I happened on an excellent session from Catalyst 2008 with Andy Stanley interviewing Jim Collins about keeping employees who are a poor fit in a position. Andy says that churches are all about mercy — so sometimes, out of compassion for the employee, we keep people in positions for which they aren’t a good match. Watch Collins’ reply here.
There’s a great point in there, too: “The moment you feel the need to tightly manage someone, you’ve probably made a hiring mistake.” (Watch Stanley’s face when Collins says that.) That’s an excellent clue and we ignore it at peril to our mission.
Another excellent point: instead of giving people titles and rules, give them responsibilities. People should be able to say, “I am the one person in this organization who is ultimately responsible for [whatever it is].”