If you want to run a company well, you should remember that there are four general policies to follow with employees.
First, pay them what they are worth. When people begin with your company, they are rarely worth what they are paid, because you are investing in their future productivity. You should pay people low at the start, with higher payments once they are established and productive. And be open about the monetary value of the additional perks they get.
Second, you should make employees feel important. Build them positively and openly when praise is deserved. Temper this with negative motivation, pointing out where minor shortcomings are diluting the success that could be enjoyed. Avoid complacency by keeping employees slightly off-balance.
Third, make employees think for themselves. Sometimes by being nonspecific, you create the environment where employees adapt other ideas and learn how to apply them in the new situation.
Fourth, separate office life from social life. It is impossible to let your hair down with someone one night, and come down hard on them the next day.
You should also remember that if you have to fire employees, take a creative approach. Try to find a job for them somewhere else, and let the other company steal them away. However, if extreme action is called for, act decisively while respecting the feelings of the employee.
Never expect from your employees anything that you are not willing to do yourself. It's more than a clich—it is sound business practice.