Four criteria can help you determine the most appropriate level of
discipline to employ in any particular circumstance:

1. The severity of the offense
2. The employee’s past performance record
3. The individual’s length of service with your organization
4. Your company’s past practice in dealing with similar infractions.

Follow the traditional disciplinary paradigm of:
1. Verbal warning
2. Written warning
3. Final written warning

unless starting with anything less than a final written warning could
make you appear irresponsible.

Courts have ruled that employers are obligated to fit the discipline
to the offense. A slap on the hand isn’t appropriate, for example,
when egregious conduct occurs. That’s why sexual harassment
or discrimination findings typically start at the written or final written
stages of discipline—even for a first offense.

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Conduct-related infractions typically provide employers with the most latitude in composing a company response. Take the case of
employee theft or embezzlement. Such misconduct warrants immediate termination. A summary dismissal is appropriate because you can’t send a message that says, We’ll forgive you this time, but if you do it again, you’ll be fired. On the other hand, performance- or
attendance-related infractions typically require employers to provide
full workplace due process in the form of written and final written warnings.

Taken From : The Hiring and Firing Quention and Answer Book