Some companies have very specific rules for handling employee discipline and behavior issues. That makes it easier for managers to know what to do when something goes wrong.
When I ran a branch of my family's business, for example, we had specific processes for handling various offenses. Something like punching a co-worker might get you an automatic suspension, while being late got you a verbal warning, followed by a written warning, then a suspension -- and then firing on any subsequent offense.
In many cases, however, smaller companies lack specific rules. They may have an employee manual, but it might be vague or leave a lot of room for interpretation. If that's the case and there are no rules you have to follow, there are some steps you should take when correcting employee behavior.
1. Get something on paper
Even if you don't have a full employee handbook, you should put a basic discipline policy on the record. This should include a list of fireable offenses, generally including (but not be limited to) physically attacking a customer or colleague, stealing, drug use, and perhaps a few others.
You will also want to lay out a disciplinary progression for lesser offenses. Lateness, which should be specifically defined, may earn multiple verbal warnings, followed by a written warning, a suspension, and then the option of termination. In many cases, for smaller issues a period with no violations (generally six months or a year) should wipe the slate clean.
There are countless free examples of employee conduct/disciplinary problems online. Find one that fits your type of business, modify it, and don't just distribute it to employees -- get them to sign it after reading it.
2. Follow your framework
Once you have a basic policy, stick to it. If you overlook offenses for one employee it becomes harder to enforce them for another.
If an employee violates a policy, make sure they understand the consequences. If, for example, a person shows up half an hour late, that may earn them a verbal warning. When that happens, sit him or her down and explain what will happen after further offenses.
3. Be proactive
If you have an employee who's become a discipline issue across multiple areas, try to address the problem ahead of time. Sit the person down and talk about the issues you have observed.
You may also consider offering an action plan. This is a formal document where you lay out what the employee is doing wrong and what steps he or she needs to take to correct the problems. This works well when an employee has performance issues as well as discipline problems.
4. Be clear
You won't be able to cover every possible scenario in a handbook or employee document, so as new situations arise you should communicate to your employees how they are being handled and what will happen going forward.
Solicit input from your staff. Be reasonable, but have a clear policy that applies equally to everyone.
Don't be afraid
Firing people isn't easy. But if you make exceptions to your policy for one person, that becomes the new normal.
That doesn't mean you shouldn't treat each case as individual, but if you make an exception to your policy, be prepared to justify it. Consider the circumstances and examine all the evidence -- and when the situation deserves it, be prepared to take the needed disciplinary action. If that means firing someone, you have to fire the person. That's not pleasant, but it's an important part of running your business.