This question is a typical example of competency-based interviewing (CBI) in practice. It is the most popular interview approach, based on the premise that future performance can be predicted by past behaviour.
The best way to prepare for CBI questions is to revisit the job description and person specification before your interview. You should then ensure that you have covered all bases and can comfortably provide examples for each competency. You must also be able to describe the particular scenario, the actions you took and the impact it had on the business.
Approach this particular question by outlining the processes you followed to investigate and resolve this issue. It is also important to explain the outcome. For example, you may have set an agenda of required actions following on from the meeting you held with the particular team member – can you describe what that was? If you created a performance plan that included clear training and development objectives make sure you say so.
Always finish by explaining how the action you took impacted the business. For example, the team member started to meet all targets and bring in more revenue.