Looks like a fairly junior manager screwed up at recruitment and was too wet behind the ears to use performance review and if necessary performance improvement programme to fix the problem; and maybe incompetence started at the top, since despite not picking up and correcting this she ended up promoted to somewhere where she can maybe do some more damage.

Why don't managers understand that continuous informal performance appraisal and taking whatever action that appraisal suggests is needed is an essential part of their jobs? It's even more important in companies that have a formal 6-monthly or annual performance appraisal process than in those that don't, because the formal process is generally locked into a straightjacket of excess formality and resented by everyone except the HR gurus.

However, that doesn't answer the question; what to do with Eric. I would go for a formal performance review and if that review determines it is needed then a performance improvement program; that may lead to resolution in one of several ways: it may cause Eric to perform his current job in a manner that causes less dissatisfaction and resentment amongst colleagues and managers; it may discover that the problem lies not in Eric but in the way management and colleagues treat him, so that improved management solves the problem; it may lead to identifying job changes that would improve the situation; or it may lead to firing Eric because he is not performing to the standard required.

Now I'll go and read the remaining pages of the article.