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what does "That's more like it! " mean? please
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You can say that when you want to encourage someone, that his/her work is better, or that his/her behaviour is starting to correspond to what you're expecting of him/her.
It expresses some satisfaction from you, you could also say "it's better".
Comments  
I liked Pieanne's explanation of the meaning of the expression, "That's more like it."

If my grandson is drawing on the walls with crayons I might give him paper and persuade him to 'color on the paper instead.' Assuming he began to scribble on the paper I might say to him, "Now that's more like it."

In a sense I think the phrase can imply a bit of approval or endorsement or relief -- or a suggestion that someone is doing something 'better' than they had done/said it before.

For example, is someone lies to you, and you inspire them to tell you the truth, you might say to them, "That's more like it," meaning "What you just said is closer to the truth, thank you."

Or, you might see old, nasty produce in the grocery store and ask an employee to bring you some fresh, crisp apples explaining that the ones on the stands are not fresh and unacceptable. When the employee brings you some fresh, appealing apples you might say, "Hey thanks - that's more like it!"