Joel has written about the Identity Management Method that, in short, leverages people's innate desires to do well. having spent yonks in both the Command and Control and Econ 101 management styles, i've discovered, after reading Joel's post, that i am now happily plopped into the superior Identity method. my managers coach me on goals and expect me to make the right decision.
i find that this method fits an agile organization much better. a militaristic approach stifles creativity and introduces more opportunities for error by favoring the vision of a single person. offering misplaced incentives is plain idiocy. it never fails to create negative unintended consequences.
my favorite Econ 101 failure was with my last company. we were gathered together in a common area and told to work longer hours to earn more money for the bossman, in those very terms, with no incentive to produce higher quality software. as reward, we might get extra vacation time. the catch: all vacations were canceled for the foreseeable future, making any extra time off moot.
the common theme i've found among all the bad managers i've encountered can be summed up in a single catch phrase: "work harder, not smarter."
so, if you want your resources to do better work for you, considered thinking of them as people and harnessing their discontent in a positive manner. when a team member grumbles, listen. it's usually something you did.