In some cases the employee doesn't really care and the process moves to the next level, which inexorably leads to the level after that and a firing....
Oh wow, do I ever remember a situation like that. My boss and I had a "hmm, he just doesn't really care" experience once, with someone who reported to me at one of the corporations I worked at for awhile. The company was an entertainment producer and content provider, but we worked in one of the infotech groups that supported various of the company's endeavors.
So this guy, I'll call him Joe, was hired as a computer programmer but he was also a talented visual artist and really wanted to work in costume or set design. He was interested in making a career switch within the firm if possible, but he was also not averse to just networking with people in our company when he could make time --lunch hours, after work, etc.-- and getting more of a feel for his desired future specialization.
Right, so when my boss had hired him, he'd been very upfront about what his real interest in our company was, but he had good qualifications and references as a computer programmer and knew quite a bit about the business of entertainment contracts so he seemed like a good fit. At first, he was. But over time his work started to become sloppy around the edges, and then sometimes he missed promised or mandatory deadlines... so I had to start down that road of verbal inquiry, verbal warning, emailed reminders about upcoming schedules and requests for response on commitment to them etc.
But as you said: sometimes the employee doesn't really care... and Joe had managed to make some pretty good contacts in his "dream career" field, hanging out around town on his free time with people in our company who were into his desired fields of endeavor, meeting their friends and peers in other companies, etc.
So after a couple years of his having done stuff like sketching costume ideas on the back of a placemat at a restaurant... offering suggestions and brainstorming with pals on their actual job assignments, Joe had sparked some interest in his work at design groups of a number of those other companies and really he didn't look to give a damn any more whether he lingered in our IT group and continued to build those new-career oriented relationships elsewhere, or whether we fired him for more or less "quitting without actually leaving us" LOL.
We did end up putting him on written warning, finally. So that was a formal sort of change of status. A bit later on, informally but on a related note, and after telling my boss I was going to do it, I suggested he spend the following week "on the clock" as far as pay was concerned, but in fact getting real and letting his contacts elsewhere know he'd decided to do his career switch and so to make their best offer. I also said that he might not need a reference for infotech from us considering he was heading to a place where people knew him as a sets and costumes guy for a couple years already, but that it was probably better not to get fired in case he needed to fall back on infotech in future sometime.
He was cool with that. He gave notice a few weeks later and the parting was amicable. Sometimes ya gotta help a nestling fledge out.. but it was a trying experience there for awhile because we really didn't want to end up with some kind of lawsuit on our hand and yet he was on the verge of causing both my boss and me some performance issues of our own, thanks to his messing up and missing project deadlines.
So everything has consequences... we had enabled Joe too long, and then had trouble getting ourselves out of the corner we'd put ourselves in. It's nice there was a happy ending. My boss later saidi she'd still hire someone like Joe again. He was entirely up front about "why do you especially want to join our firm?" and he was not a liar about the qualifications he did have to do the job she was offering. He was simply much more suited to what had started out for him as just an avocation, a spare time pursuit, something spun off his minor studies in theatre-related art and design while he was at university. I think it's so great that he managed to land a paying job in his true calling, and kind of cool that a big corporation did a few winks and nods to help get him there.