It shouldn't be looked at that way and it's not black and white. Ideally they're treated like people, not cogs, and the manager and company does what it can to either get the person the skills they need to succeed, move them to a role they can succeed in, or give them a path out in a reasonable amount of time.

Most of the time the under-performer will be happier after any of these scenarios than they would knowing they're under-performing in their current role. It just takes a bit of time and maturity to realize.