Yeah! Stand them in the corner with a pointy hat with the word "Dunce" on it! That'll teach them!
Rewarding is far, far better.
It's not. It's just as bad, but more subtle. Read Drive by Daniel Pink, Punished By Rewards by Alfie Kohn, Why We Do What We Do by Edward Deci for more (easily understood and digested) information. Or, just start reading here: http://en.wikipedia.org/wiki/Candle_problem
In my daughter's school they offer reward cards; they're a bit like loyalty cards. Instead of the old gold stars, they are now given points that can be exchanged for material goods. A point for handing in homework, an extra point for handing it in early, points for winning competitions, be they sports or academic.
Looks like they're being taught to love bribes and extrinsic motivation, not learning. An easy mistake to make, for people who don't know how to teach, but as parents, teachers, and (ostensibly) people who can think, we owe our children better.
You are doing your daughter no favors in the long run by backing this system. In fact, you are likely to do long term damage to her love of learning for its own sake, and her intrinsic motivation. By rewarding students for doing their homework, the school is creating a system where students work hard to get the rewards, not the thing the rewards are supposed to encourage.
It's breeding short-term memory, and gamification of the system. Congratulations, you're creating an 1800s style factory employee out of a child who taught herself to walk without any sort of reward, who taught herself to talk without any bribes, and who taught herself to roll-over before you even knew she was paying attention to you.