Positive reinforcement can accomplish ten times more than voicing threats.
Every person who works knows they can be terminated. However, if you give your people positive reinforcement, they will usually try harder.
Firing people is the side effect, not the objective. I am currently working as a 'coach' on my job, training the new people. I firmly believe, from five trips to LMET school in the military, that one must use every single method available to get workers to be more efficient and turn them into a profitable member of the team.
And don't be afraid to make a decision. It is needed.