Content quality is a major Google ranking factor.

Since "quality" is relative, let's go straight to the source, Google, to find out what is rewarded and what should avoided. 

Google's Webmaster Guidelines and Steps to a Google-friendly Site guide both outline exactly what it defines as quality content.

Google's best practices for adhering to it's quality guidelines are:

• Produce pages and content for your users, not solely for search engines

• Do not implement any tactics that are used to deceive users

• Do not try to trick Google with spammy SEO tactics

• Content should be unique (if not, use canonical tags)

• Avoid keyword stuffing

• Users should be able to navigate through your site with ease (especially to find content related to what they're reading)

• Keep article/blog posts centered on a single subject

• Produce articles/blog posts of a sufficient length in order to provide enough detail and information on your topic 

• Try to avoid affiliate links or distracting ads 

• Pages about finances, medical information, or legal information require higher-than-average quality

• Use more than one content format where applicable (images, videos, audio, etc)

• Monitor your site for hacking and remove hacked content ASAP

• Prevent and remove user-generated spam

Google wants you to avoid:

• Content that is automatically generated

• Link schemes

• Pages that contain minimal or no original content

• Cloaking

• Sneaky redirects

• Hidden text and links

• Doorway pages

• Scraped content

• Affiliate program participation that offer no value

• Loading pages with keywords that are irrelevant

• Malicious behavior like phishing or installing badware

• Abuse of rich snippets in markup

• Automated queries to Google

How Google Rewards & Penalizes Based on Quality

Over the last few years, Google has released algorithm updates, Panda specifically, that are designed to improve search rankings by weeding out low quality content and pushing high quality content to the top. 

Google has released 27 Panda updates so far (since 2011), with the latest one taking place in September 2014. Panda specifically targets:

• Duplicate content (any content that appears on more than one page)

• Pages stuffed with keywords

• Content that was generated automatically

• Spammy guest posts (posts that only exist to provide backlinks)

• Affiliate pages that lack substantial or useful content

• Doorway pages

• Scraped content

• Unauthoritative content (content that fails to provide sufficient general knowledge on its given topic)

For most websites, Google is the number one traffic driver. Taking a hit from a Panda update can have a major impact on ad impressions and other business goals. To learn more, check out Moz's Google Algorithm Change History.