4 Hire good people from the start. Skills are important. But if you hire the most skilled person in the world and his attitude is bad then you will demoralize the rest of your staff. A bad attitude can be hard to detect in the interview as most people can keep it together for an hour or so. If possible talk to past employers about their performance. Check their references and, most of all, follow your instinct.
Good employee morale leads to great customer service because employees will be proud to work for the company. They are more willing to help out with things outside of their job description, willing to promote the company (free advertising) with their friends and family, and are less likely to leave - which reduces turn over and training costs.