naive preconceptions
"If a person is constantly late or regularly turns a 10-minute break into a 25-minute break or 'slips out for a "quick" smoke'..."
The world is a bigger place than you seem to believe. Schedules are different at different kinds of work-places.
That may be for the "IT" folks, the "house geeks", the direct tenders of robots, people at the customer service desk, and such. But software product developers are not 8-5 creatures. We may all take off together Friday afternoon for the latest SF movie premiere, but work all day and night several days a week (and typically only write down 40 hours because we know you B-school bozos won't pay us for the extra hours we work, anyway). If we're there at 07:00 or 08:00, it's often because we've been there all night. If you want us to show on time for a special meeting, let us know several days in advance so that we can make sure our transportation is in order and we can be fully alert at that time of day (just in case it's a time when we've recently been sound asleep).
I've only worked in a couple shops with fixed schedules like that and it was a bizarre experience. They were focused too much on being seen (or playing power games), and not enough on getting the job done.
"or uses crass language around clients... that is a legitimate criticism"
That's a different and more difficult matter. Some clients prefer a little crass language and others will be extremely offended at things most people would not bat an eye at. Different people consider different things "crass". (I was just reading a book in which the author pointed out that among the people with whom he works, asking who a person's father is is considered an extreme breach of etiquette and in the best of cases will only result in your naivete being roundly laughed at rather than killed, while what would be a crude sexual reference is common. In parts of the USA, asking about your close relatives is a courtesy and necessary part of first meetings; it's a way to connect and establish roles and standing.)
Figuring out the client's expectations in such things requires someone with skill and experience in measuring them. I've known a very few people who had developed that knack and were expert in smoothing over situations with just the right joke for those present and the circumstances.
No, don't cut his lunch time. S/he probably needs that time, too, if only to mentally catch up with unfinished business, but probably also to run about town on errands s/he hasn't had time to get done otherwise. Better to just pay them for the hours worked if they can't work 12-14 hours a day and make it a "no hard feelings" matter on either side. Think about whether the person is getting done what needs to get done. Then think about when you really truly neeeed for that person to actually be physically present, not just that it would be convenient if s/he were always at hand during big swaths of every day to jump at your whims.
