Different types of leaders use different methods of motivation, to motivate the employees. The two classical motivational methods are known as the carrot and the stick. The carrot is that if you work well, you get benefits, and therefore the employees will work as hard as they can to achieve these benefits. The stick on the other hand takes advantage of the employees fear to make them work as hard as they can, so they don’t lose their jobs.
Personally I prefer using another motivations method. Instead of motivating people by giving them money or threatening to fire them, I prefer to make the work a purpose in itself. I believe that people who enjoy the work they are doing they will do it well, and be effective. To make this work there you have to hire people who are passionate about their work. This is easily seen in a job interview. Personally I would rather hire someone who is passionate about their work, than someone that has excellent credentials and is indifferent, because a person that is passionate will yearn to learn more about their field of expertise, and therefore they will improve over time. Passionate people also improved the work environment. Have you ever worked with someone that was indifferent? It is a pain! They don’t carry their share of the work, and become a burden for the rest.
To just hire people who are passionate isn’t enough. Step two is to make the work environment pleasant. There are many studies that prove that breaks, plants, good lighting and social encounters outside work actually makes people work faster. The short version is, make the office interior nice and pleasant, but not cozy, give them long enough breaks so they have time to eat, chat a bit with coworkers or just relax a couple of minutes, but not so long that they lose focus, encourage coworkers to socialize outside work hours, and last but not least as a CEO, VP or any type of leader, be accessible for questions, and be friendly, but even though your main goal is to be friendly be direct and crystal clear about what you tolerate and what you don’t tolerate.
This is just my preferred method. If you do it differently I would love to hear how you run your company!