If you choose to format the hard drive, choose the "zero all data" option to ensure all data is securely erased.
I recommend selling the Performa 6116 on eBay. You should also refer to it as a "Power Macintosh 6100" because that is the same thing (mention both names). Allow us to help you get the right info for it so you can sell it properly. You might not make a whole lot with this specific model, but at least the Mac will have another chance at life this way. Supply on eBay is low right now so demand is quite high for old Macs. This is why people get so much money for old Macs on eBay.
I recommend that you download a boot disk image, transfer it to the 6116 on a PC floppy, then have the 6116 make the boot disk out of it for you. Then reboot from the disk (simply have it in the drive and it will boot form it), then use Drive Setup to format the hard drive and zero all data. This will completely clean out the hard drive.
As Bunsen said, you can also bring it to a demagnetizer, that should do just fine. I'm not sure if this will ruin the drive, though.