-Hiring Staff Members-
Proof of experience. You don't want to hire someone just because they say they have the experience and end up getting scammed in the long run. Ask if they've worked on any other sites and ask for the links to their profile. This will help you develop a sense of their personality.
Do not give ftp access right away. There is no need to give ftp access to anyone. Doing so could result in you losing your entire site. Be careful to who you give this information to. If you feel like you can trust this person with it then at least create an account with restricted access.
Offer some kind of an incentive. A lot of staff decide to stop posting for long periods of time. Offering an incentive could sway them to come around more often.
Lay down the rules beforehand. Let your potential staff members know what you like/don't like, want/don't want. Have them sign
[typing your name works as your signature on the internet] a staff agreement of some sort.That way, if it doesn't work out with certain staff members, you'll always have this to back you up.
Too much experience? Experience is a good thing but try not to hire anyone who has a huge work load. If they currently moderate 5 forums then it's probably best to look for someone else to help you out. They might not have enough time to help out as much as you'd like.
-Firing Staff Members-
Do not demote anyone publicly. This is a really bitter and unnecessary thing to do. There is no need for the demotion of someone to be made public. This could stir up problems.
Let them know why it didn't work out. Most of the time people will ask you why they have been dropped. Be specific. If they posted something inappropriate, provide a direct link to the post. If they broke a rule, direct them to the "Rules" and the thread[or where ever else rules can be broken] they broke it in.
Members don't need to know why x staff member is no longer a staff member. So don't tell them. If the ex-staff member wants to tell them then so be it, other than that just keep the explanation to a minimum. i.e.- "X didn't have time to devote to the site anymore."