If an employee on your payroll starts a business, they're not doing so with your best interest in mind and their work's focus will change accordingly.
Fuck. That. Shit.
Everyone is a contractor. There is no loyalty on either side of the employer-employee relationship. It is a hurtful delusion to harbor fantasies otherwise.
Judge an employee on their performance. Nothing more, nothing less.
What happens off the clock is none of your business. Literally.
Good use of someone else's life-affirming stick-figure profanity! As The Man in this case, I feel totally stuck to, dude.
I'm still waiting to read of even a single example of a full-time employee who is working on (not preparing for) a business of their own while collecting a full-time salary. If it's such an awesome thing, there must be dozens of examples to choose from, right?
Why the silence? Because that employment arrangement does not work, and any person running their own full-time business would know why.
Working as a contractor while getting your business up and running? Great! That'll work fine.
Working as a full-time employee while starting a business? Doesn't work.
If you walk the talk and start your own company, you'll understand why you wouldn't want to be paying a person out of your own pocket while they're going through that process.
The burden is on you to find evidence that an employee's work is slipping. They prima facie have zero obligation to you to justify their off-the-clock activities. Even informing you of those activities I would take as a token gesture of goodwill. In your specific case you have not given any evidence of failure to perform on this employee's part. You've projected your own insecurities onto this third party but not demonstrated any issue actually being present. If this employee's work has objectively suffered then can his ass and get on with life. If his work has not deteriorated then you've got your example right there. Sitting under your nose.
Quit worrying about what this employee can or can't do. Pay attention to what he does or doesn't do.
Sorry snowflake, the world doesn't work that way. You'd think the inability of any of you to find a single real-world example of an entrepreneur working on someone else's payroll would confirm that reality for you, but I see you choose to cling to a dream-world instead.
You're an entrepreneur or you're an employee. You cannot mix the two, and if you find the pills to start a business yourself you'll understand why.
Fuck. That. Shit.
Everyone is a contractor. There is no loyalty on either side of the employer-employee relationship. It is a hurtful delusion to harbor fantasies otherwise.
Judge an employee on their performance. Nothing more, nothing less.
What happens off the clock is none of your business. Literally.