Performance improvement plan (PIP): a practical guide for HR in Pakistan
Written by the StreamHCM team for HR and payroll managers in Pakistan. Updated on 10 November 2026.
A performance improvement plan is a written record of the gap, the target, the help you will give, and the dates you will review the work. Thirty, sixty and ninety days, weekly check-ins and SMART goals are practice, not a length written in the statute. Where the Standing Orders Ordinance applies, inefficient or careless work can be a minor matter, and habitual neglect of work can be misconduct that needs a written charge and an inquiry. Once the Punjab Labour Code 2026 is in force, section 146(5) requires appropriate instructions, a written warning, and a reasonable time to improve before termination for unsatisfactory performance.
As of November 2026. This page is general information. It is not legal advice. The Standing Orders points are taken from the attached text of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. The Code points apply only once that Code commences. Provincial statutes and the employment contract can differ. Check the text that covers your establishment, or speak to a labour law adviser, before you end employment.
What a PIP is, and what it is not
A PIP names one or two gaps in the work, says what good looks like in a way a third person could check, lists the training or the time you will provide, and sets the dates of the reviews. It is a chance to improve, with a record of that chance.
It is not a disguised dismissal. If the decision to end employment has already been made, writing a plan that the person cannot meet does not repair the process. Do not change the targets halfway through. Do not use the plan to collect a file for a reason that has nothing to do with the work.
Coaching, a warning, or a plan
Use a conversation, not a plan, when the gap is new, small, and the person has not been told the standard. A single late report, or a task done the wrong way once, is a coaching note.
Use a warning letter when you need a formal record that a rule or a standard was missed, and what happens if it is repeated. Where the Standing Orders apply, misconduct is not closed by a letter alone: the written charge and the inquiry described on that page still apply.
Use a PIP when the work has stayed short of a standard you have already explained, and you are giving a defined period, with support, to close the gap. The warning and the plan often travel together. The warning states the finding. The plan states the target and the help.
What the Ordinance and the Code actually say
In the Standing Orders text checked for this page, Standing Order 15(1) allows a reprimand or a fine for listed minor acts. Standing Order 15(1)(ii)(d) includes inefficient, dilatory, careless or wasteful working. Standing Order 15(3) treats habitual negligence or neglect of work as misconduct, at item (i), and frequent repetition of an act or omission in clause (1) as misconduct, at item (j). Misconduct under that Ordinance needs the written charge and the inquiry. The warning-letter page walks through that process. This page does not add a fine amount. The Ordinance states its own.
The Punjab Labour Code 2026, once it is in force, treats unsatisfactory performance as a valid reason under section 146(2)(d). Section 146(5) says the agreement shall not be terminated for unsatisfactory performance unless the employer has given appropriate instructions and a written warning, and the employee continues to perform unsatisfactorily after a reasonable time to improve. Section 146(3) requires the termination order in writing, with the reason. Section 146(4) requires a chance to respond, unless the employer cannot reasonably be expected to provide it. Whether the Code has commenced is set out, with the conflicting reports, on the Punjab Labour Code 2026 guide.
Nothing in those sections fixes the plan at 30, 60 or 90 days, requires a weekly meeting, or uses the word SMART. Those are ways to make the reasonable period and the written warning specific. Say that to the manager who asks for the legal length. There isn't one.
How to run the plan
- Evidence. Collect the examples before the meeting: the missed output, the dates, and the instruction that was already given. A feeling that someone is not trying is not a target.
- Meeting. Sit with the employee, go through the examples, and listen. Note who attended and what was said. Offer a colleague or, where the workplace has one, a representative, if your rules already provide that.
- Written plan. Use the template below. Hand over a copy the same day. Ask the employee to sign, or to write that they received it and disagree.
- Support and training. Name the help. A buddy, a shorter task list, a course you already run, or time with the manager. A target with no help is a warning in disguise.
- Check-ins. Weekly is a practical rhythm for a one-month or two-month plan. It is not a statutory interval. Write a short note after each one: what improved, what did not, and any change to the support. Do not change the target.
- Outcome letter. At the last review date, write the result: the standard is now met, the plan is extended with a reason, or employment will end. If it will end, follow the notice and the written-order rules that cover that employee. See notice period in Pakistan.
