Developing a Capability Procedure: A Fair UK Employer Guide

What if a capability procedure could do more than manage underperformance? When concerns arise, managers may be unsure whether the issue is capability, conduct or a lack of support. A clear process helps identify the difference, explain what needs to improve and give the employee a fair opportunity to respond and make progress.

Developing a capability procedure can feel daunting, particularly when you need to balance consistency, appropriate support and accurate records. A process that is unclear or applied differently between cases can undermine trust and increase the risk of a grievance or employment tribunal claim. The fairness principles in the ACAS Code of Practice can help employers approach concerns carefully and consistently.

This guide explains how to set out practical stages, raise concerns clearly, agree suitable support and record decisions. It also covers how to give employees a meaningful opportunity to respond and improve, and when to seek HR advice if a case becomes complex. Altum HR provides employer-side HR and employment law support, including practical performance management guidance.

What a capability procedure is, and when an employer should use one

A capability procedure is a clear process for addressing concerns about an employee’s ability or performance, identifying suitable support and reviewing whether progress is made. Its purpose is to help managers respond fairly and consistently, not to treat every shortfall as misconduct or move straight to a formal outcome.

Capability concerns may arise when someone is struggling to meet the requirements of their role. They might need training, more experience with a task or support with circumstances affecting their work. The appropriate response depends on the facts. An early, calm conversation can establish what is happening, what the employee understands about expectations and whether practical support could help. Regular performance management support can help managers address issues before they become entrenched.

A capability procedure may sit alongside routine performance reviews. For a general introduction to how employers assess and discuss work performance, see this overview of performance appraisal. Developing a capability procedure means deciding how your organisation will move from informal discussion to a more structured review if concerns continue.

Capability or conduct: how to identify the right route

Start with the nature of the concern and the evidence. If an employee makes repeated errors because they have not been trained to use a system, this may indicate a capability issue. If they understand the required process but deliberately refuse to follow a reasonable instruction, conduct may be relevant. These examples are not automatic rules. The context and available evidence should guide the decision, rather than assumptions about the employee’s attitude or ability.

Health-related circumstances can also affect performance and may call for a sensitive, individual response. If the facts suggest both a performance difficulty and possible misconduct, pause before choosing a procedure. A careful HR review can help clarify the concerns and identify an appropriate, fair route.

Why a written procedure helps managers and employees

A written procedure gives managers a shared framework for explaining standards, discussing concerns, considering support and reviewing progress. It also helps employees understand what is expected, how they can respond and what may happen next. Include practical information on who will raise concerns, how meetings will be arranged and how progress will be reviewed.

Keep relevant, confidential records of conversations, agreed actions and review points. Records help maintain continuity and explain how decisions were reached, but paperwork alone does not make a process fair. The procedure should provide a genuine opportunity to understand the concerns and support improvement, with each case considered on its own circumstances.

How to develop a capability procedure with clear, fair stages

Developing a capability procedure works best when managers have a consistent framework that they can adapt to the case, rather than a rigid script. Clear expectations and planned review points help the employee understand what needs to improve and give the manager a fair basis for assessing progress.

The stages below are a practical framework, not a legal checklist. Adapt them to the role, the concern and your organisation’s policies. Check current ACAS guidance and seek relevant legal advice when drafting or updating the procedure. Do not present every suggested step as a statutory requirement.

Set expectations, evidence and responsibilities

Be clear about who raises a concern, who reviews the information and who makes decisions. Where possible, separate the person supporting the employee from the person deciding a formal outcome. This can help ensure that evidence is considered objectively.

Set out role-related standards in plain language. Relevant evidence might include agreed objectives, examples of work, training records and documented feedback. Check that expectations are understandable, consistent with applicable policies and appropriate to the role. Where possible, use specific examples, such as an incomplete task or a missed agreed standard, rather than relying on general impressions.

Build in support, review and a reasoned outcome

A written procedure should guide a conversation, not replace one. Give the employee a meaningful chance to respond, explain relevant circumstances and identify support that may help. Record what you agree, who will provide it and how progress will be reviewed.

