The greatest reward of piano study is being able to play the piano. But it doesn’t hurt to have an extra reward to ensure careful and consistent practice….I currently have my school-age students set up an system where they are 
awarded for accomplishing short and long-term goals. Each week students are sent home with a practice log outlining specific daily assignments (to be signed off their parent if they are 12 and under). I check a box by the student’s name each week they accomplish their practice goals.
At the end of the month, students with all checks earn a reward. They can pick from the prize bin with candy, piano pencils and other trinkets OR choose an activity. Activities include: 1) Recording a CD, 2) Making a youtube video, 3) Spending a lesson in the keyboard lab, 4) Composing a song, 5) Playing a favorite music game, et cetera.
At the end of the trimester, students will a certain number of checks get to attend a party. During the fall we play music games and then roast s’mores. Once the weather warms up it is fun to introduce water sports!
My older students need different incentives. I like to take them out to Starbucks or Graeters after they finish a challenging piece. I also reward my older students with a popular solo sheet like a Broadway song or something off
the radio. Older students also enjoy ensemble playing. One of the BEST ways to keep an older student motivated is to schedule group classes and performances. They will work hard to play well for the approval of their peers.
At the end of each year when we have our student/parent/teacher conferences I ask the students what they consider to be a good reward for hard work. It really helps to have the student take ownership or their practice as they work towards a goal they created.
– Jennifer Stadler, NCTM Piano Teacher Oklahoma City, Oklahoma