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What is a Corrective Action Plan (CAP)? How To Plan It & Implement It

Author: Emma Williams
Author: Emma Williams

Chief Research Officer at HIGH5

Table of Contents
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Many companies may assume that a corrective action plan is used for employee disciplinary action or training and development.

However, they may not realize that a corrective action plan can also strengthen other areas of the organization.

A corrective action plan can help your organization meet consumer needs while adhering to rules and regulations.

Organizations that implement this can optimize their work processes and address organizational errors.

Learning about the different elements of a corrective action plan can assist you in developing one for your organization.

In this article, we help you understand what a corrective action plan is and its importance. We will also explore the elements of a correction action plan, how to develop one, and show you examples of it.

What is a Corrective Action Plan?

A corrective action plan is a method to address specific issues or gaps in your organization’s work processes or operations.

It defines the procedure to address problems obstructing the achievement of organizational objectives.

A corrective action plan may involve describing the problematic situation and discovering its underlying issue. It also includes creating a well-laid-out plan to tackle the problem.

Furthermore, to ensure the successful implementation of the suggested corrective action, it should include a process to test if the plan is working correctly.

Organizations implement corrective action plans to anticipate problems and prevent them from jeopardizing their reputation.

It can also include situations where an organization is going through change or transformation.

You may implement a corrective action plan whenever you encounter a problem in your organization that needs to be fixed.

The corrective action plan could be as straightforward as how to welcome customers into your store. It can also be as complex as setting up your organization’s talent recruitment processes.

Why Are Corrective Action Plans Important and Their Benefits?

Corrective action plans are crucial for any organization. They are plans that outline and document the organization’s attempt to correct problems.

It outlines a procedure for carrying out corrective actions, from identifying the issues to concluding the plan’s effectiveness.

Organizations that use corrective action plans have a framework to track and improve their business systems and operations.

You can view a corrective action plan as a record of the actions that you have taken for a particular situation or problem.

It serves as a guideline to be referred to when you encounter issues with business implementation.

You can also use it to determine if the workflow improvements implemented were effective or need improvement.

With a defined plan, you and your team will be more capable and prepared to monitor, oversee, enhance, and develop the solutions.

This way, the solutions you come up with will be more efficient and successful than randomly doing trial and error with different methods.

Once you complete the procedures, you will review the outcomes of the corrective action plan. Then, you may refine and tweak the elements in your plan to make it better.

Benefits of Corrective Action Plans

Here are some advantages of implementing corrective action plans:

  • Improve your organization’s work processes or methods
  • Optimize your business processes and remove unnecessary work-related tasks
  • Increase employee work output and performance at work
  • Identify cost-effective methods to rectify errors or workplace incidents
  • Control or remove ineffective or poor workplace safety practices
  • Protect employees from any kind of accidents or injuries that may happen if the incident occurs again
  • Cost-cutting and economic benefits from avoiding property loss or damage caused by incidents
  • Improve employee morale and productivity
  • Protect your organization from any legal liability
  • Helps you provide detailed documentation for insurance claims purposes
  • Outline the specific procedures to follow in order to resolve the problems
  • Serve as a foundation for future development and demands

Elements of a Corrective Action Plan

Defined problem

Identifying the problem is the first step in developing a corrective action plan. For example, a customer may complain about poor customer service and room quality from staying at your hotel.

To find potential solutions to address this complaint, first, you need to understand the root cause problem your hotel is facing.

By taking this first step, you are also assisting your team in understanding what needs to be done. It helps you determine which department needs to be involved in addressing the problem.

It could be the customer service team in the instance above. You may want to include relevant information that supports the described problem.

These include, for example, the following resources:

  • Complaints from customers
  • Health and safety incidents
  • Investigation results
  • Nonconforming materials

Due dates

Corrective action plans consist of a deadline to complete the actions necessary to achieve the intended result.

You may create a schedule with a list of activities required to complete each day. You should focus on critical tasks that can help you achieve your goal.

Furthermore, you can also consider including the implications of failing to meet the deadline.

Ensuring those involved in the plan are clear about the deadlines and consequences is critical for completing the tasks on time.

Risk assessment

Risk assessments assist you in evaluating the degree of risk associated with specific actions.

When developing a corrective action plan, companies use risk-reward analysis to estimate the level of risk they can take. In addition, it allows high-risk actions to be eliminated from the equation.

This analysis also helps organizations find the right balance of risk and reward they can accept.

