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Capability Guidance

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Lauren Clarke HR Advisor


What can cause a capability issue?

Lack of Understanding - Organisation - Job role

Overstated Experience

Different Ways of Working.




Employee Lacking Capability

Poor quality of work.

Lack of new ideas and development plans.

Lack of confidence in work.

Lack of understanding of extent of duties.

Basic mistakes and errors.

Missed targets or projects.

Types of Actions


informal Action

Informal Action is Usually:

  • The issuing of an informal warning and the consequences of continued underperformance.

  • A discussion about performance needs.
    • Alert to underperformance concerns.
    • Agree performance targets.
    • Agree timescale for improvement.
    • Alert line manager to any further needs e.g. training/support.

  • Make notes of the discussion and record all evidence of the informal action on the employee’s file.

formal action

An informal warning has been given but there has been no improvement.

It is clear that the employee’s performance cannot be improved by any support available to be offered by the Company.

The Company has taken reasonable and necessary steps to assist the employee to improve their poor performance but there has been no improvement.

formal Action

Inviting the employee to a formal hearing to discuss concerns applying a suitable sanction where appropriate.


Where the employee and line manager set out plan for performance improvement and agree timescales for this to be met.


Where the employee and line manager review whether improvement targets have been met.


during a capability hearing

Introduce attendees by name and explain their roles.

Agree note taking procedure.

Outline performance concerns and any evidence of this.

Ask open questions.

Explain structure, status of meeting and representation rights.

Adjourn when necessary and ensure you do so to consider your final decision.

Ask whether there are any further support requirements.

Allow employee to discuss the issues and highlight any extenuating circumstances.

following a Capability Hearing

Following the hearing, confirm in writing:

  • Any warning issued
  • The requirement performance improvement (the performance improvement plan)
  • Timeframe for improvement
  • What will happen if there is no improvement
  • The right to appeal.

Performance Improvement Plan

The performance gap (current vs expected).

Formal document which sets out:

Any previous objectives to address the performance gap.

Current performance requirements.

Agreed timescale for improvement.

Consequences of failure to improve.

Any assistance to be provided.

Performance Improvement Plan CONT.



Working Support e.g techology.




reviewing performance

  • Once the time period for improvement has passed, review the individual’s performance.

  • Where you are satisfied with their improvement, this concludes the process.

  • Write to the employee confirming that no further action will be taken at this time – but advise that further underperformance will be monitored and actioned.

reviewing performance Cont.

  • Further improvement will be outlined and, at the end of the time for improvement, a review will need to be undertaken.

  • Invite employee to formal capability hearing to review continued underperformance – same process as previous meeting.

  • Where the agreed performance improvement has not been reached, further formal action is needed.

  • The outcome of this hearing will be a formal warning and a further performance improvement plan.

Continued Underperformance

Following a continued failure to meet the improvements outlined within the performance improvement plan, a dismissal for lack of capability may be reasonable.

You will need to consider alternative roles and employment to ensure the dismissal decision is fair and reasonable.

A trial period can be used in an alternative role to ensure this is suitable for the individual.

Capability Dismissals

  • An honest belief, on reasonable grounds, that the employee is incapable of performing satisfactorily and reasonable steps have been taken to verify this.

  • An opportunity to improve was given.

  • Improvement has not occurred even though warnings and support were provided.

Will need to be able to show:

  • Consideration has been given to alternative employment.



Holding an Informal Capability Hearing

Holding a Formal Capability Hearing


Employee Assistance Programme

Mental Health First Aider

Mental Health First Aiders are not trained to be therapists or psychiatrists, but they can offer initial support through non-judgemental listening and guidance.

Health Shield is dedicated to helping keep employees & businesses in the best of health, with a range of innovative health & wellbeing solutions.24/7 Counselling & Support Helpline 0800 028 1963

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