There are two loosely related questions here:
- What is done about academics who do not do any research anymore?
- What is done about academics who teach badly enough that it shows up?
I insist that I am asking what is done, in your department or institution (or in your country if it is uniform). I'll ask a separate question about what should be done. I would also like to distinguish between status (e.g. if you are talking about tenured faculty, please say so), and I am mostly but not only interested in tenured faculty.
Added: implicit in the question, as was mentioned in an answer, is the way an institution measures the research and teaching activities. Answers are welcome to describe the way these are measured to decide whether to take action, but please stick to what is actually done.
To give a little context, from 2009 there are recurring discussions about the teaching duty of academics in France, and whether it should be adapted to their achievements. I would like to have a broader view of the various answers actually given around the world to this issue.