Rethinking performance improvement plans in community care

In a sector where compassion, regulation, and people intersect, leaders are under constant pressure to deliver quality outcomes with stretched resources. Performance improvement plans (PIPs) are a familiar tool in this environment, intended to guide struggling employees back on track.

But do they really work? Many organisations in the care sector are finding that PIPs can do more harm than good, damaging trust, morale and retention. This article explores the pitfalls of PIPs and shares more effective strategies so organisations can move beyond PIPs to create a culture of continuous improvement that prioritises quality of care and workforce retention at the same time as ensuring organisational compliance.

The problem with performance improvement plans

Performance improvement plans are designed to be supportive. But in practice, especially within the high-pressure environment of aged care, disability services or community organisations, they often fall short and can be poorly executed leading to unintended consequences.

Common pitfalls of PIPs in the care sector:

• They erode trust. Many PIPs are perceived as punitive rather than developmental, particularly when poorly communicated or inconsistently applied. Employees subjected to these plans may feel singled out or undervalued, contributing to low morale and increased turnover.  Moreover, due to the time investment that is needed to really support a PIP, they are often not afforded the appropriate time and effort and as a result do not achieve the anticipated uplift in performance. Overall this can lead to resentment, disengagement and attrition.

• They don’t factor workforce retention challenges.  With workforce shortages projected to worsen, demand for community sector workers is expected to double by 2050. PIPs may exacerbate retention issues, unintentionally pushing skilled staff toward exiting the sector altogether. 

• They don’t address root causes. Performance issues often stem from structural or systemic problems like unclear role expectations or inadequate onboarding, not personal failure.

• They waste precious time and resources. Underfunded or understaffed teams may struggle to properly implement and manage PIPs, making them ineffective or tokenistic.

• They can introduce compliance risks. If not handled carefully, PIPs can open organisations to claims of unfair treatment or procedural flaws, particularly under modern awards and workplace laws.

Given these limitations, community services providers must rethink traditional approaches to workforce performance management.

Why this matters for NFP leaders

Across aged care, disability and community health, workforce pressures are only growing. By 2050, the demand for community sector workers is expected to double (SBS News, 2019). Retaining staff is more critical than ever.

Over-reliance on PIPs not only damages morale but can accelerate turnover—something the sector can ill afford. Organisations must instead focus on creating systems that support early intervention, skill development and a culture of ongoing feedback.

Strategies for performance improvement that actually work

If you're looking to support underperformance constructively and sustainably, here are proven strategies tailored to the care sector:

Person-centred engagement

Just as providers strive for person-centred care for clients, applying a similar philosophy to workforce management is essential. Engagement strategies that focus on individual staff strengths, goals, and professional growth can mitigate the need for PIPs altogether.

• Use the same person-centred principles with staff as you do with clients.

• Understand individual motivators and goals.

• Recognise strengths and development areas in context.

Upskill managers to coach, not just manage

The role of managers in performance improvement cannot be overstated. Equipping leaders with advanced coaching skills enables them to address underperformance as a developmental opportunity rather than a disciplinary action. As part of this, leaders will be supported to understand that stepping in early to provide feedback and coaching is a far more effective method of driving high performance, as opposed to waiting for the performance to get so bad it requires a PIP. Early intervention and regular feedback promotes and drives a performance culture.

• Equip leaders with skills in performance conversations, early intervention and feedback.

• Train them in situational leadership and conflict resolution.

• Encourage regular check-ins instead of waiting for performance to drop.

Training Recommendations: Develop managerial training programs focused on sensitive communication, regulatory compliance, and situational leadership.

Reframe underperformance with tailored development plans

Poor performance is often a reflection of systemic barriers, insufficient training, unclear expectations, or misaligned job responsibilities, rather than individual capabilities. Addressing these barriers through tailored development plans promotes both staff growth and better care outcomes. 

• Address root causes like poor onboarding, unclear KPIs, or unrealistic workloads.

• Create competency-based training pathways linked to organisational goals.

• Focus on development, not discipline.

Case Study: An aged care provider in NSW implemented dementia care training tailored to frontline roles. Over 12 months, this led to a 40% reduction in staff stress incidents and significantly improved care outcomes.

Key Strategy: Introduce competency-based learning pathways. Instead of focusing solely on corrective measures, tailor education and training offerings to close specific skill gaps while focusing on career growth opportunities. 

Feedback culture over fear culture

Feedback loops - whether from staff, clients, or families, offer valuable insights into operational pain points. When actively incorporated into strategic planning, this data fosters meaningful performance improvements that whole teams can get behind, often raising awareness of performance expectations which reduce the need for sustained performance counselling.

• Embed regular feedback loops between staff, managers, and even clients.

• Use feedback tools to surface issues before they become problems.

• Prioritise transparency and shared responsibility for performance.

Case Study: A South Australian organisation invested in automated feedback tools, resulting in a 50% reduction in complaint resolution times. Engaging staff in similar feedback mechanisms could lead to early identification of issues before they escalate into underperformance.  

Action Plan: Conduct quarterly feedback sessions with clear follow up actions. Emphasise a non-punitive, solutions focused approach to performance challenges.

How Anson can support your performance culture

At Anson, we help care sector organisations build systems that improve performance through trust, development and feedback, not fear or formality. Our consultants can work with you to:

• Train managers in strengths-based coaching and early intervention

• Design structured feedback frameworks that align with sector standards

• Create development pathways that improve both retention and care quality

Key takeaways

• Traditional performance improvement plans often fail in the care sector due to poor execution and lack of contextual support.

• Person centred workforce strategies and early feedback lead to stronger performance outcomes.

• Investing in leadership capability and feedback mechanisms can prevent underperformance before it starts.

Frequently asked questions

1. Are PIPs still legally required in some cases?

While not mandatory, some awards and agreements may reference formal performance management steps. Always seek HR advice before terminating employment based on underperformance.

2. What’s the best time to address underperformance?

Early. The sooner a concern is raised and discussed, the more likely it is to be resolved informally with a positive outcome.

3. How can I talk to staff about performance without triggering fear?

Frame it as development, not discipline. Focus on mutual goals and support rather than blame.

4. Do feedback systems really reduce turnover?

Yes. Studies show that clear communication and regular feedback significantly improve staff engagement and reduce avoidable exits.

5. Build a stronger performance culture with the right foundations

If you’re relying on performance improvement plans to manage staff issues, it might be time to rethink your approach. A culture of continuous feedback, professional development, and early support doesn’t just improve performance, it protects your people and your organisation.

Looking for guidance on where to begin? 

Our team can help you implement practical, people-first frameworks that truly make a difference. Contact us today to find out more.