What do people really work for? Oh, you may hear that it's for the money, and of course, in part, that's true. But beyond paying the bills, why do people come to work, and stay at work? I love the way Wikipedia was born, grew, and now prospers, while Microsoft's Encarta went south. Why? Intrinsic motivators are more powerful than extrinsic motivators. (in most cases).
An instrinsic motivator is one in which the individual feels good and positive about what he or she is achieving. It "means" something personal to the employee. Maybe that "something" is not the widget itself, but the way the team (or work community) interacts on a daily basis to produce the widget. People are foremost relational. It is how we are wired. Even socially isolated persons usually crave connection, maybe more so.
The point is this: improve work relationships, and you improve productivity. "Tough love" means getting the job done, holding people accountable to one another for results, but it also means providing care, support, praise, and respect. Can it be done? In healthy work environments, it is done every day.
Lesson: pick your employees not only for what they know, and what they can do, but how they interact with other people. Do they add energy or suck it out of the people around them?
Enjoy the "Inc." link for more details.