When an employee is fired, the first statement tends to be “Everyone is replaceable”. Oh sure enough everyone is replaceable, but is the cost worth it?
Ideal scenario would be something where a manager would rationally examine a dismissal before making a conclusion and all the while keep emotions out of it. A sensible manager would analyze the cause of the problem, see if it can be fixed, and if it cannot be fixed then (and only then) decide on dismissing an employee after fully considering the effects of the dismissal.
Sure enough, try hard enough and you will be able to find someone who can fill the position. The problem is that the new person does not have a clue of the history and neither does he have the expertise that comes from having worked the job for a while. If you lose someone, that means that you have lost that expertise of how and what the organization does, the history of how things came to be the way they are and of course the human relationships.
If you are considering firing an employee whose performance is failing, stop and think for a moment: whose fault is it? If you hired the person, are you not responsible for a judgmental error of his/her capabilities? Is it (at least partly) not your fault for not providing oversight or not having the employee in the right job for their skill set?
Maybe the person is not right for the current job and needs to be moved to another department. But if you decide to move a person to another department, firing the person for past non-performance is probably the silliest thing that you can ever dream of doing.
Also, should an employee’s performance that has been great in the past be dropping for reasons that are not work related - perhaps a divorce or any other personal problem, a better strategy would be cut back on the work load. Remember, the employee will be there the next year while the problems might not be there.
Having considered the past, present and followed the HR guidelines for performance improvement; the next step would be to consider the costs of dismissing the employee and then weigh them against the cost of working around the problems.
Yes, there are enough professionals out there who you think can fill the position. But it still takes time and money to search for, interview and finally hire a replacement. And that’s not all, there are subsequent costs incurred in training and the learning curve that cannot be eliminated if you want the replacement to assimilate the processes and culture. And finally, you have to consider the impact on the rest of your team. Do not underestimate how they will view the termination, for if they do not believe that the person let go was treated fairly, you sure have trouble at hand.
As a special case, remember that true leaders can probably never be replaced. The best you can do is calculate the damage that would be caused by losing them. Their brain contained vision, knowledge and the game plan that you have lost for ever. Of course not everyone in a leadership position is a true leader, a true leader is one with a vision and the backing of the people whom he is leading. So apply this clause with caution.
So you have done the analysis and feel that you can replace the person and the costs are acceptable, you still should not rush. Before you actually take the decision, it might be a good idea to talk to the peers of the person whom you are about to let go and also your peers - they might have information that you might have overlooked. And finally, you want to handle this in a way that is professional and courteous; do not let this become an ego trip.
As a side note, if you are the manager who thinks he must (or can) dismiss his entire staff, it is best to take an even handed and fair approach to the termination process or else you might find that you are also replaceable.