Managing Poor Performance and Capability the Right Way

Underperformance: deal with it early, deal with it fairly

Picture this. You hired someone great. Months later, targets are slipping, your inbox is full of complaints, and you are awake at 3 a.m. wondering what to do. You like them. You want it to work. But it is not working.

So let us take the fear out of it.

This is your plain-English guide to handling poor performance the right way. Spot it early. Work out what is really going on. Follow a fair process that gives a genuine chance to improve and protects your business if it does not.

No legal jargon. No winging it. Just a clear path through.

Quick Answer Box

• Do this: have an honest informal conversation first, then move to a formal capability procedure with a clear plan, support, and a fair timescale if things do not improve.
• Avoid this: ignoring it, jumping straight to a warning, or treating a genuine inability to do the job as if it were misconduct.
• Write down: dates, what was discussed, the standards expected, the gap, the support offered, and what was agreed at each step.

Conduct or capability?

The question that changes everything

Before you do anything, decide which one you are dealing with. They are handled differently.

• Conduct is about behaviour and choices. Turning up late, being rude, ignoring instructions, breaking rules. That is disciplinary.
• Capability is a genuine inability to do the job to the standard you need, often despite effort. They cannot do it, rather than they will not. That is capability.

Why does it matter? Because if you treat a willing but struggling employee as if they committed misconduct, you start unfair and you tend to stay unfair. Most poor performance cases are capability, not conduct.

The ACAS Code of Practice on disciplinary and grievance procedures is the benchmark a tribunal will measure you against. It is worth reading once, slowly, with a cup of tea: ACAS Code of Practice on disciplinary and grievance procedures

First, work out what is really going on

A dip in performance is a symptom. Not a diagnosis. Before you pick a procedure, get curious.

Ask yourself:

• Has this person always struggled, or has something changed recently?
• Do they actually know what good looks like in this role? Have you ever spelled it out?
• Have they had the training, tools, and time to do the job properly?
• Is there something going on at home, with their health, or with workload or priorities?
• Could this be linked to a disability or a mental health condition?

That last point is not optional box-ticking. If underperformance may be connected to a disability, the Equality Act 2010 gives you a duty to consider reasonable adjustments before you treat it as a plain performance issue: Definition of disability under the Equality Act 2010. Skip that and a tidy capability process can turn into a discrimination claim. If you suspect health is a factor, that is the moment to get advice.

Often, the honest answer is that nobody ever told the person clearly what was expected. Or the role changed under them. Fix the cause and the performance problem sometimes dissolves.

Mini story: a client had a coordinator who was missing deadlines. We mapped her week and found two managers were feeding her clashing priorities. Clear priorities, one owner, and a short training boost. Deadlines back on track within a month. No warnings needed.

Step one: the informal conversation

Start here. Not with a formal letter.

Sit down somewhere private. Be specific and kind at the same time. The goal is clarity, not a telling off. Our guide on what great managers say in tricky conversations is a good companion.

A manager script you can adapt:

> "I wanted to talk about how things are going, because I want you to do well here. I have noticed [specific, factual example]. That is a gap from what we need, which is [the standard]. I would like to understand what is getting in the way, and agree how I can support you to close it."

Then listen. You may learn something that changes the whole picture.

End by agreeing what good looks like, what support you will give, and when you will check in. Write a short note afterwards. That note is a record that you were fair and clear.

Step two: the formal capability procedure

If the informal route does not work, move to a formal capability procedure. Structure protects everyone.

A fair procedure looks like this:

• Invite the employee to a formal meeting in writing, explaining the concern and that the meeting is part of a capability process.
• Tell them they have the right to be accompanied at the formal meeting by a colleague or a trade union representative. For the detail on who can come along and what they can do, see who can accompany an employee at a disciplinary meeting.
• Hold the meeting. Set out the specific shortfalls with evidence. Genuinely listen to their side.
• Agree a Performance Improvement Plan, often called a PIP.
• Set a review date.
• If performance does not improve, the process can move through warnings to, at the end, dismissal as a last resort.

