Here an interesting study on the effects of positive feedback:
Male and female undergraduate students performed an interesting task and received either positive or negative feedback relative to their performance.
Subjects then filled out intrinsic motivation and feelings of competence scales.
Results showed that, relative to negative feedback, positive feedback led to higher levels of intrinsic motivation and competence feelings for both males and females.
So not only did positive feedback increase feelings of competence, it also gave the subjects more intrinsic motivation.
This is crucial, because intrinsic motivation (i.e. your own desire to do something) is the only kind that reliably and sustainably makes us work towards a goal.
This is just one more reason to praise people who do good work.