Still, while division of labor will always be necessary for an advanced society, the question is whether or not we've explored all methods of managing it. I don't think we have. Even the worst people can be motivated by something other than threats.
Treats?

But yeah, following incentives is a good idea.
And it's my belief that every social relationship is different, and it's up to the individuals involved to figure out what works for them. Any overarching system will work for some but not others, and those others are shit out of luck.
And that's why we look for the best system that exists, not for the best system that might exist - Anselm's ontological argument is false, after all. There needs to be a framework for people to work in, and a bad framework can do far more damage than all bad individuals put together - again, Soviet Russia, Red China, etc etc. I'd even go so far as to say that every person is willing to let everything go to shit if the framework is bad enough.