the employee that he/she has been formally placed under
the PIP.
10.1.2. The superior establishes an action plan guided by a PIP form aimed at
correcting the employee’s performance. The action plan consists of a mutually
agreed objective or target with an appropriate timeframe given.
10.1.3. The superior needs to identify and propose additional training required for the
employee to enhance his/her skill and knowledge to perform at the expected
level. Besides training, the superior must provide coaching, adequate
resources, and tools for the employee to perform effectively.
10.1.4. At the end of Phase 1, the superior conducts a review and evaluates the
employee’s performance in the last three (3) months. If satisfactory progress
has been made, the employee will be notified in writing and will be opted out of
PIP.
10.1.5. As part of the PIP process, the superior provides regular feedback on the
employee’s performance indicating the extent to which the employee is on track
to deliver the improvements set out in the programme.
10.1.6. Following successful completion of PIP, the superior continues to monitor the
employee’s performance for a duration of a maximum six (6) weeks.
10.1.7. If the progress has been at an insufficient level, the superior proceeds the PIP
to Phase 2 with a further extension of three (3) months.
10.1.8. Employee will be issued a stern warning due to him/her failing to meet the
expected performance level.

_________________________________________________________________________________________
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10.2. Phase 2 (Duration: 1 – 3 months)

10.2.1. The employee’s superior holds a meeting to formally consider the employee’s
incapability to carry out his/her role.
10.2.2. At this Phase, the superior should also seek to establish if there is any new or
change objective or target to be considered to the employee’s circumstances
which are affecting him/her ability to reach the required level of standard and
performance.
10.2.3. Superior continues to provide necessary support measures and coaching for
the employee to perform effectively.
10.2.4. At the end of the Phase 2, superior conducts a review and evaluate employee’s
performance in the last extended of three (3) months. If satisfactory progress
has been made, employee will be notified in writing and will be opted out from
PIP.
10.2.5. Following a successful completion of PIP, superior continues to monitor
employee’s performances for a duration of maximum six (6) weeks.
10.2.6. If the progress again has been at insufficient level, the superior proceeds the
PIP to Phase 3 with further and final extension of three (3) months.
10.2.7. Employee will be issued a final warning due to him/her failing to meet the
expected performance level.

_________________________________________________________________________________________
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10.3. Phase 3 (Duration: 1 – 3)

10.3.1. The employee’s superior holds a formal meeting to discuss on the continuous
performance deficiencies that need to be improved immediately.
10.3.2. Superior to discuss with employee and readjust or further specify the objective
or target where required. Superior should also emphasize examples of unmet
objective or target in previous months and the details of the business impact.
10.3.3. Superior continues to provide necessary support measures and coaching for
the employee to improve his/her performances.
10.3.4. At the end of the Phase 3, superior conducts a review and evaluate employee’s
performance in the final extended of three (3) months. If satisfactory progress
has been made, employee will be notified in writing and will be opted out from
PIP.
10.3.5. Following a successful completion of PIP, superior continues to monitor
employee’s performances for a duration of six (6) weeks.
10.3.6. If the progress has been insufficient or no overall improvement despite the
superior has taken reasonable steps to allow the employee to perform at an
acceptable level, but that these measures have not worked; then, Human
Resource will proceed with further action.
10.3.7. Human Resource will issue a show cause letter to the employee to seek
explanation for his/her continued underperformances in the last nine (9) months.
10.3.8. Human Resource will peruse through all the evidence and documents
presented by superior. Human Resource will further consider the details of the
underperformances, the support given by superior, the impact of the
underperformances to the Company and the employee’s explanation of the
show cause letter for his/her continued underperformances.
10.3.9. Human Resource will provide the decision in writing within five (5) working days.
The potential outcome of the decision may include demotion, or dismissal with
notice.

11.0. Demotion
11.1. Demotion will be at Company’s discretion subject a suitable vacancy exist and the
Company is confident that the employee will be able to perform well in such role.
Further, it will normally be offered only as an alternative to dismissal in circumstances
in which the organisation is satisfied that the employee should no longer be allowed to
continue to work in their current role.
11.2. The offer will be issued in writing and the employee will have five (5) working days to
consider the offer and respond in writing.
11.3. If demotion is accepted, the new terms and conditions of the role and grade will apply.
The Salary shall be revised accordingly to the salary structure of the identified role.
11.4. Refusal of the offer will normally result in termination of employment.

12.0. Dismissal
12.1. Dismissal on the grounds of continuous unsatisfactory performance and there is no
alternative role available or suitable for the employee in the Company.
12.2. Any dismissal will be with full payment of notice in lieu.
12.3. The decision to dismiss together with the reasons for dismissal will be set out in writing
to the employee.

_________________________________________________________________________________________
This sample policy is prepared by the Malaysia HR Forum
https://www.facebook.com/groups/MalaysiaHRForum
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13.0. Appeal
13.1. An employee has the right of appeal against any action taken after phase 3. A request
of an appeal should be sent in writing to the Human Resource Department and set out
the grounds on which the employee believes that the decision was flawed or unfair.
13.2. The request must be sent within five (5) days of the employee receiving written
confirmation of the decision imposed on him/her.

14.0. Monitoring & Reporting

14.1. This policy will be reviewed regularly to ensure compliance with applicable legislative
changes, changes in company’s operations and best practices.

15.0. Documentation
15.1. PIP objectives and targets and subsequent reviews shall be documented and a copy
shall be provided to the employee concerned.
15.2. The objective or target to be achieved during PIP shall be clearly defined which should
consist of the expected outcome and deadlines.

16.0. Restriction
16.1. During PIP, employees shall not attend business trips and/ or external/internal trainings
unless it is necessary as part of his/her improvement plan.
16.2. Employees are also prohibited to apply for other positions (or internal transfers) that
becomes available during PIP.

17.0. Others
17.1. The Company reserves the right to amend this policy from time to time and shall notify
all employees when such amendment has been made and has been approved by the
Management.
17.2. Should there be a translation of this policy into other languages, the English version of
this policy shall be authoritative in the event of any dispute or confusion.

_____________________________________ End ______________________________________

Option : Additional Clause to consider for company with Trade Union

This policy is also applicable for an employee who is a trade union member. During the formal stages
of demotion and dismissal of this policy, the employee has the right to be accompanied by the trade
union representative. The employee is responsible for making the necessary arrangements and
liaising with the trade union representative.

Notes to Employers
The 3-phase model is a suggested model for a robust and solid PIP management. Employers can opt
for a single phase or two phase or more. However, it is advisable to adopt a practical approach and
something that is sustainable and within the company’s ability. Always ensure you have the resources
to administer the process.

_________________________________________________________________________________________
This sample policy is prepared by the Malaysia HR Forum
https://www.facebook.com/groups/MalaysiaHRForum
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 Sample Policy

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_________________________________________________________________________________________
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_________________________________________________________________________________________
This sample policy is prepared by the Malaysia HR Forum
https://www.facebook.com/groups/MalaysiaHRForum
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