In every classroom I've been in, whether teaching or observing, the teachers use some sort of incentive to motivate their students. I've seen sticker charts, marbles, grab bags, prizes...etc... In my computer class I use a prize bin filled with erasers. I would have preferred to get erasers shaped like dogs, paw prints and bones, but instead I felt that I needed to stick with the technology concept and got little computer mice, keyboards and the new obsession at my school, "Angry Birds". Nevertheless, the container is covered in paw prints and is from Petco. (I assume it is supposed to be used for dog treats).
Anyways, having a prize box is easier when you have to teach every grade (along with a check off sheet to make sure every student gets a prize eventually), but I would say that using marbles or a sticker chart is a much better method for the younger grades (when you are only teaching one).
Unique Teaching Resources has some great puppy themed sticker charts that are available to purchase. They also have templates available for punctuation bulletin boards and book reports.
The book report packet even comes with a grading rubric, "puppy themed" of course!