The purpose of a verbal warning or verbal counseling is to give someone another chance. Depending on the nature of what happened, this may be the best course of action. Before issuing a verbal warning or documented counseling session, be sure that you are consistent. If one employee was late to work by more than fifteen minutes three times in a one-month period and wasn't warned or counseled, then you shouldn't do it to someone else unless you formally set forth a policy to do so beginning on a specified date.
When someone is given a verbal warning, the meaning is that further occurrences may result in employment termination. This doesn't necessarily mean that if it happens one more time the employment will end, but it can, depending on the seriousness of the incident and what you state in the warning. Again, consistency is the key. If another employee was released from employment after the second time he refused to perform a reasonable request by management, then this should be the result next time, too. Otherwise, you set yourself up for a wrongful-termination lawsuit from the first employee. People talk and coworkers often stay in touch with each other after someone leaves. Don't think that the employee who lost his job won't find out that someone else did the same thing and remained employed.
A verbal warning is usually documented in the personnel file in the form of a memo. The manager who issues it signs or initials the document and gives a copy to the employee. Set a policy of how long a verbal warning is active and if it can ever be removed from the file.
You can release someone from employment without giving a warning. There is no rule that you have to give a second or third chance, but doing so will help keep your wrongful termination claims at a minimum or nonexistent. It will help reduce the number of unemployment insurance claims, too. Remember, your goal is to help people succeed in their position. It's a good idea to give them the opportunity to improve and remain employed unless they've done something serious, like steal company property or assault another person.
To show the seriousness of a warning or counseling, include language in the documentation that makes it clear that further instances may result in additional discipline up to and including employment termination. This will also back up the company if a decision is made to end the employment because the employee was given a warning of the possible consequence. If he chooses not to improve, he is the only one responsible for the outcome.