Yes, praising people when they've done well is very valuable. Tootler is spot on here; it's dishonest to praise people when they haven't done well.

It's also helpful to create a friendly, relaxed atmosphere so that the nervous feel the listeners are on their side. Throats tense, fingers sweat and breathing gets out of control when people are apprehensive and they don't do as well as they might.

A chilly, critical atmosphere is not at all helpful or pleasant to spend an evening in. Downright direct rudeness to any performer, good or bad, is inexcusable. You can be as scathingly witty as you like about someone's abilities out of their hearing, but doing it to their face will not help them improve - it will either hurt them badly and put them off altogether, or it will fill them with justifiable anger at your rudeness, but it won't encourage them to get better.

Valmai (Lewes)