That’s a great idea, and likely what I’d do also. Without being there to evaluate the factors that could be causing her failure to meet productivity expectations, I can’t really point you in any particular direction, but almost always, I find that these failures are due to one or more of the following:
1.) Inexperience/Lack of Training: If the services are being performed in a timely manner, than this cause can be eliminated.
2.) Retention Failure: If the rebooking rates are low, she’s not meeting client expectations, or she’s behaving in a way that’s unbecoming to them. I’d keep an eye on her conduct and her output to determine where the problems are and take corrective action based on that assessment.
3.) Marketing Defects: If new client acquisition rates are low, then the problem is with the salon’s marketing. The solution there is simple–evaluate the current advertising strategy and make changes. (For the record, I consider marketing the job of the salon owner/manager–not the responsibility of the employee, although I do agree that employees really should promote the business as much as they can since it benefits both them and the business.)
4.) Lack of Motivation: Lazy employees are the ones who hide in the break room when walk-ins show up, or shift customers to other professionals. You see this a lot with hourly employees who lack effective commission incentives to perform. The problem is either with their work ethic, or the salon’s compensation structure. I advise doing what’s best for the business in regards to bonus distribution–not what meets the demands of a disgruntled employee. You can be fair without strangling the salon’s finances. If the employee isn’t happy with the structure, she’ll need to find a new job.

I know this response is late (crazy travel schedule), but I’m going to answer you because this question definitely needs one.

Honesty is the name of the game here (and well, everywhere if it were up to me). I’d arrange a lunch or dinner date to talk to her about it. If she refuses, ask if you can speak at the salon about it. Apologize for her finding out the way she did and not coming to her directly, then explain exactly why you didn’t. If she has a history of being a little crazy when people quit, tell her that. Just like employees need to be told exactly why they’re being fired, employers need to know exactly what behaviors drove certain decisions (the decision to quit and the decision to withhold notice, in this instance). As a renter, you’re in the very unique position of not owing her notice of any kind, so she’s not entitled to expect it of you. The rebellious part of me wants to tell you to tell her just that (“I’m a renter, not an employee. As long as my rent is paid up and I comply with the lease provisions, you’re not owed ‘notice.’), but Responsible Tina’s suggestions differ, lol.

Hi Denise! I’ll answer this question in a full post (discussing the ethics of this maneuver by your renters and more), but for now, here’s the short answer:
You can evict her if you’d like, and if I were you I would. I suspect she’s choosing to stay so that she can continue to recruit renters for her friend from within your salon. I’d say that represents a significant conflict of interest and would definitely be grounds for eviction.

Hi Maria! I’ll make a longer post about this just for you, but until then, here’s my short answer: 1.) Contact the state for a replacement and 2.) Find her a new job. My post will go into the ethics of this move (which, for the record I absolutely don’t agree with) and how the salon owner should have handled this situation.

I’ll write a post about this just for you, Melissa! This is a fantastic question! (Short answer: if you’re an employee, they can. If you’re a renter, they cannot.)