When you praise your child for something that is not true, you don’t make him happy but ashamed. He knows that not only doesn’t deserve this compliment but you also failed to recognize anything else to appreciate about him.
While she might appear to be happy with your praise—which she thinks she is expected to—deep down she loses her confidence both in you for not being able to recognize her true value and in herself for not being worthy of real admiration.
This is also true, and even with a greater negative impact on your employees and/or people in your community. If you want to appreciate them for what they do, do your homework and get to know them and their value better, and then praise them honestly for what they really offer.
An honest commendation enhances people’s ability to offer more while a false one will confuse them.