The underlying assumption is that praise is an unmitigated good. Praise, however, has its limitations. Here are some of the dangers:
Culture and Shyness. Employees from some cultures are embarrassed by public praise. Calling them out at a staff meeting will not be welcome. You may also have extremely shy employees who would prefer a private acknowledgement of their good work.
Praise as a Put-Down. Praise must be carefully worded so it does not come across as an indirect jab at another employee. "Marie's reports are far and above the best research I've seen in years" probably won't be well received by the other researchers.
Back-Handed Compliments. Praise should be pure and unmixed. Beware of inserting qualifiers and conditions and by all means avoid inserting criticism. If you do the latter, that is the only thing that will be remembered.
Ulterior Motives. Any language that indicates an ulterior motive will completely negate the effectiveness of the praise. Beware of the timing.
Overstatement. An overdose of flowery compliments can utterly destroy a relationship. Instead of building a bond, it will damage the speaker's credibility and create a barrier.
Inflationary Praise. Start praising everything and everyone and before long your compliments will be meaningless.