Incentives are bad for performance
The talk “The surprising science of motivation” by Dan Pink makes a great case that incentives lead to worse performance for any moderately complicated task. Instead of this (extrinsic) motivation, Pink suggests to encourage intrinsic motivation via: autonomy, mastery (get better at what you do), purpose.
This is similar to the findings reported in the article “Praise Children for Effort, Not Intelligence, Study Says”:
“Praising children's intelligence, far from boosting their self-esteem, encourages them to embrace self-defeating behaviors such as worrying about failure and avoiding risks,” said Dr. Dweck, lead author of the study. “However, when children are taught the value of concentrating, strategizing and working hard when dealing with academic challenges, this encourages them to sustain their motivation, performance and self-esteem.”
Praise of intelligence makes talent and success seem like magic, leading to a defeatist attitude when failing. Praise of effort gives you the feeling that things are fixable.