The right to be accompanied at formal meetings is a statutory right. Do not skip it because the business is small. It applies to you too.

Building a Performance Improvement Plan that is actually fair

A PIP is not a sacking countdown. Done properly, it is a real attempt to help someone succeed. Done badly, it is a tribunal exhibit.

A fair PIP has:

• Clear, measurable objectives. "Be more proactive" is not measurable. "Respond to customer emails within one working day" is.
• The support you will provide. Training, mentoring, shadowing, adjusted workload, more frequent check-ins.
• A reasonable timescale. Long enough to show improvement, given the role and the gap. There is no fixed legal period, but rushing it reads as a stitch-up.
• Review meetings built in, so progress is tracked and the person is never blindsided.
• A clear, honest statement of what happens if the standard is not met.

Tribunals look at the fairness of the chances you gave. Clear standards, real support, and decent time. If you can answer yes with evidence, you are in a strong position.

Warnings, reviews, and dismissal as a last resort

If, after genuine support and a fair timescale, performance still falls short, the process can escalate:

• A first formal warning, with a further review period.
• A final written warning if there is still no sufficient improvement.
• Dismissal only at the very end, after a fair hearing, with the right to be accompanied, and a right of appeal.

Two things matter throughout. Keep offering support, even at the warning stage. Keep your process consistent with how you have treated others. Inconsistency is one of the fastest ways to lose a case.

A note on the law

At the time of writing, ordinary unfair dismissal protection generally requires two years of continuous service, unless the reason is automatically unfair or discriminatory. There have been proposals to make unfair dismissal a day one right. Law changes move fast, so check the current position on ACAS or Gov.uk before you rely on length of service.

Honestly, the smart move is not to lean on a qualifying period at all. Follow a fair process from day one, every time. It is cheaper than a defence and it is how decent businesses run anyway.

Common mistakes (and the fix)

• Mistake: ignoring it and hoping it improves.

Fix: address it early, while it is still a quiet conversation rather than a crisis.

• Mistake: treating capability like misconduct.

Fix: decide which it is first, then pick the right procedure.

• Mistake: vague objectives nobody can measure.

Fix: write objectives a stranger could mark as met or not met.

• Mistake: a PIP timescale that is impossible to hit.

Fix: make it genuinely achievable for the role.

• Mistake: missing a possible disability or health link.

Fix: pause and consider reasonable adjustments under the Equality Act before going further.

• Mistake: no notes.

Fix: write a short record after every conversation and meeting.

A manager script for the formal meeting

> "Thank you for coming, and thank you for bringing [name] with you. I want to be clear and fair about why we are here. The standard for this role is [X]. What we have seen is [specific examples with dates]. I want to understand your perspective, and then agree a plan with support and a fair timescale so you have a real chance to get there. Nothing is decided today."

Calm, specific, fair. That is the job.

What to write down

Keep a simple file for each case containing:

• Dates and notes of every conversation, informal and formal
• The standard expected and the specific gap, with examples
• The support offered and provided
• The PIP, objectives, and timescale
• Review meeting outcomes
• Any warnings issued and the employee's response
• The reasoning behind any decision

If it is not written down, it is hard to prove you were fair. Memory gets wobbly. Files do not.

When to get help

If the situation is tangled, if there is a possible disability or grievance in the mix, or if you are moving to dismissal, get advice before you act, not after. That is exactly the kind of thing our HR Protect clients and HR Advice Line callers use us for. A steady hand on the process so you stay fair and protected.

If you are not sure your current approach to performance, capability, and disciplinary procedures would stand up, book an HR Health Check. No judgement. Just a clear view of what is working, what is risky, and what to fix first.

You can also book a discovery call and talk it through with a real person before you take a single step.

Deal with it early, deal with it fairly, and write it down. Kettle On. Standards Up. Keep buzzing and take care of your people!