If you want people to perform better, you reward them. Right? Bonuses, commissions, their own reality show. Incentivize them. That's how business works. But that's not happening here. You've got an incentive designed to sharpen thinking and accelerate creativity. And it does just the opposite. It dulls thinking and blocks creativity. Daniel Pink
Dan Pink's TED talk about intrinsic motivation is well worth watching.
Pink very much comes to the same conclusion about what motivates adult workers as Alfie Kohn observed about what motivates students in Punished by Rewards back in 1993. See: "Creating Fat Kids Who Don't Like to Read."
Here's what both Pink and Kohn both tell me as an educator. If you want permanent, long-term learning or behavioral change, you won't do it with M&Ms, a special event for doing well on a test, or even saying "good job."
In fact we've all known lots of kids who were plenty smart but just didn't give a damn about what little letters appeared on their report cards. (My children will NEVER see my old report cards!) Yet we as a profession still pretend that all kids should care about their GPAs and state test scores.
Many kids, possibly a growing percentage, will only be reached through the heart, not the head. Only when they care about the topic and understand its relevance, interest, and meaning to them or to those they care about will they engage.
It's one reason we still need libraries with books on a wide range of reading levels on a broad range of topics if we want to create readers. It's why every child should have access to the Internet with its seemingly infinite range of topical information (and librarians to help children learn to find it) if we want to create life-long learners.
Unfortunately Arne Duncan or Barrak Obama don't understand this. At all. I'm guessing they were both "good" students for whom it was all about scores and stars.
Maybe it's time for somebody who had "not working to his potential" written on her report card running education. It would be different.