Capability procedure for poor performance: employer guide

A capability process addresses whether an employee can perform the job to the required standard. It should help the employee understand the gap and provide a reasonable opportunity, resources and support to improve. Employers should distinguish capability from misconduct and avoid treating a disappointing result as proof of negligence or unwillingness.

Capability or conduct?

Capability concerns ability, skill, knowledge or, in some cases, health. Conduct concerns behaviour within the employee's control, such as knowingly refusing a reasonable instruction. The distinction matters because it shapes the investigation, support and procedure.

A missed deadline could reflect unclear priorities, inadequate systems, excessive workload, insufficient training, disability-related barriers or deliberate inaction. Start by asking what happened. Do not label an issue as misconduct simply because that route appears quicker.

Health-related capability needs particularly careful handling. Consider medical evidence, reasonable adjustments, alternative duties and return-to-work support. Dismissal connected with disability can create discrimination risk if the employer has not properly considered its duties.

Define a fair performance standard

The employee must know what acceptable performance looks like. Use the job description, contract, objectives, policies, quality requirements and reasonable management instructions. Check that these sources are consistent and that the standard has actually been communicated.

Good standards are specific and connected to the role. “Improve attitude” or “be more commercial” is too vague. A better expectation identifies the required output, accuracy, behaviour, timing and evidence. Account for experience, agreed adjustments and any recent change to duties or systems.

Compare like with like. Raw rankings can mislead where employees handle different workloads, territories or case complexity. Use more than one source of evidence, including work samples, quality reviews, agreed metrics, customer information and documented supervision. Include positive evidence as well as failures.

A clear employment contract helps establish the role and working arrangements, while day-to-day objectives should remain realistic and up to date.

Investigate the cause before starting formal action

Meet privately with the employee and explain the concern using examples. Listen to their response. Check whether expectations were unclear, training was missed, tools were unavailable, priorities conflicted or another manager gave different instructions.

Consider whether the issue is new or longstanding. A sudden change may indicate health, caring responsibilities, workplace conflict or another underlying factor. Managers should not make medical assumptions, but they can ask whether support or an adjustment may help.

Review the employer's contribution. Acas notes that employers must provide adequate resources to enable employees to do their jobs, which can include training. It is difficult to criticise an employee for a system failure, missing instruction or workload that no one could reasonably complete.

Try informal support where appropriate

Many issues can be resolved through clarification, coaching, training, mentoring, workload changes or more frequent supervision. Record the conversation and agreed actions, while making clear whether the stage is informal.

Set a review date and explain the expected improvement. Informal action should not become an indefinite hidden warning. If the issue is serious, repeated, or informal support has not worked, the employer may move to its formal procedure.

Use a performance improvement plan

A performance improvement plan should be a practical route to improvement, not paperwork created to justify a predetermined dismissal. Include:

• the performance concerns and supporting examples;
• the specific standard required;
• measurable objectives and evidence sources;
• training, coaching, resources or adjustments;
• who is responsible for each support action;
• a reasonable improvement period and interim reviews;
• how progress will be assessed; and
• the possible outcome if sufficient improvement is not achieved.

The timescale depends on the work, seriousness of the gap and time needed to demonstrate sustained performance. A short period may be unreasonable where results occur monthly or require training first. Conversely, a safety-critical concern may need immediate controls while the process continues.

Hold the promised reviews. Share evidence, acknowledge improvement and adjust the plan when circumstances change. Do not introduce new criteria at the final meeting that the employee had no opportunity to meet.

Follow a fair formal procedure

If formal action is required, follow the organisation's capability or disciplinary procedure and the principles in the Acas Code of Practice. Notify the employee in writing of the concern, evidence, meeting arrangements and possible outcomes. Give reasonable time to prepare and explain any applicable right to be accompanied.

At the meeting, present the concerns, allow questions and listen to the employee's explanation. Consider new evidence, health information and proposed adjustments before deciding. Keep an impartial note and communicate the outcome in writing.

Depending on the procedure and circumstances, an outcome might be no action, further support, an extended review period, a warning or another proportionate step. State the required improvement, review period and consequence of continued failure. Provide an appeal route.

When dismissal is being considered

Capability dismissal should be a last resort. Before deciding, review whether the employer clearly established the standard, investigated the cause, provided suitable support and time, considered adjustments and alternative roles, followed its procedure and treated comparable cases consistently.

Acas guidance says employers should have evidence of poor performance and the steps taken to support improvement. Where another suitable role exists, consider whether redeployment is reasonable. Do not assume a lower-paid or different role can be imposed without agreement.

The final decision should be made by someone with appropriate authority who can consider the case objectively. Confirm the reason, termination date, notice arrangements and appeal in writing. Obtain legal advice where disability, whistleblowing, discrimination, family leave or another protected issue may be involved.

Maintain useful records

Keep role expectations, meeting invitations, notes, evidence, support offered, plans, review outcomes and appeal documents. Records should be factual, relevant and securely retained. Avoid exaggerated or personal language that would undermine the fairness of the process.

Analyse capability cases at organisational level. Repeated problems after the same training, under one manager or within one role may reveal recruitment, workload, system or leadership issues.

Put the procedure into practice

Use the employee handbook builder to create accessible performance, disciplinary and grievance procedures. HRHeaven's HR Actions workspace can help managers organise an employee case timeline and supporting records. The process must still be tailored to the facts and reviewed by an appropriately authorised person.

Sources and further guidance

• Acas: Problems with an employee's performance
• Acas: Dismissals for capability or conduct
• Acas: Disciplinary procedure step by step
• Acas Code of Practice on disciplinary and grievance procedures
• GOV.UK: Dismissal

This guide provides general information for UK employers and is not legal advice.