Sometimes employees simply don't fit. There are those who steal and those who don't do their job, but for the most part, "problem" employees often just don't fit the organization. One advantage of having been a manager in business before owning a store is I can look at a problem employee and imagine an environment where they would fit.
Invariably, that environment is a setting with stronger management and more employees. They would make good steadies, excellent cogs in a well oiled machine, often performing one role. In retail, you have to perform many roles. Specialization is a luxury we don't have room for, either for them or for me. "Steadies" make up maybe a third of the workforce, they say. Everyone looks like an alpha employee on their resume, so hiring a steady is something that just tends to happen.
You can be great at running events, while being bad at customer service. Or great at customer service, but terrible at cash handling. In a larger organization, we could take that person, put them in a narrower position and they would shine. We wouldn't care that Bob can't handle money, because damn he can organize events like a pro. In fast food, the cashier rarely flips the burgers.
Likewise, a star employee is always one who can perform in multiple areas with great aptitude. That jack of all trades all star employee is the holy grail of retail, but in an office environment, they would likely be stifled. Nobody needs a jack of all trades accounts receivable clerk. Just watch the AR clerk make suggestions to IT and you'll see how much the jack of all trades is appreciated.
The big difference between a star employee and someone you want for a manager? They have vision. They take their skills, see where the business needs to go, and they have the initiative to move the business forward without your urging. They channel your energy.
My last manager got his job by helping me move to our new location and taking up responsibilities when I needed help. He asked. I was relieved to get the help. My current manager started by cleaning the bathrooms and quickly took an office manager role, organizing and moving us forward in that area. These people move the ball down the field, to use a sportsball analogy. They don't need to score touchdowns, just move it a few yards further. I've had frustrated potential managers who didn't understand this.