[RickM]

Personally I would look for what might motivate him. Have a candid conversation and tell him of your observations. If there is a particular interest he has that will spark his enthusiasm see if you can accomodate. Believe it or not many slackers are very salvagable. Sometime they feel beaten down, passed over and generally fall into a negative groove.

I'd also folow up with detailed quarterly reviews (for the rest of the group as well). If improvement isn't on his agenda you'll have a good case after a few reviews.