I hired 4 freelancers to make a custom Gantt chart for $50 each because of a tight deadline and I didn't want to waste time if I found out I hired the wrong person.
The task requires complicated scripts and formulas.
2 of the freelancers did work for less money but I can't use their Gantt charts because if you are not very careful the formulas break and errors occur, for example if you delete a cell with a formula accidently.
I paid them and rated them 4 stars anyway.
The 3rd freelancer had 3 days to complete task, it has been 5 days and he likely won't be finished for another week. He has done a lot of work so far but the Gantt chart has the same problems as the others and I doubt his skills.
The fourth freelancer is an incredibly skilled superhuman genius that far exceeded my expectations in quality of work. He has finished but is now doing extra work to make it even better. I will give him a $200 bonus.
What should I do with the 3rd freelancer?
Is it a fixed-price contract? If so, just cancel the contract with him and move on. There's no sense in paying for something that he has yet to deliver, especially if it's past the agreed-upon deadline. You hired him to do a job in a certain timeframe, and he wasn't able to meet that. It's not your fault. It may not even be his (things could have come up, or he could just have gotten in over his head). But business is business.
If you're feeling generous, you could release part of the escrow so he at least has something to show for the time spent, if payment was contingent upon completion by the deadline, you're by no means obligated to.
Don't just hand out 4-star ratings to be nice, either. Rate them truthfully on each category, and then explain the details in your feedback.
The FASTEST and most expedient action would be to release full payment to the third freelancer, close, the contract, and message him: "Thank you for your work on this. The project is done now. Between what you did and what the other team members did, I now have everything I need."
There is no way for him to argue or dispute full payment, so that eliminates any possible hassle. That is typically what I do.
A slightly more time-consuming path involves you sending him a message pointing out that the deadline has passed and you can't use his work, asking him if he would be willing to provide a full refund, or accept partial payment. The choice is yours.
I suggest doing whatever is best for you and your business, and not worrying about the freelancer's karma. Don't feel guilty about releasing full payment or providing expedient ratings.
Both Michael and Preston have provided answers that work. By providing four-star feedback to a freelancer who failed, you are doing nobody any good. Many clients make decisions based primarily on feedback; I only look for consistent comments, good or bad, seeking patterns of success or failure.
To my mind, the three first freelancers have worked for you, and from an ethical point of view, they deserve to be paid for their work.
Besides, they've helped you learn a few things about hiring on Upwork:
1/ You've made a very common mistake by hiring the 2 first freelancer hoping to get quality for cheap. As a rule, quality is not cheap.
2/ The third freelancer is not as good as the fourth one, but he's trying hard to deliver what you need. Maybe next time you hire, you'll be a little more careful checking the past record of the freelancer you're hiring. You can get a lot of information by taking the time to read profiles and feedback.