[Virax]

Let me rebut: the problem is not with existence of rewards, the problem is the size of the rewards. Employees who are merely praised for their good work are demotivated because they realize that praise is all they will likely receive in the near future - they had been hoping for a raise, the assurance of a raise, or an opportunity to advance their career.

Case in point: in the finance industry, employees work very hard and are not praised. They are also paid very well, and their pay is usually tied to their performance except in 2008 when everyone got a huge bonus in spite of the meltdown.