Definition
A formal process for managing employees whose work performance falls below the required standard despite informal support. It provides a structured framework for setting clear expectations, providing support, and escalating consequences if performance does not improve.
UK Context
Capability is one of the five potentially fair reasons for dismissal under the Employment Rights Act 1996. The ACAS Code of Practice on Disciplinary and Grievance Procedures applies to capability dismissals. Employers must be able to demonstrate they set clear standards, provided support and training, and followed a fair procedure before dismissing.
Best Practices
- Distinguish clearly between conduct (behaviour) and capability (performance) issues as they require different approaches
- Set SMART improvement targets with a reasonable review period, typically 4 to 12 weeks depending on the role
- Offer genuine support such as training, mentoring, or adjusted responsibilities during the improvement period
Frequently Asked Questions
How long should a performance improvement plan last?
There is no set legal period, but it should be reasonable given the nature of the role and the improvements required. Typical periods range from 4 to 12 weeks. The period should be long enough for the employee to demonstrate improvement but not so long that it becomes indefinite.
Can an employee be dismissed for poor performance?
Yes, capability is a fair reason for dismissal, but the employer must follow a fair procedure: identify the shortfall, set clear targets, provide support and time to improve, conduct formal meetings if improvement is insufficient, and offer the right to appeal. Without this process, the dismissal is likely to be unfair.