The club should not pass the hands, the shoulders simply rock, maintaining the angle indicated by the yellow lines throughout the chip. The club face remains on the path to the target; as shown below.

I teach chipping by placing a golf shaft in the grip end of an old pitching wedge, as shown in the illustration below. The idea is to not allow the shaft to hit you in the side throughout the chip.

Caution! This drill is utilized for short shots only; never a full swing.