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First step, if Terry have not already talked with her, find out what is going on in her life. It could be more than a slack person. I had a friend who recently talked with an employee who was calling in or being late a lot. My friend found that her employee was having to take care of a younger sister because her dad was terminally ill and her mom was working 3 jobs because insurance was not paying a large portion of the bills. So, the girl was so stressed out and did not want to talk about it and almost lost her job! But, my friend worked something out. Sometimes things can't be worked out and sometimes the person is flat lazy or not a dependable person. So, after finding that out-next step.
Step2- Write the person up. This is always a good way to wake someone up a little. Maybe she just feel that they can do what she want with no repercussions. Maybe you are too nice of a boss, or maybe she just don't care that much about their job. But, if you write her up, you will find out all of that out.
Step3- If it continues, write them up again or have your boss have a chat with her. Of course you would have to consult your HR dept or manual on policy.
Step4- If you have done all of the above and nothing is changing and if you have the power, let the person go. There are a lot of people out there who would value you as a boss and value the position that this person has been blessed with.
Some people are just people who settle or do not have ambition and you can do nothing to change that. But, after doing all of the above and all else fails, this person will not be your worry and someone else can deal with their problems!!!!
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