I found an interesting article about this very subject on Scholastic.com. Basically, it says rewards can backfire unless you reward effort, not just outcomes. In other words, it's OK to reward a child for working really hard to get good grades. It's not good to reward them for being smart. Effort is something kids can control. "Smarts" are something they either have or don't have. And sometimes, kids will be afraid to take on challenges, because they're afraid of failing and losing their "smart" label. And of course, real learning only occurs through challenges and expanding horizons.
The article offers several tips on how to reward effort, so that the rewards are meaningful. The author suggests 1) being spontaneous – don't promise the reward, make it an unexpected benefit. 2) praising effort, not just outcomes 3) telling kids that their brains can continue to grow, so they'll keep trying and 4) emphasizing education over grades.
Dr. Sylvia B. Rimm, director of the Family Achievement Clinic in Cleveland, Ohio, and a clinical professor of psychiatry and pediatrics at the Case Western Reserve University, suggests giving young children small rewards, such as stickers, throughout the school term as they complete assignments, or keep their work organized. At the end of the term, they can then "cash in" their daily or weekly rewards for a bigger reward, such as a toy or book. Again, the concept is rewarding effort, not just grades.
It's not that grades aren't important. As a Mom of a high-school junior, whose transcript will play a big role in determining where he'll attend college, I know that. But I do agree with the "experts" when they say rewarding hard work is likely to have the biggest long-term payoff, for both school and beyond.
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http://www.arcamax.com/parents/s-675135-597040
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