Intrinsic Motivation

From Lean Software Development: An Agile Toolkit by Mary Poppendieck, Tom Poppendieck:

Intrinsic motivation requires a feeling of belonging, a feeling of safety, a sense of competence, and sense of progress.

Failure is Inevitable

Failure is inevitable if you are part of something that you believe will not work.
Failure is inevitable if you are made to believe that you are not capable of doing a good job.

Don't Expect Perfection

There is a difference between setting high standards vs. requiring perfection down to the smallest detail (zero tolerance for mistakes). The former pushes people to do better. The latter kills initiative.

Encourage, don't nitpick.