Dear Aastha,
You could have little more information about the employee whom you want to terminate. What type of job he does? How many years has he worked? Have you provided any training to augment his performance? Did his manager provide him any support to elevate his/her performance? Is it that his/her performance good earlier but lately it has been nosedived?
Before terminating, you need to conduct the domestic enquiry. In the enquiry, you need to give chance to employee to defend his case. In the enquiry, if the non-performance is proved then you may take disciplinary action and it could be termination of employment also.
The another factor that is worth considering is beyond your query. Taking action against the under-performing employee is fine but was it wrong recruitment? If yes, then who is responsible for the wrong selection?
Thanks,
Dinesh Divekar