[jasonkester]

You left out the important bit: Is he actually working less than 8 hour days (or whatever is the norm in your country), or is he simply working less hours than the rest of the team.

Only in the first case do you need to have that difficult talk with him. In the other case, the best plan would be to use him as an example for the rest of the team to emulate. Get your work finished and get out. If the rest of the team isn't doing that, it'll come back to bite you in terms of long term productivity and team happiness.

[meteor]

We don't follow any norms for work timings. We are flexible.

And I wouldn't mind if he finishes his work and moves out. But, it's not happening that way. I am concerned about others in the team who might be demotivated because of this person.

[jasonkester]

Still unclear: Is the guy working 8 hour days or not?

And now extra unclarity: If you are flexible and have no expectations for how many hours comprise a day, how is it possible that one could "leave early?"

If you've handwaved like this to the employee, it shouldn't come as a surprise that his definition of "no norms, flexible" might differ to yours. Give him an expectation, and maybe he'll meet it.

[meteor]

This guy isn't working 8 hours a day and we don't expect him to work 8 hours a day.

I don't mind when person finishes his task in couple of hours and leaves the office. But, I am concerned when a person calls it a day after working for 4-5 hours without completing his task. 'Flexible timings' shouldn't translate to 'Flexible work'.

[fian]

It sounds like the issue to less to do with the hours worked and more to do with timely delivery.

Does this person know what the are expected to deliver on any given day/week/month? If not, they may think they are delivering acceptable outcomes.

Can you set clear weekly targets for this person to achieve?

[meteor]

Usually, the tasks we have takes weeks or sometimes months to achieve. I think the best approach would be to break down these tasks and track them on weekly/daily basis.

[toyg]

I would support that, but weekly only. Daily meetings are typical micromanagement and waste more time and morale than they gain.

Just have a frank chat on the lines of "dude, i hate to say this but we are not delivering. We have to change our ways a bit. Here's a list of things I need in the next two months: you have to nail one each week. I don't care which one, just give me one each week. I ask you because I trust you can do it, I think you have more potential than others. We just have to get something to show, y'know? If that doesn't happen they'll come down on me and make life hard for everyone; but if we show we're running full speed, we become heroes and will have larger buckets when money rains." For extra safety, give him a list 30% to 50% longer than necessary, and review it with him right there to let him drop a few of the scariest items and still have enough to cover the planned timestamp. He will feel a bit more involved in choosing his own destiny.

There is a chance the guy will bolt for good shortly after: this would mean he hated the place already, good riddance. If he stays on and improves his ways, the challenge is on you to keep finding realistic week-long targets, or you can relax it a bit and have two or three-weeks targets instead.

Extra-bonus: have this meeting on Tuesday morning, starting the system the following week. On monday he will hate you, from Wednesday on his morale will suffer; and it gives him enough time to clear any competing interest (either professional or private).