Final answer:
Performance Improvement Plans (PIPs) are used when employees are not meeting the set standards. They are part of performance appraisals, which assess job performance, motivate improvements, and document concerns. PIPs contribute to improving human capital by upgrading employee skills and knowledge.
Step-by-step explanation:
Performance Improvement Plans (PIPs) are typically used when existing employees are no longer meeting standards. They serve as a structured plan for employees to improve their work performance and align with the company's expectations. Performance appraisals, which may include PIPs, are formal processes that occur multiple times a year. They have several functions, including motivating employees to improve or expand their competencies, assessing job performance, identifying opportunities for training, and in some instances, supporting decisions regarding employment status, like termination in the case of continued poor performance.
360-degree feedback appraisal is a comprehensive performance appraisal method where feedback is gathered from all around an employee, including supervisors, peers, and subordinates, which can form part of a PIP by providing a variety of perspectives on the employee's performance. Ultimately, PIPs help organizations in improving human capital by upgrading skills, knowledge, and the health of their workforce, thus making a positive economic impact by increasing the workforce's competencies.