Managers: Stop the Shuffling and Just Fire the Person

Dear Evil HR Lady,

I recently accepted a brand new position as regional director. There was a previous director who provided management for a portion of my current region. I have now been tasked with finding a new title and job duties for the previous director. HR is really pushing for this person to retire as he has been employed for many years and one of the reasons they created the new position was to remove him from management. There was a very lucrative retirement package offered, but he declined.

I created a new position based on the organization's needs. The previous director will assume this new position including a rather large pay cut. My dilemma is that I know this person is not going to be able to meet the new job requirements (I based the job on department needs, not on the current skill level of the previous director). I have tried everything but to directly ask for retirement. Do I have any other options? I am afraid I am going to end up going down the disciplinary action road with ultimate termination since the company has a very quick disciplinary process of three strikes and you're out.

I hate being put into this position to start with but know I need to deal with it. Any suggestions would be greatly appreciated.

Managers: Stop the Shuffling and Just Fire the Person