It's not my style or part of my character to kick people out of the guild. I find that kicking people (except for a major trouble maker) creates an uneasy atmosphere in the guild. Assholes are taken care of by the rest of the guildies and it's not long before they leave in any case.
Concerning under performers: I have a raider rank that people need to apply for on our forums. One of the conditions for raider rank is that they accept our raid rules (which isn't more than showing respect and decency towards other raiders). Another condition is a minimum stat requirement for each class/role and they're subject to a gear check on the armoury. Non-raiders are welcome to join raids if there's open spots for them, but they are subjected to the same evaluation that applies to pugs: check on the armoury and if they're in fighting fit form, they can join.
If people are not performing as well as they could in a raid, I'll have a word with them. The guildies know by now that I don't spoonfeed, but I will do some basic research for them and place links regarding their class on our forums. If it's in a raid and it needs to be addressed immediately, I'll mention it in raid chat. We have a stunning group of people who's always eager to help. If I would say "Dude, your dps is falling off the train! What's up?", I give him the oppurtunity to give his side of the story first, and most of the time the more experienced players are all happy to give advice on what issues he mentions. If he's being an ass about it and refuses to admit that his 1200dps is just not cutting it, he gets excluded from future raids until he cleans up his act or gets frustrated by lack of guild run invites and leaves the guild.
Recruiting: I don't advertise for recruiting at all. I keep an eye out for pugs that join the raid and it's the perfect place to see a player attitude. I've also adopted the philosophy to recruit people, not the character. You can upgrade your character, you can't upgrade an arsehole. Guildies also refer friends and in most cases it's a good compatibility check without even having to go through an interview.
I've said a lot (probably too much!) and it's by no means the only solution or the only correct opinion. It's just how I run things and how it works for me.