• 1. Raise the concern: Explain the specific shortfall, give relevant examples and clarify the expected standard.
• 2. Hear the employee’s response: Ask for their perspective and consider whether you need to check further information.
• 3. Agree support and expectations: Record suitable steps, such as guidance or training, and describe what improvement would look like.
• 4. Review progress: Set a review point that fits the role and circumstances. There is no single timescale suitable for every case.
• 5. Decide and explain the outcome: Record progress, any remaining concerns and the reasons for the decision, including any further action under your procedure.

Keep the record factual and proportionate, and explain the outcome clearly to the employee. If the evidence or an appropriate next step is uncertain, pause and seek tailored HR advice. Altum HR’s performance management support can help managers shape a process around the case instead of relying on a one-size-fits-all template.

How to handle capability concerns fairly and avoid common process errors

A standard template can help managers stay organised, but it cannot determine what is fair in an individual case. Developing a capability procedure should provide a consistent framework while leaving room to consider the evidence, the employee’s response and any relevant personal circumstances.

Tailor each process decision to the evidence and the employee’s individual circumstances. Listen carefully before deciding what the concern means or what action is appropriate. Ask open, relevant questions, allow the employee time to explain their perspective and consider their response before reaching conclusions. If new information emerges, check it rather than setting it aside to keep the process moving.

Responding to health, disability or other personal circumstances

If an employee mentions a health condition or another personal issue, respond sensitively and avoid assumptions about how it affects their work. Ask what support they think may help and consider whether workplace adjustments or specialist advice are appropriate. Legal duties depend on the circumstances, so check current guidance and seek tailored advice before deciding what action to take.

Keep sensitive information relevant, accurate and appropriately restricted. Record the support considered and agreed, but do not circulate medical details more widely than necessary to manage the case.

Common capability procedure mistakes to prevent

Vague expectations make it difficult for an employee to understand what needs to change. Be specific about the work standard in question, share concerns promptly and hold planned review conversations. Do not surprise the employee with new allegations at a meeting or draw conclusions without checking the facts.

Capability concerns are not automatically misconduct. If evidence suggests deliberate behaviour, such as knowingly refusing a reasonable instruction, consider whether a disciplinary process may be more suitable. Where performance and conduct concerns overlap, get HR advice before choosing a route. The ACAS Code of Practice concerns disciplinary and grievance procedures. Check current guidance and consider carefully how its fairness principles apply to the circumstances of a capability case.

Keep records factual, confidential and consistent with your organisation’s policies. Note what was discussed, the employee’s response, support considered and the reasons for decisions. Records help others understand the process, but they do not replace listening or fair judgement.

Review disciplinary procedure guidance

Put the capability procedure into practice with the right HR support

A written procedure only helps if managers know how to use it. As part of developing a capability procedure, explain where employees can find it, when it may apply and who they can speak to with questions. Make clear that the process is intended to address work concerns fairly and consider appropriate support, rather than impose an automatic outcome.

Make the procedure usable and consistent

Brief managers on their responsibilities, including how to raise concerns, prepare for conversations and follow up agreed actions. Practical prompts can help them capture the facts without turning each case into a box-ticking exercise. For example, meeting notes might record the concern discussed, the employee’s response, support agreed, who is responsible for providing it and when progress will be reviewed.

Give managers guidance on handling records confidentially and when to pause and seek advice. Check how the procedure is being applied across cases. If managers interpret a standard inconsistently or miss review discussions, update the guidance and provide further support.

Review the procedure when relevant policies or workplace practices change, and when experience shows that a stage is unclear or difficult to apply. An HR policies and contracts review can help employers assess whether written guidance remains clear and suitable for their organisation.

Know when to seek expert employment law advice

Seek HR input early if evidence is disputed, the employee raises sensitive personal circumstances, or managers are unsure whether to continue with a capability process or consider a formal outcome. Advice can help clarify what information needs checking, whether the process fits the circumstances and how to communicate next steps fairly.

An external HR partner can support policy design and help managers handle individual cases in a way that reflects the organisation’s procedures and current employment law advice. Altum HR provides employer-side HR and employment law support, working with businesses on practical performance management and complex employee matters.

If you’d like to review your procedure or discuss a specific capability concern, discuss tailored HR support.

Build a fair process managers can put into practice

A clear capability procedure helps managers distinguish performance concerns from conduct issues, set expectations and give employees a meaningful opportunity to respond. Developing a capability procedure also means planning appropriate support and review points, recording decisions and adapting the process to the evidence and individual circumstances.

