Sit back and evaluate office dynamics, it is the very first step to solving your problems. Begin to keep track of things going on in the office: how coworkers interact with each other, the development of cliques, productivity, etc. Your whole company is affected by how your employees interact with each other. If there is bad blood, productivity is not at its peak. If you can trace the origins it will be easier to cease the dysfunctional behavior in the office.
Gossip, the Root of All Dysfunction
The cafeteria, near the water cooler and that tiny quite corner of the office are typical places where employees gather together for one purpose: gossip. This is also the time when people suffer the most discomfort. By trying to minimize the amount of gossip that takes place you will minimize the amount of dysfunctionality. You cannot really tell your employees where they congregate or what they can talk about. However, you can announce that office gossip is not a part of your work culture and it will not be tolerated any further. It is a fair warning to all of those who work for you. They can either stop or potentially run into trouble with the boss or ultimately lose their job.
Encourage Them to Respect Each Other
This is the most important step you can take. You need to reiterate that your employees need to respect each other with the same level of respect they would want to be given. This can push them to develop coordination among them and propel them to become highly productive.