As soon as you start having real doubts about the performance or fitness of an employee, have at least two meetings with them to discuss the issues and create improvement plans and actions, before resorting to firing them.
Sure, as long as you understand that the need for improvement is as likely to like with management as it is with the employee. Shitty morale because of management political shenanigans, lack of engagement because nobody bothers to share the big picture or any information about what's going on, or boredom because the employee's skills aren't actually being utilized, are all management fails which can look like an employee problem. If management is going to sit with a "problem" employee, they better be prepared to look in the mirror a little as well.
While all of that is true, in my experience, quality people choose to end a relationship rather than allow others to drag them down.
I agree that that is true in the long-run, but there may be temporary circumstances where someone will bear some pain longer than they might otherwise... maybe they don't want to create a "job hopper" look on their resume, maybe they feel dedication to (some) of their colleagues, maybe it's a down economy and jobs are scarce in their market, etc. In either case, I contend that management should, ideally, be willing to accept that sometimes the required change is on their side.
That said, my experience is that poorly run companies usually don't seem to improve, and that the best option for an employee is usually to just leave, depending on any mitigating circumstances.
Sure, as long as you understand that the need for improvement is as likely to like with management as it is with the employee. Shitty morale because of management political shenanigans, lack of engagement because nobody bothers to share the big picture or any information about what's going on, or boredom because the employee's skills aren't actually being utilized, are all management fails which can look like an employee problem. If management is going to sit with a "problem" employee, they better be prepared to look in the mirror a little as well.