Imagine you have this amazing employee. He shows up on time and sets a reliable schedule. He communicates well. He anticipates what you might need and he does it for you without asking. In general, this employee is a model the others could look up to. All employees should have it as together as this guy. You hired him, despite hearing rumors that he wasn't always so amazing, but for you, he performs. But then he doesn't.
It starts when he stops communicating with you. You ask him his schedule and he tells you to check his Facebook or ask his friends. Won't it be all the more surprising and a joy for you when he magically shows up?
You complain about his poor performance and he tells you it must be you who has the problem. And isn't it great that your other employees are doing so well? Go focus on them. He has no suggestions on how how his performance could be improved. The employee continues to perform poorly, noticeably becoming a problem, and then what does he do? The final straw: he asks for a raise.
Yeah, about that.
At a certain point that employee needs a reality check. They need to understand that no, they won't be getting a raise. That no, their performance is not up to par. Perhaps their hours need to be cut at first, and if over time they still don't improve, terminating them is in order. No matter how good an employee might have been in the past, if they aren't performing now, when it matters, they are of no use to you as their employer.
I am, of course, talking about Games Workshop.