This velvet glove approach is typically somewhat challenging to deliver, but it lowers the tension in the relationship immediately. It’s always better to tell people where they stand than to make them
‘‘divine’’ from their managers’ actions that they’re not wanted. When people are treated professionally and respectfully, they’ll typically
respond in kind.

Are there downsides to this intervention technique? Not really, as long as:

You’re careful to ensure that the employee understands that this is her decision (thereby avoiding a constructive discharge claim later down the road)
You advise her of the objective performance standards she’ll be responsible for meeting if she chooses to stay
You carefully document the meeting, including the employee’s
response

Just remember that it’s your meeting—not theirs. Tell them that
anything’s open for discussion as long as it’s said with the other
party’s best interests in mind and in a spirit of constructive criticism.
There’s no attacking and no need for defending, and the meeting
will be stopped if you sense that either party is breaching that rule.
You’ll get to the truly human concerns at issue and allow your
employees to take back control of their careers. In fact, for some
troubled employees, you may be giving them a chance to take back
control of their lives.

How often does this approach work? It depends. In my experience,
it’s an 80–20 game: 20 percent of the time employees choose to resign on the spot or at least tell you that they’ll agree to begin
looking immediately for other work. That may not seem like a great
track record, but if you look longer range, you’ll find that many
employees leave the company within three or four months after a
meeting like this.

After all, no matter how angry employees are at the company, they’ll come to realize that fighting an uphill battle makes no sense. When angry people are treated respectfully, their anger dissipates. And when the anger is gone, they feel less inclined to stay with your company ‘‘on principle.’’ More important, they’ll leave quietly, on
their own terms without all the histrionics and threats of lawsuits.

Taken From : The Hiring and Firing Quention and Answer Book