Yaniv Preiss

There are two common managerial tools that sometimes get confused despite having very different purposes: the Performance Improvement Plan (PIP) and the Individual Development Plan (IDP). Understanding the distinction is crucial for maintaining trust and driving team results sustainably.

Individual Development Plan (IDP): Growing for the Future

An IDP is a proactive tool designed for growth and retention. It is rooted in the belief that developing people is a human need and essential for staying competitive in a growing industry.

Imagine other colleagues growing, competitors growing, the industry and market growing – if someone doesn’t, they go backwards.

Purpose: facilitate the process of acquiring new demonstrable skills

Focus: prioritize a direct report’s strengths, as improving strengths is more likely to lead to success than trying to “fix” non-critical weaknesses. The content should be the needs of the organization, which makes it practical, useful and timely.

Ownership: the plan is co-created between the manager and the direct to ensure buy-in. When a person helps create the plan, they act as an owner rather than just complying.

Timing: IDPs are updated or established during the performance review cycle as a roadmap for the next period. The goals are usually mid-term (a few months) and the plan itself, meaning the actions and feedback, are set for the next 4-5 weeks as a sliding window, to keep it relevant.

Performance Improvement Plan (PIP): The Last Resort

A PIP is an explicit, time-bound, formal process (involving HR) introduced only when regular feedback and coaching have failed to improve performance. With PIP, the direct is made fully aware that failing to achieve the agreed-upon results will lead to termination of employment.

In practice, some managers use PIP as a mechanism to make employees leave on their own, or make it impossibly hard, so they have documented proof of the employee not meeting requirements and goals, making firing leaglly legitimate.

In other cases, the efforts are sincere, and employees do display tremendous improvement by the end of the PIP.

Purpose: a time-limited effort to reach objectively measurable goals to avoid or justify termination.

Focus: critical performance gaps or behaviors that are career-limiting.

Consequences: unlike an IDP, the stakes are high. The employee is explicitly told beforehand that failure to meet the PIP’s goals is a reason for firing.

Path to PIP: it usually follows a progression: constant feedback → coaching → explicit warning of job risk → PIP.

When the manager has not been following their obligation to provide feedback, PIP might come to the employee as a shocking surprise.

PIP vs IDP Key Differences at a Glance

Effective managers use IDP to build a high-performing team sustainably, while PIP is reserved for the rare instances where performance is no longer viable without drastic change.