Motivational Rewards: Good/Bad or Dependent on Context?

Hello fellow bloggers...I have a question(s) and thought(s) that I could use help on,  since my knowledge of youth motivation is "lacking" for a better word.  Sooooo I was having a discussion with my advisor about how an Chicago inner-city after-school group rewards youth for completing and posting their CT project on their website.  However, the reward is not what I consider typical, as it provides more parts to build more projects.  Herein lies the complication: the literature suggests that motivational rewards aren't "recommended," thus some frown upon this practice. (Does this maybe lead to feelings of entitlement?)

Granted my lack of knowledge in this field is a huge stumbling block to unpack this delimna...but a basic question arose: Should this blanket statement on motivational rewards cover all of the different learning environments (school, after-school, summer camp, museum) where so many different dynamics are at play?  And is the motivational reward system discussed in the literature been from only formal school environments?  And lastly can giving youth supplies (e.g. CT parts, paint, clay, fabric) to construct creative projects be equated to the aforementioned literature of undesirable motivational rewards?
 
I'm really anxious to hear everyone's thoughts! And if anyone has literature on these issues...bring it on!