Is it the best policy to terminate an employee who is not performing up-to the level?

I agree with all these inputs, terminating employee is not the best strategy and should be avoided to the maximum, although it might be the only solution in some cases as mentioned in the previous posts.
Terminating low performers is a double aged procedure; it turn to be mandatory once all the solutions to develop him fail; nevertheless it has negative and positive impact on the workplace.
It might create negative attitude on the employees out of sympathy while it will be a differentiation to the high performer.

If there are performance issues with an employee, that person needs support.
Exellent opportunity to check out the overall dynamics, task-competence balance, stress, atmosphere etc and improve it.
Might be due to personal or family issues.
An employee is a valuable assett for a company, we should do everything in our power to help solving the situation by providing support, not getting rid of that person.

Both Qasim and Amal are absolutely right! A poor performer affects the performance of the team and in turn that of the organization as well.
If you feel the employee has potential and just needs the resources to perform better (could be training, mentoring, more engagement, etc.), make sure you provide all the resources for the performance of the employee to improve.
Almost always, working with the employee on a mutually agreed performance improvement plan yields positive results.
If the employee shapes up, great! If not, it might be time to disassociate quickly and amicably.
To conclude, I would not say that termination is the best policy, but sometimes it might be the only option left.
What would be important to remember is the protocol to be followed when terminating an employee- respectfully and professionally.

I agree with Qasim and all his inputs.
Apart from those, some employees also under-perform when they have extreme personal situations that may cause him/her to be distracted from work goals.
Speak with the employee, as in counsel, to help the employee manage both work and personal situations.
Or the employee may be working in a role in which he/she has little or no interest.
In this case, it would be best to speak with the employee, gauge his/her strengths/ weaknesses/ interests and then assess if/where the employee would be able to perform his/her best.
If the employee continues to under perform, then termination would be the last option.

Many companies have a system in place that permits an employee to go through a process before determining their fit with the company.
The employee may have a probationary period wherein he/she does not have privy to full benefits of the company until the employee can prove his/her competence in the specific field which he or she is hired.
At the end of that period a determination can be made and the employer can terminate the employee "at will" as he/she is just does not fit your needs.
After this point it is assumed that the employee can meet your standards.
Now if his/her performance slips you should meet with the employee and remind him or her of the standards and his/her need to make improvements to meet them.
Most companies have employee performance evaluations and the employee is aware of his or her performance.
If the employee does not meet those standards he/she will know the first step will be a warning.
The second the employee will be written up and put on probation.
Lastly is termination.
This is fair to the employee and at the same time protects your company.
You are not obligated to keep an employee who is not performing to your standards.
It is a good leader/manager/executive, who communicates with the employee and lets him or her know when they are just not a fit for your company.

Employee performance is evaluated by performance appraisal and if you have decent/transparent and trust worthy appraisal system then you know who is performing and who is not… Those who have performed in the last year will be recommended and those who haven’t performed will not be recommended (e.g salary will not be increased or benefits will stop for certain period etc)….
In some Organization, low performer will be reviewed after certain period (3 months or6 months) and their performance will be reevaluated BUT in before their performance are being reevaluated they should provide certain trainings, coaching, mentoring, counseling so they can improve their performance….
Termination should be the last option Many apologies MRUTYUNJAYA MALLICK for the delay reply....and thank you for refering me this question.....All the best

It may not be the best policy to terminate an under performing employee.
The first step should be to find the reason of the lack of performance.
At times, an employee is just burnt out which results in low performance or it could be a number of other factors such as:1.
Lack of recognition2.
De-motivation3.
Too much work4.
Lack of resources to complete the task at hand Sometimes, providing further training to the employee or giving them a more challenging task can also improve their performance.

it is not best policy rather the worst policy.
Because when a person is selected for a job that means he has the potential to fulfill the goal of the post along with the organizational goal.
If he is not performing up-to the level then try to find out where he is lacking.
As a team coordinate him, give support him to overcome the situation he is facing.
Give solution what can be the alternates for the reason of his failure.
if he is facing any personal problem then try to talk to him, give advices that will motivate him to work efficiently.
Because terminating and again Recruiting for the post will cost a lot to the company.
So it will be the last step if the employee is unable to perform at all.

No, it is not a good policy to terminate an employee who is not peforming upto the level. First of all you need to see into the reasons as to why he / she is not performing well. After all, it is the company which has recruited the same employee in first place. It needs to be seen whether the employee has been adequately supported in his / her job role. Also, an employee who has not been performing well should be counselled and ways suggested on how to improve his / her performance. Still if the performance does not improve, the employee may be issued1 or2 warnings and only then should an employee be terminated if efforts to improve his performance have failed.

Terminating people in my opinion, should be the last thing that any company should do unless an employee committed a grave offense.
Qasim pointed out some of the reasons why an employee is under performing.
I also agree with Amal about the employee's lack of interest and to Shobha's answer.
During counseling, focus on the employee's strengths, remind him/her when he/she was at his/her best, his/her contributions to the company, or do a Reflected Best Self (RBS) exercise.
Re-assignment or transfer to other department/division where the employee might be more interested can also be done.
This is why we conduct psychometric tests for candidates, not only to gauge them but in the future to see what are the other options for the employee or where he/she will be placed best.
There is always a reason why we hired an employee, if in case they are not efficient or not functioning well after the counseling, training, mentoring and re-assignment, then do not renew the contract.

Before you terminate an employee because of his performance issue, I think there is some steps needed.
First we have to determine the reason of the lack in performance.
some people may be needs training, others maybe unsatisfied, others maybe unqualified, and the worst some are just too lazy to work.
second we have to remove the reason(s) of this lack in performance.
you maybe don't know how much some people with brilliant ideas has this lack in performance just because the feel they are not important because no listens to them...