It’s the opposite of what you would expect. Instead of penalising employees who regularly miss deadlines and produce poor quality work managers often seem to reward them. Perhaps they raised their concerns with the individual but saw no improvement or even found them selves subject of a grievance by the employee claiming they were being scapegoated, victimised or bullied.
Following a discussion with HR who explained the need to set clear targets with time scales, hold regular one to ones to give feedback on performance and keep detailed records they decided it was easier and quicker to do what managers have always done and probably what the individuals previous manager did. Set less demanding work and get a trusted colleague to redo it if necessary. Don’t give the individual any thing to do that is important or urgent.
Identify secondment opportunities pointing out the experience would be good for their career prospects, thus removing them from the team and hoping they don’t return. Support them enthusiastically in applying to get on an MBA or any course that would take them out of the team for part of the week and encourage them to think they deserve a promotion. Recognise the years they have put in, the experience and knowledge they must have acquired and suggest this would make them ideally suited to a post in policy or training, who after all need more people who have actually done the job. If all else fails use the opportunity of the next restructuring to do away with their post.
If you think this is unduly cynical then speak to an HR colleague. HR are familiar with the conversation in which the manager asks how they go about dismissing an incompetent team member and the managers disappointment at the amount of evidence, time and effort involved if this is not to result in a successful grievance or constructive dismissal claim.
The reason incompetent is often rewarded is that it’s easier than challenging it. But there is a price to pay. Other team members will resent the incompetent individual getting away with it. They will question why they are working so hard when their colleague is doing so little. The managers authority will be diminished.