Praise motivates. Praise encourages. Praise inspires.
Sometimes.
Depending on the approach you take, praising an employee can actually have the opposite effect. The difference lies in whether we assume skill is based on innate ability or on hard work and effort.
Read the full article on Inc.com:
http://www.inc.com/jeff-haden/to-build-employee-performance-dont-praise-achievement-praise-effort.html?cid=em01014week21a