Once the valve stem assembly is removed, you'll find the old washer on the end sitting in a valve seat. It will be held in place with a screw and it will look pretty well beaten up and crushed.
Remove the old washer by removing the brass screw and by taking a screwdriver into the screw hole in the washer, just pop the old washer out.
Clean the end of the washer holder of any deposits or left over rubber so that the new washer sets cleanly into the valve seat.
Replace with the correctly sized washer. Taking the old one to the hardware store is the best way to fit a new washer.
