This is a great topic that comes up with most owners of any business I have ever worked with. First of all we have to define what is an insubordinate employee. Let’s go all the way back to the beginning of the company procedure for hiring. You must have set standards of actual measurable production that you expect from the position you are filling. This is what you are paying the employee for and they must understand that you are giving them money and in return what you expect is a certain level of production.
The next thing is to ensure you have clear cut company policy that defines exactly what insubordination is within your group which includes the consequences for violating it. In other words, establish the rules in your group and make it known as to what the consequences are for their violation. If this is not all in writing, then factually it has no authority. It can also occur that the insubordination is the result of poor management; this is where you have to get humble and take care of it.
Last, if it is true that you have someone not following policy, creating problems for you and others and if these things way out weigh their measured performance, well it’s time to end that relationship and fill your team up with actual team members. Just make sure you are hitting the right target and are not in any way operating on rumors!