A perfectionist on your team is both a blessing and a curse. He may have high standards, but will likely fixate on every detail of a project. Here are three ways to harness the positive qualities while mitigating the bad:

Give the right job. Don't put a perfectionist in a role that is overly complex or requires managing people. Find positions that have a relatively narrow scope.
Increase self-awareness. Help your direct report recognize when his standards have negative outcomes. Explain the impact on those around him.
Don't shy away from feedback. Perfectionists may have a hard time hearing criticism of their work. This doesn't mean you shouldn't try. Ask for the perfectionist's advice on how to best give him feedback.