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Silverdale Primary School, on Auckland's Hibiscus Coast, announced the decision to cancel its prizegiving in an October school newsletter.
Principal Cameron Lockie wrote that there were a number of reasons the school had decided that it will no longer have an end-of-year prizegiving, saying there was a counterproductive nature in rewarding children and the ranking and sorting of students as better than others.
"Children are likely to become enthusiastic, lifelong learners as a result of being provided with an engaging curriculum; a safe, caring community in which to discover and create; and a significant degree of choice about what, and how and why, they are learning," Lockie wrote.
"Rewards – like punishments – are unnecessary when these things are present, and are ultimately destructive in any case.
"There is abundant research showing that awards, rewards and other external incentives undermine intrinsic motivation. For the majority of children who don't receive awards, the prizegiving spurs boredom, anger or resentment."
Lockie said that handing out awards at the end of year prizegiving doesn't align with the school's beliefs and values.
He also said that "separating out individuals for special notice makes no sense".
"Schools are not about ranking and sorting. They are about learning and creativity in a safe and caring environment. They are about empowering all children, not just the ones that are strong at the core subjects.
"If we continuously tell our children that every single one of them is important to our school, I do not see how end-of-year prizegiving aligns with this belief. Do you?"
The announcement was said to have caused "a lot of talk" in the community, which led to Lockie clarifying his decision in a newsletter on Wednesday.
He explained that not all reward systems would be discarded, with placings still available in things like sports events, speech competitions, and team awards.
"By rewarding a few we find that it discourages the others. We are trying to get our children to succeed because they want to succeed and not because of a reward at the end which is subjective at best," he wrote.
"The sporting awards are easy to give out, if you win the cross country race you get first, not subjective. Everyone can understand this.
"Try explaining to a child that has tried hard all year with their learning that they didn't get the Commitment to Learning award because someone else was trying harder, this is subjective."
However, the decision has garnered mixed reaction from the Silverdale community.
Silverdale resident Tracey Smith questioned how students would handle progressing through to high school.
"I think many have forgotten that we live in an extremely competitive society. If we don't teach our kids to be the best they can be and learn how to fail sometimes they will be very disillusioned when they hit the real world," she said.
"I teach my kids to give 100 per cent of themselves but if they don't achieve their target that's okay. Keep going and never give up."
But Theresa Yaroshevich applauded Silverdale Primary School for their bravery.
"I have long admired the work of author Alfie Kohn, after reading his book Punished by Rewards. His conclusions are backed by research and so sensible," she said.
"The prizegiving ceremonies have always struck me as awkward and onerous to sit through. I hope [other schools] will take a similar stand and dispense with this outdated practice."
The New Zealand Herald has approached Silverdale Primary School for comment but did not receive a reply before deadline.