It's not necessisarily a 'kite' in the strictest definition (it doesn't even involve checks.) But it is activity that has the same effect as a kite- creating an artificial balance in the account. As such, it opens the bank up to the same risks as a kite.
Regarding your first point, filing a SAR does not mean the employee must be terminated, nor does it mean that the bonding company must be notified. Doing one or both may be your best course of action in this case, it may not. Personally, I would be inclined to notify the bonding company and terminate, simply because of the loss exposure involved. I left my response open ended to emphasize that ultimately, these decisions are a matter of bank policy and the requirements of your bonding company, as opposed to regulatory requirements.
One other suggestion I can add is, if you are considering retaining this employee, place him on mandatory leave while you complete an audit/review of his area of responsiblity (whether it is a teller drawer or some back office function) and his account(s.)