Managing a martyr employee

I posted in r/askmanagement, but I'd love to get some input here as well. If this isn't the place please let me know and I'll remove.

Two years ago my family purchased a well established dry cleaning business. None of us had any experience in this field whatsoever. Lucky for us, we've had many of the employees stay with us when we took over and they have been key in teaching us a lot.

One particular employee was hired on about six months after we took over. She has over twenty years of experience in this industry. At first, she taught us quite a bit and brought in outside ideas that helped us learn to grow. She is the only employee who is willing to cover other shifts on a consistent basis and really gives her work her all. Customers LOVE her and she knows everything about our system.

Now, however, she is becoming more of a burden and has a major martyr personality.

She will say this herself; she does not do well with authority. She's developed a big head from having us listen to her. She is constantly telling other employees that she's the only one who does the job right and that they need to leave the work for her. This has made other employees complacent (why bother working hard when someone else will do it?) and has also allowed her to pad her hours and sneak in overtime. When she volunteers to work extra, she complains about it and has even made off handed comments about suing us (she has nothing to sue us for, but still…). She is a very smart and manipulative person, and it's very evident that her behavior has become a cancer on our business.

What do I do here? I've tried discussing these issues with her but my gentle way hasn't worked. I want to appreciate the fact that she works so hard for us, but I just can not allow this behavior to continue. Unfortunately, she has a very explosive personality and I just know that disciplining her or firing her would cause her to do something rash (turning employees or customers against us or even going so far as to hurt herself or someone else). Is there a way to build up the good qualities while squashing those that are detrimental to our business?

Any advice would be greatly appreciated!


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