As long as your business is still not in the 22nd century and employs actual human beings instead of robots you have to show understanding.
People do have all sorts of home situations, moods, particularities and health concerns coming as a package. Showing your empathy and understanding as it will inevitably affect their output at some point will tell your employees you are worth working for.
Motivate them through actually talking to them about the issues they face and try to find a solution to any problem. This will keep them loyal and hardworking.
