Joseph, you wrote about how you gave him some time and then had some general conversations with him a few times and then, finally, a "Come to Jesus" meeting with expectations you clearly laid out. At which point he admitted he wasn't properly engaged. But, of course, at that point he had no choice.
In what you've written, you don't describe how you listened to him in ways he could feel really heard. There may be issues outside the business and/or inside. The only fair thing is to sit down with him and ask "What's happening for you." Are there ways we can help. And you actively listen with no expectations and especially with no desire to immediately counter his perception or feelings. You are just there for him. It seems like a waste of time because he appears to be 'the' problem, but I think you'll find it's a real gift to yourself.
I have a 2-page paper I'd be glad to send you on "Powerful Listening." I don't see how to attach it here but send me a quick email at email@example.com and I'll reply with the paper attached. There's also a paper by Carl Rogers the GrandDaddy of Active Listening. In the paper. which you can find at
he writes: "If I want to help a man reduce his defensiveness and become more adaptive, I must try to remove the threat of myself as his potential changer. As long as the atmosphere is threatening, there can be no effective communication. So I must create a climate which is neither critical, evaluative, nor moralizing. It must be an atmosphere of equality and freedom, permissiveness and understanding, acceptance and warmth. It is in this climate and this climate only that the individual feels safe enough to incorporate new experiences and new values into his concept of himself.
And forgive my effrontery, I hunch it's the same for you. It's not easy to change our ways. I wish you the best. Mike