Encourage self reflection
A good technique is to conduct brief (5 minutes) informal status checks with all of your team members (e.g. every couple of days or at minimum once a week) at their workstation. Encourage them to volunteer what is going right and what could be better. I learned this from another manager at a managment training course. He referred to this technique as "managing by walking about". This reduces the chance of a problem getting out of hand and improves rapport. It also allows you to be proactive in supporting your team members early before they can add stress.
Also, when performing more formal discussions, I always start with "How do you think things are going? Is there anything that you, I or both of us could do improve productivity etc.?" This allows the employee to reflect and self-critique rather than being 'told' how they are not measuring up. This reduces the perception of you 'picking' on them and since the critique is their own, they can actually embrace it. Should they only focus on the things that they are doing well, then agree where appropriate and then interject with your observations of areas that could improve. Always be prepared to suggest some ideas on HOW they can go about making the change and examples of how you would be able to measure the change.
Finally, remind and if appropriate, reinforce the change with positive comments during your frequent informal status checks.
