Dear Deepa,
The situation you have narrated is not unique. Many companies face this at some point. This is what we call a wrong hire. Please understand, in these circumstances, it's easy for everyone to point out the folly of the people involved – that they are not producing output even though they are being paid highly.
Let me start by asking this: Who decided to bring them in with a high salary? When such a decision was made, what was the reason for selecting them – what skills did they possess that were identified as valuable to your company? After joining, has your company been able to provide them with all the support needed to make them successful? Have you all been able to make them understand what is expected of them even before joining time and if it aligns not only with their aspirations but also with their abilities and skills?
Some individuals take up roles for various reasons – some for the sake of it, others for the opportunity to add value to their profile or for a salary increase, and yet others because they genuinely believe they can accomplish the work and enjoy doing it. However, even with these motivations, success is not guaranteed. People who fail are not necessarily losers and may excel in a different work environment. One aspect you have not addressed is whether they have been exerting effort in their roles. As an experiment, placing the person in a different work area might improve their performance at times.
I have mentioned all this for the simple reason that there is only one solution for a wrong hire for all concerned parties – to gracefully release that individual as soon as possible!
Warm regards,
Sagar