Performance Capability

It is important for an employer to manage employee performance effectively, in order for the organisation to operate at maximum capacity.  An underperforming employee can have a negative impact on the organisation, as it can affect productivity.  Therefore, if capability issues are identified at an early stage this can help identify what further support or training is required.

Employers need to be able to manage their employees’ performance in order to allow each individual the opportunity to improve.  The aim of a performance management process is to ensure all employees contribute in the best way possible to the company’s long-term goals and objectives and, in particular, that they effectively contribute to individual and team objectives.    

For new starters, having regular reviews at the 4-week, 3-month and 6-month stage of the probationary period will help identify any performance issues early on.  In addition, by providing a clear job description at the outset which clearly outlines job duties, expectations and performance requirements, the employee will fully understand what is expected of them i.e. this will avoid any ambiguity. 

Where performance issues are identified, in the first instance the employer should try to find out why the employee is underperforming.  If they have always delivered a good standard of work and suddenly this diminishes the employer should question why this might be the case.  There could well be underlying factors which are not obvious, for example a personal issue at home may impact upon the employee’s ability to effectively perform their role.   Financial and mental health problems may also contribute to poor performance levels.

If there are no apparent reasons for underperformance and the underperformance is continuous, a clearly defined support plan should be implemented which identifies further training and / or support.   Timelines for improvement should also be clearly discussed and documented, with regular reviews thereafter.

An informal procedure should be adopted initially.  A carefully structured and supportive discussion will likely establish the root of the problem and avoid the need for formal action to be taken.  Where informal procedures are implemented, the employee must be advised that a failure to improve could likely lead to formal procedures being adopted. 

Where capability policies are in place, the employee should always be provided with a copy of this, at the outset of any discussion.   

Objective of the Performance Management Process

The objective of the performance management process should always be to support the employee in being able to deliver an acceptable level of performance over a set period, and to demonstrate continuous improvement. 

If the employer later choses to dismiss an employee on the grounds of capability they must be able to demonstrate they have following a thorough and fair process, if they are to avoid the risk of a tribunal claim and/or having to defend a claim of unfair dismissal.   

Timescales for Improvement

All cases of under-performance should be reviewed, taking into account individual circumstances.  To assess if a period for improvement is reasonable, the following would need to be considered:

• The employee’s performance in the past – for example if the employee has been employed for a considerable length of time and their performance has previously been good, they should be given longer to improve their performance;
• The duties and nature of the role – an employee may be able to improve sooner in certain aspects of their role than others, dependent upon the technical expectations;
• The administrative resources and size of the employer – if the employer is a small organisation, it may be more difficult to support the employee throughout a lengthy process than a larger organisation;
• The employee’s personal circumstances – there may be external factors which are affecting the employee’s performance, for example health issues, family issues, bereavement. Always try to get to the bottom of the issue and don’t make assumptions.

If the employee subsequently fails to reach the required standard, within previously agreed timescales, a formal process should be implemented. 

At all stages of the process, the employee should be advised of the specific areas in which they are failing to meet to the required standard and should be advised of the potential outcome(s) should they fail to improve. 

The action which is taken for each individual case should be that which the employer considers to be the most appropriate in the circumstances; consideration also to be given to any similar historic performance issues.   

Right to be Accompanied

Where an outcome could ultimately lead to dismissal, the employee should be provided their statutory right to be accompanied at any formal capability meeting (s.10 Employee Relations Act 1999).  The companion should be either a fellow work colleague or trade union representative. 

In addition, a note taker should be present wherever possible at each meeting in order that a written record of the discussion is taken and subsequently agreed.  This can also assist in the event that a future dispute arises.   

Capability or Conduct

Often employers are unsure as to whether they should deal with an employee’s poor performance via a disciplinary procedure or a capability procedure. 

Capability relates to when an employee is unable to attain expected standards of performance due to a lack of skill, health, ability, training etc. Conduct meanwhile relates to an employee’s behaviour at work not reaching the required standards. The key difference is the level of control an employee has over the situation.

When we are talking about someone that cannot do something, this is a capability issue. The individual is willing and trying hard, but despite the employer providing training and support, they are struggling to perform. This should be dealt with through an employer’s performance/capability procedure.

The purpose of the capability procedure is to encourage the employee to improve their performance, and the employer should provide the employee with additional training and/or support where necessary, but ultimately if the individual does not have the ability to perform the role appropriate action will be justified. 

When we are talking about someone who can do, but will not do something, this is a conduct issue. This means that the employee has the necessary skills, experience and/or has been provided with adequate training to perform their role, but they are still failing to meet the necessary standards, due to, for example, laziness, dishonesty, lateness or an unwillingness or refusal to carry out duties or follow reasonable instructions. These types of issues should be dealt with through a disciplinary procedure.

For advice on how to implement and follow a capability policy please do not hesitate to contact the team.