Conducting a risk assessment is also beneficial at the end of the corrective action phase. It helps organizations determine if the plan helped correct the problem or whether they need to restart the process.

Root cause analysis

Identifying the root cause of the problem helps you look for a suitable solution to solve the problem. A root cause analysis is usually performed using a variety of approaches and techniques.

The Five Whys Analysis, for example, addresses the question “Why?” to identify what is contributing to the problem.

In the case of a customer complaint about poor customer service, the hotel may perform the why analysis and discover that the customer complained because their room isn’t clean and tidy.

Action items

The corrective action plan comprises a list of action items. These items outline steps on how the organization should approach and address the identified issue.

It includes information and procedures to clarify what necessary steps to take, such as an outline of the chosen corrective strategy.

When coming up with your action items, other elements to consider are the expenses and work assignments.

Metrics for completion

Another element of corrective action plans is the metrics for completion. These indicators serve as a baseline for the organization to achieve in order to consider the problem addressed.

For example, a hotel with a disgruntled customer due to poor customer service may consider using a four-star and above customer satisfaction rating as the metric for completion.

Progress updates

After completing your corrective action plan, you need to assess what went well and what did not.

During this evaluation, you will take a closer look and make necessary improvements to enhance the plan.

You can look for ways to make the plan more effective and efficient to achieve your goal. You can even make adjustments to your plan by restarting the process.

How To Write & Develop Corrective Action Plan in 7 Steps

1. Investigate the problem

Investigating, identifying, and evaluating the underlying problem is the first step of a corrective action plan.

Most organizations may have detailed standard operating procedures for their crucial work process. However, there could be limitations that could make following such standards challenging.

The solutions to any organizational problems will most likely appear when you get to the root of the issues. This will then simplify the process of organizing, creating, and executing your corrective action plan.

Even if the issues are apparent, conducting thorough research from different perspectives is critical. A detailed analysis can prevent you from overlooking any vital information.

This first step has to be performed with utmost vigilance. The reason is that the root causes you identify will be used for the following steps and solutions.

2. Plan The Process

When you have a comprehensive understanding of the issue at hand, it is time to outline the procedure for change.

You should do the following at the planning stage:

  • Look into the underlying cause of the problem
  • Examine and analyze the nonconformance triggers. For example, customer complaints, investigation results, health and safety incidents, etc.
  • Find any additional issues that are connected to the main problem
  • Identify and decide on solutions
  • Put in place risk-management procedures
  • Assign roles and tasks at each phase of the corrective action plan
  • Set realistic timeframes to evaluate and verify the effectiveness of the corrective action plan

3. Write The Corrective Action Plan

At this stage, what you have to do is record the details of your plan. Ensure that the plan is written in chronological order and includes a description to explain the whys of each step in the process.

You may consider including the details below for your documentation process:

  • The name of the process
  • The issue you are tackling
  • The solutions to address the issue
  • Formal documentation of policies and procedures
  • Detailed procedures to execute the corrective action plan
  • Responsibilities for system caretakers, teams and specific users

4. Train Your Team

Introducing any new changes can cause a significant impact on the organization’s stability. It may also result in feelings of uncertainty, fear, and anxiousness among those affected by the change.

Depending on the scale of your corrective action plan, the process might be complex or straightforward.

If the plan targets individual employees only, the training might only take a couple of hours. However, the training might take weeks or even months if the plan is targeting a broader, organization-wide problem.

Training should include interactive sessions related to the employees’ existing roles and responsibilities.

You can consider incorporating different types of training such as on-the-job learning, business simulations, case studies, etc.

When preparing for the training, it is to your benefit to list the procedure from beginning to end.

Doing so will allow the involved participants to acquire information, competencies, and confidence to adhere to the corrective action plan.

5. Implement the Corrective Action Plan

Upon completing the training, the corrective action plan should be put into action immediately. This can reduce the time gap between training and implementing newly learned skills and knowledge.

Before the plan goes live, ensure that the instructions and processes are available to the authorized employees.

6. Examine The Results

Remember during step two (the planning process); you have specified a time frame to evaluate the corrective action plan.

Once the pre-agreed time frame has passed, you need to assess the outcomes of implementing the plan.

This step aims to test the effectiveness and practicality of the plan. You can perform the evaluation by auditing a sample of corrective actions from system input to investigation, solution, and closure.

Audit results can help provide valuable information to improve and fine-tune future corrective actions. It is critical to inform and train the involved team or employees when new changes are implemented.

