What steps do you typically take when you notice a security team member becoming less and less engaged? How do you approach them to diagnose/address the issue?

You never know what is going on in someone's life. If a solid performer is now slipping, start a conversation with them. Find out what is happening, express your thoughts. Don't assume.
I did have a guy not perform for months on end years ago. He wasn't my direct report, but I noticed his absence over the months. Turns out he was running his own online business. He finally spoke to me about it and I told him just do it full time, that is where his heart was. He resigned that week.
On the other side, divorce, family members that are ill, financial issues, etc all come into play with workers. Each issue will require some other type of assistance.
Finally, there is the bird that just needs to be set free. They need to leave the nest and find a new place to call home.

This question got me thinking.  I'm thinking about my list of options as a manager like this:  
Is the issue primarily 1.) internal (the team member) or 2.) external.  If #1, should I use carrot, stick, compassion, grace?  And if #2, should I attempt to clear obstacles, reassign to different responsibilities, coach up, or manage out.