@samuel5
Try and remember that the employees are NOT your friends, honestly they wont give a toss about you. No matter how well you look after them if they think something else comes along that's better, they are off and wont give you a second thought.
If your business runs into trouble they can move onto another job, not so easy for you. Are they going to pay your rent/mortgage then? You must think of you and your family first. If this employee is not doing the job required, cut it, you are not a charity. Please remember that.
I was actually a lot like you at one point. There was a competitor in my area where the CEO was a first rate C U next Tuesday, he maximised the output from his staff and his staff hated him, many would apply to me as they hated working there. Meanwhile i thought it doesn't have to be that way. I was nice to my staff, really flexible, family first policy, paid them well gave them bonuses, even gave the mums that had children selection boxes at Christmas, if they needed time out for something no problem etc etc. My competitors business financially was significantly more profitable than mine but i didn't mind that. I was happy "doing good" in my mind and rubbing along.
Trouble is that staff now in 75% of cases actually see that kindness as a weakness they can exploit, whatever you give them, they will want to take that little bit more from you, slowly more and more. Over period i eventually got totally hacked off that some would keep trying it on (oh porky will be ok with that wont be a problem) i paid staff in full if they were off sick not SSP, one employee had treatment and time off for cancer and i kept her on full pay, she had mortgage etc and she was returning, she was treated and got better but when she came back she did a couple of weeks and then decided she was going to another company for better prospects, so much for loyalty. In another case rather than sack someone materially not performing i was nice, discussed it, they realised they were well out of their depth, I offered them a good reference to help find work elsewhere, called it redundant rather than being sacked again to help them get employed elsewhere, next thing they trying it on for more compensation via ACAS. Had i been a total bs'tard and sacked them immediately it would have been cheaper. I can give you numerous other examples similar where my good faith was never returned. Ultimately i came to the realisation that being nice actually counts for sh@t you will just get abused.
It doesn't change who i am now and its a shame for the handful of decent workers that its been spoilt by the majority of "takers" but it is how it is. Sad indictment of society in general but things have changed, attitudes have changed, staff no longer want to prove what they can do and be rewarded, they expect to be rewarded on what they might be able to do and in majority of cases value there ability way way higher than anything like where they are. It is what it is.
So i feel I'm qualified in saying, if employees are not performing, just cut them. In this situation, its good of you to offer an alternative in packing but ask yourself this "would this person be your first choice when recruiting someone in packing?" if there are fitter more able workers applying for that role you should give them the job, not someone just because you feel sorry for them. As for making up the pay difference with other work are you offering that to anyone else? because if you are not the other staff could claim being unfairly treated? have you considered that.?
I have been there and worn the t-shirt, in one example i gave someone something like four different roles and they were dire at every one of them ultimately they went and i regretted not sorting it sooner.
Hope my post albeit long helps you reflect, seriously you need Rhino skin in business, you need to harden up as i fear you will be taken advantage of for sure.
Take care, Good luck
