Rewards are keys to motivation. This question is motivational in itself. I would suggest first to place the same question in front of the teachers and faculties. But for them the question should be only about what they feel is required to motivate the children. When individual teachers will get the opportunity to showcase their involvement and creativity through opinions, it will immediately start working as a stir in the environment.
Next, there should be some reward system for the teachers who have done their best. It could be monthly or yearly. Like the Best teacher award in every subject. A small token of gift awarded during the teacher's day celebration can do the magic very easily, without offending others.
What is really necessary to trim down the negativity and demotivating factors in the classes, is installation of CCTV cameras in the class, in strategic point that will not lose its focus on the teacher, even if they move around the class. This will automatically curb down the corporal punishment some teachers still continue to administer.
At the same time, it will make the teachers automatically alert and sincere, if these virtues do not come naturally to them.
This will also help in keeping a safety record in the institution, which is the need of this hour of violence in schools, that we get to hear every other day.
For the students, the most motivating factor will be something through which they can show their individual skills. a rotation in monitoring the class, given to each and every student, will bring a huge change among them.
Asking a pair of students to correct each other's answer sheets in the class assignments will really be fun and exciting for them.
Giving opportunity to each student to contribute ideas for the betterment of the school and taking their suggestions seriously will make them feel honored and accepted.
Focus should be given more to the weaker students without making them feel conscious about it. Giving them some special tasks or responsibility will evoke their spirit and changes can be seen quite soon.
Regular events that involves extra curricular activities will make those students motivated who do not feel motivated to study, but have special skills in vocational subjects.
Opportunity to develop vocational skills will add more scope of involvement in the institution which will keep motivating the students throughout the year.