Ah motivation is always an interesting topic.
According to Douglas Brown, motivation is defined as the extent to which you make choices about the goals to pursue and the effort you will devote to the pursuit.
There are basically two different types of motivation -intrinsic and extrinstic. Instrinsic is the most powerful as it's concerned with "feelings" and as the student is more and more excited about the class they will forget about everything else. There is no apparent reward except the activity itself.
Extrinstic motivation is concerned with the reward in a physical sense (money, points, stickers, candy etc) and the activity is carried out for this reward. The students, especially younger ones, are drawn more to this as they can see the reward in front of them where as the higher self-esteem as a reward is more difficult to convey to your students.
I find with young students that a physical reward (extrinstic) is more useful as the students can actually see the candy/points and they think to themselves "if I do this correctly then I can get that." It motivates them but can have a really adverse effect on children later on as they might begin to expect "rewards" all the time for doing tasks. Over the long run they will focus too much on the rewards. And also it will cost you a pretty penny.
With older and more sensible students an extrinstic rewards system is better. They do a task and after completing the task see that they are better off with that knowledge than before the task without that knowledge. For example if they never answered a phone call in English and then you teach them some vocab. such as, "Can you hold on a minute please," "Sorry he's not here now. Can I take a message?" etc then they can see the real value of the exercise and their self esteem with be the actual reward. This is true of adults, especially company class students.
Therefore in my opinion a points based system is better for younger learners. Assign them some great prizes that will take them weeks and weeks to achieve (or months in my case) and have them to record their points on a daily basis in their notebook so you could design your own "Special Points Page" and add in the points for every correct answer they give, for singing loudly, not speaking Korean (in my case) for being nice to their friend and for playing nice during a game. It worked very well in my classes
