Should a teacher use the carrot method or the stick method?

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I do have experience in the academe, and I found out that the carrot method (rewards) works well with my students. However, colleagues said that the stick method (demerits) is more effective with the "now' generation, as they tend to be more 'assertive' and 'stubborn' because of what the environment teaches them. i.e fight for your rights, speak up, don't be shy, you have the right to... and many more words of encouragement not to stay silent. This is good for this generation because they won't keep silent when unfairness occurs, but do they have the right judgment when judging situations in school where the teachers know all the facts involved? What's your take on this?