Look at the job from your employee's perspective. Spend a day doing something similar to his job. Do this even it means simply walking through the paces after observing him from a distance for a full day. Make sure he does not feel watched or observed, or he may freak out, thinking that he is being watched for some dark suspicion. You want to keep this part on the low-key, subtle side.
Have a motivational meeting. While this should not be the focus of the meeting, you should ask employees what sort of things they would like to have as a reward or bonus. Do this as an afterthought, but listen carefully to the feedback that you receive from the employees. This is crucial information about what could definitely motivate your employees.
Praise in public. Someone is highly likely to repeat a good deed if he is generously rewarded for his efforts. People who are sensitive enough to be doing the good deeds and good work is likely to be sensitive enough to continue doing so once receiving praise. Next time, he may even shoot higher in order to both do a good job and leave a great impression with you. Praise can do wonders, and it is underestimated since a lot of people poke fun at those who do as "kissing up."
Hold performance contests. Offer a cash bonus, tickets to a universally revered concert or theme park passes. Choose something that is desirable for your employees. Have a first, second and third prize ready. You can also include a runner up prize as something a bit less important. The key thing here is to get everybody motivated for a fun extra reason, and it will wind up having a great boost for the morale of the office as well.
Create a non-performance based contest. This can get really fun as it allows the employee to "let his hair down." Nobody is going to be breathing down his neck or judging him in this contest. It's simply for fun. It will motivate your employees by allowing them to relax about the pressures. Once the distraction is over, it is easier than ever to re-focus now that there is something positive to think about in the immediate future that is semi-work related. It's easy to keep the eye on the prize if you decorate a bulletin board or highly trafficked employee area with reminders and offers for the contest.
Give an unexpected bonus to an employee who has done an exceptionally wonderful job or to an employee who is always early. These little gifts of appreciation tend to motivate others to rise the occasion, and the one who was rewarded tends to be an even more model employee after he realizes that his efforts are truly noticed and appreciated.
Be real. Your employees know where you stand above them financially, and each employee knows that you could send his individual world into turmoil if you decided to fire him. You probably make your employees a bit nervous when you are around, even if you are always kind. Don't try to pretend that the distance between you isn't there, but be frank and open with each employee about your expectations.
Assure your employees of job security. It's hard to do a great job when you fear daily for your job. Yet, make sure you know that work is reviewed and noticed. Lack of effort on the job can be met with demotion, and a great job can be met with a promotion. That is the plain and simple politics of the work force that keep great workers on the rise.