If you have an NCO who clearly demonstrates incompetence as a leader, what are some tools and ways to relieve this NCO?

Counseling is easily the first and foremost thing that must be done! Remember that the counseling must be specific. Don't say 'you are a poor leader with no potential'. Instead, say 'on 8 May, you failed to ensure your Soldier's equipment was ready for Command Inspection'

Also, give them a plan of action. You cannot just tell someone that they suck and must fix themselves. You have to give them guidance on how to improve and then follow up to see that they performed the tasks you assigned.

If this all fails, then it is time to start looking at relief for cause or maybe even a reduction board.

BLUF: good thorough counseling is the key to quality control for ALL Soldiers.

I would like to combine the suggestions of MSG Stewart with that of MSG Quick. As MSG Stewart said we have a duty to develop leaders and guide them. I know it can be frustrating at times but that's what we do. The BAR to re enlist can be used as a very inspirational tool for someone to fix themselves, and is generally a quick fix. However, again, it has to be used properly, and the NCO needs to understand the bar completely. That will also require a formal counseling and breaking it down to them "barney style" if need be.

***EDIT*** Just wanted to add that one can overcome a bar to re enlist. Once it has been put in place, it can be removed later, if satisfactory performance/improvement has been met.

I will say ditto to all of the counseling advice and one more thing: deadlines. Ask for a specific performance objective (a training plan, or other basic MOS/NCO product) and set a deadline. Counsel again when he/she either requests an extension or blows the deadline (typically, I make them request the extension in writing and then I attach it to the counseling). Counsel again if the deadline is missed again or if the product is substandard (and attach the actual product).

If you are right, the Soldier will hang him/herself. If they have any desire for self-preservation, they will step up. Do not hide your motives; yes, I am building a packet. It's up to the Soldier to decide if I can. If I counsel and they give me the performance objective, on time, and it's excellent, what can I do? If s/he's as bad as you say, that won't happen.