When an employee's performance declines, it is often most prudent to simply identify the specific performance deficiencies -- and if possible steps that can be taken to correct them -- without attempting to explain why those deficiencies exist. With the possible exception of disability cases, only the deficiencies are the employer's problem; not the reasons behind the deficiencies. It is the employee's responsibility to accept accountability for those deficiencies, and if necessary identify the reasons behind them in order to fix them.
Take the case of an aging employee. His or her performance begins to decline, yet your company has a legitimate, non-discriminatory reason for ensuring satisfactory performance in that employee's position. After all, the company depends upon that employee's satisfactory performance in order to remain viable, profitable and/or successful. If the employee can correct the identified deficiencies, everyone wins. If not, then the company, of course, is well within its rights to find someone who can satisfactorily perform the job.
Here is the wrong way to address an aging employee's performance problems:
"maybe you are just getting too old to handle the job." Or "When are you planning on retiring?"
Here is the right way to address them:
"In order to perform your job satisfactorily, the company needs for you to - [fill in the blank with tangible, legitimate work-related responsibilities which must be fulfilled, e.g., produce 25% more in sales over the next quarter; eliminate all customer complaints about your department; insure that all orders received are filled within 24 hours/one week, etc]. These deficiencies must be corrected in/by [fill in the blank - 30 days; 90 days, etc]"
If you just stick to the facts, it will go a long way to help your company avoid protracted litigation -- or worse, liability -- arising from employment discrimination claims.