Leaders who use fear to keep their followers in line will not have followers for long. Constant fear of reprisal is oppressive and will lead persons to seek alternative employment. This leads to higher turnover rates and a much less skill base in your staff.
Instead, use their mistakes as learning experiences. I like to believe that most people will strive for excellence when they know their efforts are appreciated. If you know that the person leading you is genuinely interested in your success, you will tend to try harder. When you know that you have the freedom to fail, you are more likely to think outside the box and take risks. When people take risk, they might make you company look really good if the risk pays off. If they don't take risk, your company will likely stay mediocre.
The best leaders are the ones that know how to teach, how to listen, how to encourage, how to equip their employees with the necessary tools to do their job and how to move obstacles from their employee's way.
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