A PIP template you can copy
Replace each bracket. Delete a row you do not use. Keep a copy with the employee file.
| Field | What to write |
|---|---|
| Employee | [Employee Name], [Role], employee number, department, manager |
| Date of this plan | The day you hand it over |
| Gap | [Gap]. State the standard, then the examples, with dates. One gap, or two. Not a character sketch. |
| Measurable target | [Measurable target]. A number, a quality check, or a deadline a third person can apply. Say how it will be counted. |
| Support | [Support]. Training, a buddy, fewer parallel tasks, or manager time. Name the person responsible. |
| Review dates | [Review dates]. The check-ins and the final review. Weekly is practice, not a rule. |
| Consequences | [Consequences]. What happens if the target is met, and what process follows if it is not. Do not promise a dismissal the statute does not allow you to shortcut. |
| Signatures | Manager, HR, and the employee (or a note that the employee received the plan and declined to sign). Each with a date. |
Mistakes that make the plan useless
- Vague goals. "Be more proactive" cannot be reviewed. "Close the eight open tickets assigned to you within two working days, for four weeks" can.
- No support. If the only change is a deadline, you have not given the instructions and the time section 146(5) talks about.
- Moving targets. Adding a new gap in week three means the period never starts. Open a separate note if something new happens.
- No record. A conversation that nobody wrote down is not a written warning. File the plan, the check-in notes and the outcome letter.
Closing the plan
If the target is met, write that, and stop the extra check-ins. If more time is genuinely needed because the support started late, extend once, in writing, with a new final date. Do not extend in order to avoid a decision.
If employment ends, use the process that applies: the written order and the reason, the notice or the pay in lieu, and the dues. The last salary, leave and other lines are added up in the final settlement guide. A plan that was never handed over is not the written warning the Code, once in force, requires.
How StreamHCM keeps the record
Performance management holds KPIs, OKRs and goals, appraisals, performance reviews and 360 feedback. Attendance score and task performance can feed the review, so the examples in the plan are not only a manager's memory. The plan, the warning and the outcome letter sit in documents. The public product page is the performance management system. A wider note on how a team talks about standards, before anyone is on a plan, is building a performance culture.
Probation has its own rules and its own end date. Read probation period in Pakistan before you drop a plan into a three-month window and assume the window grows.
FAQ
What does PIP mean in HR?
A performance improvement plan is a written plan that names the gap in the work, the measurable target, the support the employer will give, and the dates on which the work will be reviewed. It is a record of an improvement period. It is not, by itself, a dismissal letter.
How long should a PIP last?
Thirty, sixty and ninety days are common practice. None of those lengths is written in the Standing Orders Ordinance or in section 146 of the Punjab Labour Code. Pick a period long enough for the person to show the change the plan asks for, and write the review dates down.
Can you dismiss an employee after a failed PIP in Pakistan?
Where the Standing Orders apply, misconduct still needs the written charge and the inquiry. Once the Punjab Labour Code is in force, section 146(5) says employment is not ended for unsatisfactory performance unless the employer gave appropriate instructions and a written warning, and performance stayed unsatisfactory after a reasonable time to improve. A failed plan is evidence of that period. It is not a shortcut past the written order and the chance to respond in sections 146(3) and 146(4).
Is a PIP the same as a warning letter?
No. A warning letter records a finding about conduct or work and the consequence if it is repeated. A PIP adds targets, support and review dates. Many employers issue the warning and attach the plan. The warning-letter page sets out the charge and inquiry where the Ordinance applies.
Should the employee sign the PIP?
Ask for a signature, or a written note that the employee has received it and disagrees. Refusal to sign does not erase the meeting if you record who was there, what was handed over, and the date. Give the employee a copy.
Can a PIP be used during probation?
Yes, as a way to record the gap and the support during the probation window. Under the Standing Orders, a probationer is not entitled to notice if the employer ends the employment, but a written order stating the reason is still required. Under the Code, once in force, section 144 caps probation at three months and either side may end it without notice. A plan does not extend that cap.
Keep the plan on the same record as the review
Goals, appraisals and the employee file in one place. Request a 14-day trial.