I agree that students shouldn't need to be rewarded, but with the way our society is set up it seems to be true. I will say that some students are intrinsically motivated; however, not all of them are. Just like some students are visual learners and others are kinesthetic. It is my job to try to connect with them all.
For more on theories on motivation check out Daniel Pink's books, his recent Oprah interviews, or his TED Talk online.
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