As a leader you have the power to make your direct reports feel good or bad about their performance. You have the power to encourage or discourage. You have the power to motivate or demotivate. You have the power to develop them or hold them back. And the bottom line is, all this power is an awesome responsibility that you shouldn’t take lightly. So set a new goal in 2014 to bring out the best in your people. Inspire, motivate and grow them by leveraging their talents, experiences and abilities. Remember, most people want to do a good job and to be recognized for their contributions. They want to feel good about what they’re doing and want to know they’re making a difference. If you can create a culture in which all this is possible, you will reap the rewards of a better workplace, better results and a better you.

Here are three steps to bringing out the best in your people:

Challenge them. In a sense, caring for your employees is not unlike caring for children. Employees feel the most valued when they’ve been empowered to understand their strengths and talents, develop those innate and acquired abilities, and eventually excel at them. Plus, when people come to work, they are simply wired to expect and look forward to challenges. When they’re not put to the test, problems surface: Your staff members not only get bored or restless, but they eventually feel unappreciated, undervalued or simply ignored. This leads to low job satisfaction and eventually turnover. So it’s in your best interest to cultivate ways to challenge your staff members effectively, paying careful attention to the fact that people enjoy being challenged in different ways. One person might thrive on getting involved in a new group project while another might appreciate setting lofty individual performance goals or the opportunity to learn a new skill.

Recognize them. A June 2012 article in Forbes cites that “The #1 reason people leave is because of lack of recognition at work.” Someone could have the best benefits in the world, but if they’re not being effectively thanked and spotlighted for how well they’re doing, particularly for specific vs. general achievements, it’s simply not enough. That individual is at risk for giving notice. The research also shows some interesting insights on the type of recognition that’s effective today. Regular peer-to-peer recognition — specifically, a dedicated, implemented program for support — does more overall good than occasional, generic kudos from the top (although the latter helps, too). Recognition that encourages everyone to spot good deeds and appreciate success creates a culture that’s rich with oxytocin, the “love hormone.” The more of this hormone that’s flowing from one individual to the next (e.g., kind gestures and congratulatory handshakes), the more everyone feels good, connected and attached both to others and the company that’s supporting this culture.

Reward them. Money may “talk,” but there are other types of rewards that seemingly “shout” that you understand and truly value an individual. Some people really want and need extra time off. Some might jump at the opportunity to take on additional responsibilities at work — a prestigious project of some sort, for example. Meanwhile, others might relish a gift certificate for a massage, dinner out or a charitable donation in their name. Ask questions to find out who they really are and what they value in terms of reward. In addition to the recognition you provide, a customized approach to rewarding your people will go a long way in terms of reinforcing a job well done.

What have you noticed that your staff appreciates in terms of recognition or reward?