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View full libraryThis Capability Policy provides a fair and structured framework for managing concerns about an employee's ability to perform their role to the required standard. It covers performance, support, training, reasonable adjustments, ill-health capability, formal reviews and potential dismissal where improvement cannot be achieved.
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If you are establishing clear workplace standards, these conduct policy templates give you a practical set of policies covering expected behaviour, employee responsibilities and managing concerns.
This template brings together the key information, sections and considerations you need to create a clear, comprehensive and professional HR document. Preview the document below.
1 Overview
1.1 The organisation expects employees to perform their roles to the required standard and is committed to supporting employees to achieve and maintain appropriate levels of capability and performance.
1.2 Capability concerns will be addressed fairly, consistently and as early as reasonably practicable. The organisation will seek to understand the reasons for any performance concerns and provide appropriate support, training, guidance and resources wherever reasonably possible.
1.3 The purpose of this policy is to help employees improve and achieve the standards required for their role. Formal action, including dismissal, will only be considered where appropriate support and a fair opportunity to improve have not resulted in sufficient improvement, or where the circumstances make further improvement unlikely.
2 Scope
2.1 This policy applies to employees of the organisation.
2.2 It covers capability concerns arising from:
2.3 Capability should be distinguished from misconduct. Where an employee is capable of meeting the required standard but deliberately or negligently fails to do so, the organisation may consider whether the disciplinary procedure is more appropriate.
3 General principles
3.1 Clear expectations
3.1.1 Employees should understand the standards expected of them and the duties and responsibilities of their role.
3.1.2 Managers should communicate relevant performance standards clearly and should ensure that employees have reasonable access to the information, equipment, systems, training and resources required to perform their role.
3.1.3 Performance expectations should be reasonable and should take account of the employee's role, level of responsibility, experience and relevant circumstances.
3.2 Early discussion
3.2.1 Where a manager identifies a capability concern, it should normally be discussed with the employee at an early stage.
3.2.2 The manager should explain:
3.2.3 The employee should be given a reasonable opportunity to explain the circumstances and identify any support they believe may help them improve.
3.3 Understanding the cause
Before deciding how to address a capability concern,
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Capability concerns arise when an employee is unable to perform their role to the required standard, despite having the opportunity and appropriate support to do so. A fair capability process should focus on helping the employee understand the required standard, identifying the reasons for the shortfall and providing reasonable opportunities to improve before formal action is considered.
Capability concerns can arise from a lack of skills, knowledge, experience or ability to perform the requirements of a role. They can also arise from ill health or disability. Capability should be distinguished from misconduct, where the employee is considered capable of meeting the required standard but fails to do so through conduct or unwillingness.
Managers should normally address performance concerns at an early stage through discussion, clarification of expectations, coaching, training, mentoring or other appropriate support. Employees should understand what is expected and have access to the resources reasonably required to perform their role.
Where performance needs to improve, the organisation should set clear and realistic objectives and explain how improvement will be assessed. A performance improvement plan can be used to document the required standards, support available, review dates and consequences of insufficient improvement.
Where capability concerns arise because of health, the organisation should consider relevant medical or occupational health information and whether reasonable adjustments may help the employee remain in work. Dismissal on capability grounds should be a last resort and should only be considered after appropriate support, adjustments and other reasonable options have been explored.
Where informal support does not achieve the required improvement, the organisation may move to a formal capability process. The employee should be informed of the concerns, given a reasonable opportunity to respond, allowed appropriate representation and given a fair opportunity to improve before dismissal is considered.
Use these best practice actions, recommended timescales and process stages to understand when and how the Capability policy should be used, helping ensure each step is handled consistently and appropriately documented.
Understand the common mistakes to avoid when using this HR template, helping you reduce risk, prevent unnecessary costs and ensure the process is handled correctly.
A capability issue concerns an employee's ability to perform their job to the required standard. It can relate to skills, knowledge, experience, aptitude or health. This is different from misconduct, where the employee is considered capable of meeting the required standard but fails to do so through their behaviour or unwillingness.
There is no general legal requirement to use a document specifically called a performance improvement plan. However, a clear written plan can be useful because it records the standards required, objectives, support, review dates and potential consequences if sufficient improvement is not achieved.
There is no single statutory period. The timescale should be reasonable in the circumstances and should take account of the role, the nature of the performance concern, the support being provided and how long it would reasonably take to demonstrate sustainable improvement.
Potentially, yes. Capability is a potentially fair reason for dismissal, but dismissal should normally be a last resort. The employer should have evidence of the performance concerns, provide appropriate support and a reasonable opportunity to improve, follow a fair procedure and consider whether further support or alternative employment is appropriate.
The organisation should consider whether the employee is disabled under the Equality Act 2010 and, where applicable, what reasonable adjustments could remove or reduce the disadvantage. Performance should then be assessed in light of any appropriate adjustments. Specialist advice, including occupational health input, may be appropriate.
HRDocBox policies are designed specifically for UK employers and combine practical HR experience with employment law, Acas guidance and established HR practice. This capability framework provides a structured process covering support, improvement, formal action, disability considerations and potential dismissal rather than relying on a generic AI-generated procedure.
The policy gave us a useful basis for keeping our approach consistent. It helped us make the position much clearer internally.
The main expectations were easy to find without wading through unnecessary wording. It helped us tighten up a process that had previously been a little too dependent on individual judgement. It was clear enough to use as an actual workplace document.
We made a handful of changes for our own terminology and were then happy with the result. The Capability policy gave us a useful framework to review against our own arrangements. Having the framework already laid out was particularly useful.
The wording was practical enough to work alongside the processes we already have. We appreciated the practical emphasis rather than just a list of principles.
It gave managers something concrete to refer to when questions came up. The structure made it easier to spot anything we wanted to add for our own workplace. It was straightforward to explain to managers who were not HR specialists.
The policy gave us a clear framework to work from. The document gave us a sensible basis for checking our existing arrangements.
How this content is developed and reviewed
The Capability policy template is developed using a practical HR methodology that considers current UK employment legislation, ACAS guidance, CIPD good practice and the real-world HR process it supports. Templates and supporting information are regularly reviewed and updated, with additional reviews triggered by significant changes to legislation, guidance or established HR practice, helping ensure each document remains practical, relevant and suitable for UK employers.
Darryl Horn, Chartered HR Director
Darryl is a Chartered HR professional with over 25 years' experience in senior HR and employee relations roles.
He has extensive practical experience of managing conduct HR processes and founded hrdocbox to provide businesses with practical, professionally developed HR resources grounded in UK employment law and best practice.
HRDocBox has been creating practical UK HR documents since 2009.
"Darryl provides support and advice with excellent judgement, and has a strong understanding of people, policies and UK employment legislation."
"He is someone I trust; consistent, dependable, and committed to doing things properly."
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