You can be a hard and fast leader who operates in a zero defect world. If that is your style, be prepared for subordinates who do not take initiative, do not question orders that may be unclear, are unmotivated, and have little respect for you as a leader.
If you are an empathetic leader who weighs what happened against what can be learned then chances are you will be considered fair and just. This can foster initiative, pride, willingness to seek clarification, high morale, and esprit de corps.
In a nutshell it comes down to a simple leadership principle: treat others as you want to be treated. Help them learn and grow not only from their mistakes but the mistakes of others. When the unit can honestly learn from its mistakes the unit becomes more efficient and the team becomes stronger. I am not suggesting that you lower your standards or that you treat critical errors as minor events. On the contrary, I am encouraging you to deal with individuals that choose to commit unforgivable sins while ensuring the unit grows by sharing lessons learned through honest mistakes and unforgivable sins. Good performers need to see that substandard performers face significant consequences when they choose to make poor decisions and substandard performers need to see the benefits of doing what is right even when no one is looking.