How can we motivate people to perform optimally?  The Dong-A has some ideas:

In the past, public education was centered on punishment. Students got punished when they were tardy, dozed off in class, failed to properly decorate classrooms, and did not wash their hands. Punishment for bad behavior and no reward for good behavior were the standard in education. Rewards, however, is now considered more effective than punishment. The research of Harvard University professor David Rand supports the idea. His team conducted a study in which poor performers got punished in a team and good performers received awards in another team. The latter showed a better performance.

The article also describes efforts by New York City mayors Bloomberg and Giuliani.  Bloomberg used rewards and punishments to no great success, while Giuliani strictly applied punishments*.

Are carrots and sticks always so useful?  Daniel Pink doesn’t think so.  In his TED talk, he showed that rewards focus a person’s attention so tightly that the creative connections and insights that come naturally to a relaxed person are ignored.  I’ve only started his book, which covers the same ground in more detail.  I did discuss his video here.

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* I think these punishments and their effectiveness were described in Freakonomics, in which the authors felt that abortions twenty years previous deserved more credit.  While I clearly have not studied the literature as the authors have, I would point out that correlation does not mean causation and the book gave competing theories- and there are many – little space for discussion.