PIP Full Form: What is the meaning of PIP?

PIPs are very popular in many organizations. The term 'PIP' is generally used in organizations to highlight certain things regarding employee performance. Freshers as well as new employees often get confused and worried about the term because it means a lot to their current job and future employment. But the first question that comes to their mind is what exactly the full form of PIP is?

In this article, we have briefly covered the most important topics about PIP, such as PIP full form, what is PIP, HR's role towards PIP, how PIP is established, and more.

What You Will Learn

What is the full form of PIP?

The meaning or full form of PIP is “Performance Improvement Plan”. It is also referred to as a performance action plan. This is because an action is taken on the basis of PIP to meet specific job goals. 

PIP is one way to ensure that every employee is working with maximum potential and if they are not, further steps will be taken to address these issues. PIP outcomes or actions may vary depending on the job title and from one company to another.

PIP Full Form

The full form of PIP can be explained as:

P Performance
I Improvement
P Plan

Let’s talk about what the PIP is:

What is PIP?

PIP is a formal report, which highlights some of the issues that must be fixed with the goals to be achieved by the employee/employees in order to achieve a decent balance in the company. In simple words, it is a tool that shares performance deficiencies with employees and gives them an opportunity to overcome and succeed.

Can a PIP lead to termination of employment?

One of the most common questions is whether documenting an employee's performance in a PIP can lead to the termination of a job? The simplest answer to this question is - 'It depends'. In particular, PIP is often the first step that employers take and officially mentions key objectives where an employee is not doing as expected or according to the company's goals. It can also be used to address behavioral related concerns.

If there are minor concerns in the PIP, some official negotiations and meetings may be the next step where an employee will be asked to fix all such issues. In addition, some training or classes may be provided to improve overall performance. As a result, further performance will be under close monitoring and an employee will have to correct them. Besides, if there are concerns about very bad behavior or if an employee breaks the policies of the company concerned, possible actions such as transfer, demotion, or termination can also be taken.

HR’s Role in PIP

HR has the most important role in PIP. HR is the main person who has the right to make the final decision. If a PIP is created for an employee, HR takes information related to the employee from the managers and discusses further action. HR can decide whether an employee should be given the appropriate assets for further improvements, such as training, or should be fired. 

However, to overcome such situations in most cases, HR works closely with line managers to encourage the employee and eliminate anticipated deficiencies. 

How is a PIP created?

Typically, three people are involved in setting up a PIP, such as HR, managers, and employees. The following steps are followed to make a PIP properly:

Determining a PIP

PIP is used to help employees improve their performance and meet company goals. This is not the way for frustrated managers to take advantage of terminating employees from their jobs. Therefore, HR needs to assess PIP and determine further processing.

Developing a Draft Plan

Once a PIP is created, the manager is required to make a draft plan regarding performance deficiencies. A draft plan also includes details of how some reforms will be implemented and how long it will take. In addition, it may also include details specifying conditions regarding demotion, termination, or termination if certain performance levels are not met. 

Reviewing the Plan

HR then reviews the draft plan and ensures that the plan is attainable and appropriate. HR also makes sure that there is no purpose to just terminate the employee. HR can also remove any bias against the employee.

Implementing the Plan

Once HR has reviewed the plan, the next step is to meet the employee and discuss plans and expectations. HR can also make further modifications based on employee feedback if it is valid on the manager's and HR's point of view.

Monitoring Plan Progress

The manager works closely with the employee and ensures that all plans are followed towards progress. All meetings or training should take place as per the scheduled time and should be done within the specified period of time. All further performance will be measured accordingly.

Making Plan Conclusion

If an employee does their best to meet the objectives of the plan and to address performance issues, the employer may possibly discontinue the PIP and allow the employee to continue working toward the company's goals. In addition, the employee may be given more time to succeed. On the other hand, if the employee fails to meet the objectives, a possible demotion or termination may be considered with the closure of the PIP. 

Other Forms of PIP

PIP may have many other full forms depending on the field or category where the term PIP is being used. Some other popular full forms of PIP in different categories are tabulated below:

Category Full Form
Jobs Personal Information Processing, Performance Incentive Points
Programming Pip Installs Python, Pip Installs Packages
Software Preferred Installer Program
Video Picture In Picture
Accounting Price Interest Percentage, Purchasing Invoice Problem
Insurance Personal Insurance Protection
Stock Exchange Personal Investment Plan, Personal Interest Plan
Defense Product Improvement Plan (or Program, or Proposal)


PIP (stands for ‘Performance Improvement Plan’) is an effective way to improve the overall performance of employees. This can either be helpful to eliminate minor issues at the surface level or terminate the job if it fails to meet the employer's expectations. It is better that you do not give your employer a chance to come up with a PIP.

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