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When you have a problem employee on your hands, you can't afford to waste valuable time moving through endless steps to final termination. Adopt the three-letter approach and watch your personnel problems disappear.

A progressive discipline system allows you to let employees know "how they're not meeting expectations and gives them a chance to turn around," says labor attorney John Gilliland with Gilliland Markette & Milligan in Indianapolis. Your goal is to help the employee shape up and meet performance standards--"not to set in motion a discharge," he stresses. Don't Rely Solely on the Performance Review If a staffer starts coming in late, you can't wait until her annual review to address the tardiness. "Problems that are left to fester will gain momentum and have the potential to create bigger challenges," confirms Kevin Calvert, CEO of United Sports Fitness Corp. of Indianapolis.

"If you're really trying to change conduct, the performance reviews need to be much more often, such as quarterly," recommends Gilliland. You can even step up the pace and tell an employee to get something straight for the next review, "which will be in a week," he suggests. 'Three Strikes, You're Out' Works Best Progressive discipline takes all forms, but the best format is the three-letter system because you find out early in the process if the person is going to turn around, advises Gilliland.

Rule: Remain firm but non-confrontational, experts say, giving staff opportunities to reform three documented times so that you know you did all you could.

With the three-letter system, you have everything in writing if you want to fire someone. "I've seen over and over again where employers are ready to discharge but haven't put it in writing. You really want that documentation," says Gilliland.

An immediate supervisor rather than upper management should provide any counseling and write the letters, says Gilliland. Otherwise, "why are you paying this person to be a supervisor if you're not letting them make these decisions?"

Here are four fundamental steps:

1. Counsel the employee. Oral counseling often precedes the first letter, says Gilliland. "Most employees turn around at the oral counseling stage and never get a warning letter.

The supervisor should document that they had a discussion and what both sides said, advises Michael Weinper of PTPN in Calabasas, CA.

2. Write the first warning letter. Often, employees who don't change after oral counseling will turn around immediately when they get the written letter, observes Gilliland. "They're often embarrassed that they got it."

In the letter, spell out what behavior will not be tolerated and the correct behavior, advises Weinper. Both the supervisor and the employee should sign this. "The employee doesn't have to sign that [...]