The Dir to 7z (Remove dir when done) button here looks like it will do what you want:
Buttons & Toolbars: 7z, RAR, and Zip Buttons
I think that uses the DOS version of 7z. This other thread discusses using the GUI version which will give you a nicer progress display, though there isn't a pre-made button in this thread which deletes the folders after compressing them:
Buttons & Toolbars: 7Z and Directory Opus 9
Note that there's no error checking in either case. If the 7z archive creation fails then the button will still delete the source folder, potentially leaving you without any copy of the data that was in it.