Before you let them go, have you analysed what makes the difference between their performance being good and bad? What have you tried to motivate them? Have you asked them if there is anything that would motivate them and if there is anything that is demotivating them?
One suggestion though: Are they being given enough direction? No-one likes a micro-manager, but having a couple of clear goals for what to get out of a day does wonders for my productivity. The thing is though, I'm not great at setting that for myself. Working with someone to set that kind of daily target is great. You say you have to nudge them constantly, but I'd argue you are probably an exceptional person (e.g. starting your own company and employing 8 people.) Setting goals and direction is what you are good at. If your employees were good at it, they wouldn't be working for you, they'd be your competition!