Employers often over-emphasize incentives and under-emphasize recognition. Which can be a problem because, as you stated, not only can employees come to expect a reward every time, but incentives can discourage creativity and innovation since incentives provide pre-determined outcomes (if you do this, you get this).

However, recognizing employees, or noticing and showing appreciation for the efforts and results of employees, is more effective. When it comes down to it, the benefit of recognition is having employees feel valued for their efforts, not about the stuff they receive.