See the chapter on Punishments and Rewards in Practical Education, by Maria and Lovell Edgeworth---a work which ought to be in the hands of every parent.
No one who takes any interest in the public welfare, can be unacquainted with the plans of education introduced by Mr. Lancaster. Among other contrivances to which his success may be attributed, his system of rewards occupies a conspicuous place. His school-room resembled a toy shop: little carriages, wooden horses, kites, balls, and drums, were suspended by ropes or hung upon the posts, and the walls were ornamented with halfpenny and penny prints. Ewery candidate for reward, thus had always before his eyes the object of his desire, and he knew the price he must pay for the possession of it. Among so large a number of boys, it has, however, been found necessary to employ severer punishments than such as consist in a mere privation of pleasure. Those selected by Mr. Lancaster depend exclusively upon the dread of shame, and have been made uniformly emblematical or characteristic. Their efficacy far exceeds that of corporal punishment, which children are apt to make it a point of honour to brave, which they habituate themselves to suffer, or which inspires them with a decided aversion for study.RR Book 1 Chapter 7