This is truly a sensitive subject. Yes, you can get results without having to "be a jerk". The one thing that I see all too often...no one properly communicated the expectations to the employees. You can't expect rules, processes, policies, etc. to be followed if they've not been made clear to everyone. Don't assume that everyone knows what you want.
One great thing, you didn't just take over and start to make changes. It's always best to observe, see what works and what doesn't work, then make changes.
Make sure you have made it clear what your expectations are, put them in writing, get employees to sign off that they understand what you expect and realize there will be consequences if things don't improve, set realistic time goals for turning things around. If after coaching and counseling, things don't get better...then maybe you don't have the right people.
Best of luck!
Linda
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Linda Graham Hansen
Auto Dealer Focus
www.autodealerfocus.com