The usual "reward-punishment" model is great short term, but long term, the drive, creativity, and satisfaction ebb. For example, Wikipedia was and is created by persons deriving intrinsic rewards (and no extrinsic pay-offs) yet they beat out Microsoft Encarta which paid its workers for years until folding.
Point: Productivity, especially the type that is creative and problem solving focused, is higher where intrinsic pay-offs are present, such as the pay-off of working at home in a semi-autonomous manner that allows for a more balanced life.
"If the pink slip doesn't fit,
get redressed!"