Still, if the performance problems become too large to handle, termination could be the next necessary step; however, there are legal ramifications that should be considered before terminating an employee because of performance, Kovach says. Although statutory language of at-will employment states that an employer can terminate an employee for any reason with or without prior notice, it is not that simple. In reality, an employer must prove the employee was not terminated for discriminatory reasons.

"Employees can claim anything," Kovach says. "As the employer, your intentions may not be discriminatory at all. That employee really may have been a horrible performer, but if there's nothing to back that up and the factual evidence lends credibility to this person's claims, the employer is going to have a difficult time defending that."

Kovach recommends documenting each effort made to improve performance and any corrective action taken. Whether it's a verbal warning, written warning or performance appraisal, each step should be immediately dated and recorded.

"The best way to defend yourself is to show you went through this process of corrective action," Kovach says. "All that type of documentation will help an employer tremendously should that employee come back and say they were let go because of discrimination."

Many performance issues can be resolved before they turn into major problems by being consistent, Kovach says. Each employee should be treated in the same manner, which isn't always as easy as it sounds. Even the most unbiased HR managers and supervisors can sometimes treat their workplace friends differently, but this could breed even more performance issues by negatively affecting morale.  

"Not applying consistent performance management creates a culture of resentment for other employees who may be observing this poor performance and seeing their manager not do anything," Kovach says. "What then tends to happen is employees think if that person isn't doing anything, then they're not doing anything, either."

Being proactive can also resolve performance issues before they become habits, Kovach adds. If problems begin to arise, there is no reason to put off confrontation. By not immediately addressing any problems, a poor-performing employee could see his or her behaviors as acceptable.  

"The employee may realize they're not performing, but when you don't say anything about it, you're really telling the employee their performance is OK, so that employee will keeping working that way," Kovach says. "Sometimes, the employee has no idea anything is wrong, and you're doing that person a disservice by not telling them."