Developing a motivated and unified team is your job as a leader. One of the key ways to destroy both of those adjectives in your team is putting up with someone who is clearly, obvious to all, not doing their job. Or worse, incapable of doing it.
I was in a music rehearsal the other night, full orchestra. We were rehearsing for an upcoming pop concert with several pieces that called for a full drum set. The drummer at that evening's rehearsal was appalling. Not only could he not keep a steady beat, not only was every fill out of time and tasteless, and not only did everybody know it, but the director said nothing.
The drummer was not asked to stop playing and he was not told how incredibly terrible he was. Sure, you don't want to be unkind or disrespectful, but the situation must be addressed.
What happens when nothing is said? Every other member of the orchestra knew what was happening and immediately didn't want to be there anymore. Frustration, agitation and confusion as to why this wasn't being addressed was rampant.
That's what your team feels when you, as the leader, do not address the individual not doing their job. It kills unity, camaraderie and drive. Also, when you're in this situation, don't address the entire team telling them what they're doing wrong in hopes to reach the individual.
Address the person and the problem specifically. Do not sacrifice the morale of your team by taking the easy route. Speak to the problem quickly, and with authority. And if you're a great leader, you can do it with grace.