I think the correct answer to this is to get on their ass about it or rat them out to their manager. In reality, what I have done is just do their work myself so it gets done.
Pretty sure this is why I failed my Amazon interview.
But there are cases where they may not. I've told my manager that they should probably have a conversation with some people, or even let them go. I don't think that's "ratting" really. Like you already said: it's you who has to pick up the slack, and a lot of the time "underperforming" also means more stress and work for me (usually in the form of cleaning up after them, fixing their bugs, etc.) With some coworkers I genuinely wished they would just stay at home. This gets even worse if the quality (and thus, revenue) of the company gets affected by their underperforming, which also affects your salary, or even the company's survival!
I also try to explicitly praise people in 1-on-1s btw.