1. Be specific.
When giving praise, a simple "thank you" is not nearly enough. Identify the specific accomplishment you are praising and describe the impact it had on you. Try: "Thank you for staying late and making sure the presentation was error-free; it really made the difference in winning that client."
2. Praise with action, not just words.
After you've praised someone specifically, follow up with an important gesture of confidence. Let him lead the next presentation, send an email to the company acknowledging his hard work, or ask him to train others in what he did so well.
3. Don't praise as a preface to critique.
Token praise uttered before criticism sounds empty. It will only undermine the value of the praise you give in other settings.
From The Harvard Business School