When a kid focuses on good grades to attain some immediate reward, they have NO incentive to actually learn anything. They want to pass, to get points, to make the grade, for relatively short-term gratification. Incentivising learning in grade school or college to pay out for good grades would not help kids actually do better. It would only cause kids to scramble quickly to get the reward and do whatever it takes.
Can you point me to any references that back this up? I am interested in reading more about this.
I also think I did a poor job of explaining the idea. I wasn't suggesting you pay students for grades. I was thinking, from a student's perspective that it would be cool to trade credits you earn for an iPod at the end of the year, or something.
I wasn't aware of the psychological implications of rewarding students for doing well.