It's always a tough decision to make to fire an employee. No matter he/she performs how bad, it's hard for the boss to say one person is fired. How to fire an employee who is not good enough? On Quora, there is one such question asked and we think one answer is very attractive and useful.
The answer is given by Michael O. Church who is a New York functional programmer.
The best employees are multipliers who make others more productive, and next are the adders (workhorses). Subtracters are the good-faith incompetents who cost more than they bring. Dividers are the worst kind of problem employee: they bring the whole team (or company) down.
Right now it sounds like he's a subtracter. He's not a bad person, and he's not doing substantial harm, but he's worth less than he costs (including communication overhead).
Dividers: fire them immediately. Don't wait a day. Prefer severance over a "performance improvement plan" (PIP). Severance is cheaper than having a fired employee come into work for 2 months while you build a case. People tend to be averse to writing packages for bad employees, as if they're "rewarding failure", but this is business and it's not the place for that kind of emotion. Pay the go-away fee, but fire dividers as soon as you can. A divider can easily cost you $10,000 per day in damaged morale and internal friction.
Subtracters: good-faith employees who just aren't producing more than they cost. You're losing money on them, but in small amounts. If you can turn them into adders, try to do so. Most people start out new jobs as subtracters, and the problem may be project/person fit rather than the employee. Find mentors, move them around, and give them chances as long as (a) you can afford to do so, and (b) they remain basically decent (i.e. they're trying to do good work). This "not very bright" guy might surprise you if you change the context. I've seen that happen.
When you turn a subtracter into an adder, what you get is a very loyal employee: someone who was well-mentored and learned a lot. Three years later, you might have a bona fide multiplier. I've seen it happen.
You really need to ask yourself, "Is he hurting anyone?" If the only loss is that you're paying $100k per year for $80k-level work, then he's probably not an existential threat to your company. You should "manage him out" (i.e. find a way to convince him to leave with his dignity intact) eventually if you see no hope of improving, but don't be rash about it and don't be a dick. People talk.
Whatever you do, don't use a formal "performance improvement plan" (PIP). Everyone knows what it means when a manager starts "documenting". This process turns a subtracter into a divider instantly. If you see no alternative to letting the person go, then you should prefer severance over the PIP. HR departments like PIPs because they "save money" on severance payments, but the reality is that they externalize the cost to the team, making HR look good but forcing (a) managers to conduct a kangaroo court, (b) the team to deal with a walking-dead employee, and (c) the employee to decipher whether it's an honest PIP (rare) or firing papers; because in the latter, he should be treating the PIP period as severance (since a PIP usually means there will be no severance; that's why the CYA papers exist) and putting his entire effort into his job search.
Writing a package. Have an attorney draft it. Include non-disparagement, non-litigation, and non-disclosure of the contract's existence. Offer to let him represent himself as employed during the search for the next job. If this is a good-faith subtracter, offer a positive reference. If he's a divider and you truly believe he's toxic, stick to name and dates. By the way, it's never worth it to give a bad reference. Defamation lawsuits are usually less of an issue than wrongful termination suits, but the latter come down to "he-said/she-said" and the company usually gets the benefit of the doubt, but loses it the second a bad reference comes into play. Giving a bad reference can literally cost you millions of dollars.
For more answers, please take a look at : Firing: How do you fire an employee that just isn't good enough?
Before firing any person, please take careful consideration and do full evaluation the affection the decision you make.
Reference : http://www.36kr.com/p/153012.html