Consistency matters, but fairness does not come from applying a template without thought. Brief managers on their roles, keep records relevant and confidential, and seek HR advice when evidence is disputed, circumstances are sensitive or the right next step is unclear. Review the procedure as your policies and workplace practices change.

Altum HR provides employer-side HR and employment law support, including performance management and disciplinary support. Tailored guidance can help managers approach capability concerns with greater clarity and care.

A thoughtful process can help your organisation address concerns fairly while keeping the focus on improvement. Build confidence with clear expectations, constructive conversations and considered follow-up.

Frequently Asked Questions

What is a capability procedure at work?

A capability procedure is a structured way for an employer to address concerns about an employee’s ability or performance. It sets out how concerns are explained, how the employee can respond, what support may be considered and how progress is reviewed. The aim is to give the employee a clear opportunity to improve while helping managers make decisions based on relevant evidence and the circumstances of the case.

How do you develop a capability procedure?

Start by setting out role-related performance standards and identifying who is responsible for raising concerns, reviewing information and making decisions. Developing a capability procedure also involves explaining how employees can respond, how support will be agreed, and how review points and outcomes will be recorded. Treat it as a practical framework, not a rigid checklist. Adapt its use to the role, the evidence, relevant policies and the employee’s circumstances.

Is a capability procedure the same as a disciplinary procedure?

No. A capability procedure usually addresses concerns about an employee’s ability or performance, such as difficulty completing a task to the required standard. A disciplinary procedure generally deals with alleged misconduct, such as knowingly refusing to follow an instruction. The facts should guide which route is appropriate. If concerns overlap or the correct process is unclear, review the evidence carefully and seek HR advice before proceeding.

Can an employer use a capability procedure for poor performance?

Yes, a capability procedure can address poor performance where the concern relates to an employee’s ability to meet the requirements of their role. Explain the specific standard that is not being met, listen to the employee’s response and consider support such as guidance or training. Keep the process proportionate to the circumstances, with clear review points and records of progress and any remaining concerns.

What support should an employer consider during a capability procedure?

Support should reflect the reason for the performance concern and the employee’s role. Options may include clearer instructions, coaching, training, access to suitable equipment or regular feedback. Ask the employee what they think would help rather than making assumptions. If they raise health or other personal circumstances, consider the information sensitively and seek tailored advice where appropriate. Record what support is agreed, who will provide it and when it will be reviewed.

When should an employer seek HR advice about a capability issue?

Seek HR advice when evidence is disputed, health or other sensitive circumstances arise, capability and conduct concerns overlap, or possible next steps are unclear. Advice can help managers check that the process fits the facts, consider relevant policies and handle communications consistently. Altum HR provides employer-side HR and employment law support, including performance management and disciplinary support, to help businesses assess complex employee matters and plan an appropriate response.

Article by

Josephine Broadstock

Josephine Broadstock is the Founder of Altum HR and a recognised thought leader in HR strategy and operational delivery. With a career grounded in employment law and hands-on business support, Josie has built a reputation for helping organisations move beyond transactional HR into truly strategic, commercially aligned people management.

At the core of Josie’s approach is a belief that HR should not sit in isolation—it should actively drive business performance. She works closely with business owners and leadership teams to understand how their organisations function in practice, not just on paper, enabling the design and implementation of people strategies that are both legally robust and operationally effective.

Josie specialises in translating complex employment law and HR challenges into clear, practical solutions that support growth, reduce risk, and improve organisational efficiency. Her work often focuses on bridging the gap between policy and execution—ensuring that processes are not only compliant but also embedded into day-to-day operations in a way that adds measurable value.

Through Altum HR, Josephine leads a team of highly qualified consultants who share her commitment to quality, personalisation, and commercial impact. She is particularly passionate about raising standards within the HR industry, advocating for a more consultative, expert-led approach that prioritises long-term business outcomes over quick fixes.

As an author, Josie shares insights on employment law developments, operational best practice, and real-world HR challenges, offering business leaders practical guidance they can apply immediately. Her content is designed to cut through complexity and provide clarity in an ever-evolving workplace landscape.