The inaction to address bad behavior leads to morale issues in your team. By delaying or not addressing the behaviors the leader is in fact endorsing the behavior. Employee notice what the leader does and does not do.
In his book EntreLeadership, Dave Ramsey talks about Sanctioned Incompetence. “My friend John Maxwell, a great leadership author, says, “Sanctioned incompetence demoralizes.” If you as a leader allow people to halfway do their jobs and don’t demand excellence as a prerequisite to keeping their job, you will create a culture of mediocrity. If you allow people to misbehave, underachieve, have a bad attitude, gossip, and generally avoid excellence, please don’t expect to attract and keep great talent. Please don’t expect to have an incredible culture.”*
*Dave Ramsey, EntreLeadership, Simon and Schuster (2011), p. 159