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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.