"First, telling someone what they should and shouldn’t do in their free time is a tremendous insult to them and their personal judgment. It’s also incredibly short-sighted."
Read that. Twice. Now, add these words of pearly wisdom to the end: "It's also none of your fucking business."
It's their time, not yours. If your employees aren't giving you 100% at work, you've every right to complain. But it's absolutely none of your business what they do outside of work.