Stop praising mediocre work!

Each time you praise people for doing "just enough" - you are lowering the standards. You are telling everyone around you that you expect them to be ordinary. Anything beyond ordinary is not expected. If you use the same "well done" for exceptional and ordinary performance alike, you are sending a message that:
  • you can't differentiate between good and ordinary work ... and/or
  • you don't care about good work
Either way people will gradually stop to putting in extra effort. If you don't like some one's performance and you don't want to trouble the waters - don't say anything or find a better way to communicate the truth.