7. Adjust and Improve

In this final step, improvements are made to enhance the corrective action plan.

Actions are done to optimize the process to discover, evaluate, and resolve nonconformances effectively.

The goal is to create a systematic and consistent corrective action plan management system through continuous improvement.

How to Improve Corrective Action Plan

Use a template

Consider designing a pre-made template to key in all the required details. With a pre-made template, you can plan the action items for each stage and decide who to allocate the tasks to.

Conduct training

Corrective action plans involve introducing changes to the organization. If these plans are not carried out accurately, it defeats the purpose of implementing them.

Training is one method of preventing this. When employees receive the necessary training, you equip them with the skills and tools to perform the tasks.

It may also help reduce mistakes and misunderstandings, especially when introducing a new procedure.

Document all parts of the planning

Employees will also understand their roles and responsibilities, which reduces operational ambiguity. Documentation also saves time by providing solutions to issues efficiently and reliably.

Thus, it is essential to record all the critical information during the corrective action plan process.

Create SMART goals

When setting goals, make sure they are SMART. SMART goals are specific, measurable, attainable, relevant and time-based.

The SMART technique helps you stay focused and manage your time and resources more efficiently to reach your goal.

It also ensures that the corrective action plans are realistic and assist you in reaching your organizational goals.

Corrective Action Plan Examples

Employee performance improvement plan

After three months of working as a customer service representative, Abigail was informed that she did not pass her probation period.

It was brought to Wayne, the supervisor’s attention, that Abigail received many customer complaints. Furthermore, she did not achieve the minimum monthly performance rating.

As a result, her probation period was extended for another two months. She is required to achieve the minimum performance rating of 85% within two months.

Throughout this period, Wayne offered to help Abigail identify problems affecting her work performance and ways to improve her customer service skills.

During their 1-to-1 meetings, they found out that Abigail needed to strengthen her knowledge of the company’s existing and new products.

In addition, Abigail was also struggling to familiarize herself with the call center processes.

After completing the process and product training, Abigail managed to achieve a 90% performance rating.

She also received zero customer complaints within the extended probation period.

Production incident

Titan HR recently introduced a new software update to their existing talent management software. Unfortunately, shortly after the update launch, their servers collapsed.

Titan HR employees immediately carried out a root cause analysis to investigate the matter.

Their goal is to discover the problems that caused the server to crash and resolve them within 24 hours.

This prompted them to recheck the systems from which they had downloaded the software to determine whether the systems had been compromised.

Upon checking, none of the systems were compromised. However, one of the employees discovered that one of the systems needed to be updated to the latest version.

After updating the system, the software functions normally without any crashes anymore.

Frequently Asked Questions About Corrective Action Plan

What are the two types of corrective actions?

Corrective action is differentiated into two different types: immediate and preventative. Preventative corrective actions are proactive, while immediate corrective actions are reactive.

Immediate corrective action means resolving an issue that has happened or is currently occurring.

Preventive corrective action means putting in measures to minimize the probability of a problem from happening. The goal is to prevent any incidents from happening in the future.

What is meant by corrective action?

A corrective action plan is a method to address specific issues or gaps in your organization’s work processes or operations.

It defines the procedure to address problems obstructing the achievement of organizational objectives.

A corrective action plan may involve describing the problematic situation and discovering its underlying issue. It also includes creating a well-laid-out plan to tackle the problem.

Case Studies, Academic, and Research-Based Sources:

  1. Dyck, B., & Neubert, M. J. (2010). “Management: Current Practices and New Directions.” Houghton Mifflin.
  2. Ammerman, M. (1998). “The Root Cause Analysis Handbook.” Quality Resources.
  3. Kaplan, R. S., & Norton, D. P. (1996). “The Balanced Scorecard: Translating Strategy into Action.” Harvard Business School Press.
  4. Senge, P. M. (1990). “The Fifth Discipline: The Art & Practice of The Learning Organization.” Currency Doubleday.
  5. Case Study: “Implementing a Corrective Action Plan at XYZ Corporation.” Harvard Business Review.
Author: Emma Williams - Chief Research Officer at HIGH5
Author: Emma Williams - Chief Research Officer at HIGH5

Emma is a certified strengths and career coach with more than 25 years of international experience in helping individuals and organizations achieve success by nailing and maximizing their unique value propositions. She is an entrepreneur, proud mother and a C-level executive at HIGH5TEST, where she leads its coaching and research programs.

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