I have always been a fan of incentive based performance.
In order to do this, you must have tangible accountability systems in place.
You also have to specifically identify the weaknesses you are try to improve upon.
Is it ticket turnaround times? Assisting in other stations when they are being slammed?
Is it simply showing up on time?
Attitude, laziness etc?
Each issue might have it's own solution. I have found that proper and in-depth training can solve a lot of problems, as well as a detailed list of responsibilities.
I used to have an extremely talented saute guy who was the ulimate high maintainence employee. (Think babysitting/mom)
Nobody could rock that station during $5000 hours like this kid could. But I also couldn't get him to show up on time to save my life.
I pulled him aside one day before opening and told him that I thought he really had management and trainer potential, but I could even consider promoting him unless he got his act together. Show up on time, help your fellow line cooks when they are slammed and your not. Do your proper close and pretend you're happy, even if your not.
I told him that if he did all this for one week, I would give him a $1/hr raise.
If he continued to do this for 3 months, I would give him another dollar and promote him to AKM.
After 6 months, I promoted him to AKM. This was almost 9 years ago, and he's been the KM for the past 4, doing a stellar job and making almost $50K and never been happier.
That's just one example, but it really depends on the environment of your establishment, the quality of your labor pool etc.
I was in a very tough labor market, and any one of my cooks could have worked elsewhere for more money (and some did) but they always came back eventually because I treated them with respect and fairness and gave every hard worker opportunity to advance.