How do you deal with under performing team member?

The key is communication and the sooner the better. Talk to the employee privately and ask what you can do to help them meet the deliverable. Be honest and straight forward that you are concerned about them and the project. They may tell you they are having personal problems or they are struggling with on aspect of the task. After this conversation you will be able to make the decision on whether to continue, find technical support/coaching or consider a replacement.
Regular communication and honesty solves 90% of the issues with teams.

I agree with others in this thread, communication is key in finding the root cause.

There can be a variety of reasons why a team member is not performing well and each will have a different resolution pathway. When I notice that a key team member is not performing well, I'll pull them aside for a private, open and honest conversation.

I find it useful to discuss the team members passion for project work in the first place. If you can identify what motivates them, it then becomes easier to identify an appropriate resolution.

We need to identify the root cause for the dismal performance of the resource. It could be as simple as clarifying to the resource what exactly is required and how the resource can actually deliver it to bring the performance back on track. Or it could be something more challenging. For example, if the resource lacks the skill set or competencies required then it is evident that we cannot meet the timelines without looking for replacing the under performing resource with another much capable resource. Once a replacement is in place, we must not forget to train the under performing resource!

Hi Anish,
I think it is important to give clear feedback to the team member and listen actively in order to understand the root cause. As soon as the motivation drop is detected you should react and treat even the 'weak signals' and not wait for the situation to degenerate. And you should not do anything big in the beginning. Observe and collect data first, be factual and then act based on the gathered information. If the feedback is not enough , and there are no signs of improvement over time, you might be forced to take formal action.