It's certainly not a cut-and-dry answer. Here are some things which I weigh and things I do/encourage in order to make sure things get done on time.
1.) Set priorities properly. Projects will always have various degrees of completion. It's not a binary "done"/"not done" switch. If the highest priority things are done first, it's easier to swallow. Ideally, you should quickly get to the point where it works, but it doesn't do everything we need it to do and it doesn't look pretty. Once there, it can be released if it absolutely needs to.
2.) I've found that the best way to handle it is to make the releases as small as possible. This makes the estimates more accurate. If your boss or "the market" dictates that your estimate is unacceptable, consider assigning more developers to this task if possible. Sometimes a task can't really be divided up easily, or there's only one person familiar with the code. If it's not a high priority just tell the powers that be that it's going to take longer. Setting reasonable goals and managing expectations is key.
3.) As for motivation, rewards, and punishment... there are many doctors who have written entire books on these subjects. In my experience, giving programmers something which is challenging and letting them have some freedom to do it their way is a good start. Listening is something managers need to do well in order to succeed. If the developer is seasoned, you should be able to just explain the problem and let the developer come up with the solution. If their solution isn't as good as what you had in mind, you can suggest it and go from there. Just dictating how to do something, even for new programmers, is seldom effective. Making the developers think about things will help them be able to solve problems on their own. This is related to delegating, as that only works if the developers can do the work on their own.
4.) Reduce turnover by paying people well if they're doing well. It usually costs much more to find good people. It takes time to get familiar with a large code base and the hiring process can also help avoid spending time on people who can't cut the mustard.
5.) Ask (don't demand) if a developer can stay late/work weekends. Only do this when it's something very critical (for example a security flaw which gives user access to data they ought not be able to access; a new law/regulation passes which you must comply; etc.). If they say no, don't hold it against them. It's likely not their fault that things didn't get done; and even if it is, it's reasonable that they made plans for time when they aren't expected to be at work. If they are willing to come in, make sure they know your sincere appreciation. Compensate them well for helping out when they aren't obligated to, buying lunch doesn't cost much and it's a very nice gesture. Don't make a habit of expecting people to work late/weekends unless it's part of their contact/agreement (or if they like doing so).
6.) Understand why things are running behind schedule. Did you promise something which wasn't possible (given the people available, quality expected and time allotted)? Did some other project come up and take up resources and the deadline wasn't adjusted? Was the code just harder to do than expected? Giving time estimates is difficult. You need to plan everything out, have experience and know how long each developer will take for the task. Compensate for unexpected problems which will likely arise and give the programmer a sooner deadline than your boss or the client. It's always OK to be done early. And if you're almost always done early or on time, that one time that you missed your deadline will be more understandable if you have an explanation of some sort.
7.) Remember, it usually boils down to time, quality and money. You can generally pick any two, but the third one will need to balance the equation. So if it needs to be done quickly and on a shoestring budget, you can expect the quality to suffer. If you need it done quickly and of high quality, expect to pay a lot of money, and so on.
8.) I'd say the #1 thing which works for me is listening. If your too busy barking orders then you might not even know about problems with the company. Now just because a developer says "the code sucks, the design is terrible and we need to re-write everything if we want to get anything done in a timely manner" doesn't mean that it'll happen. But if you hear comments like that and explain that we can't afford to do this or we'll get killed in the marketplace, it'd be way too expensive. And ask what can be done to make sure things don't get much/any worse. Ask if there's a way we can clean it up over time. Can we just (re-)write one class and build new stuff based on that? Can we slowly migrate to a new design one feature/segment/module at a time? You understand where they are coming from and vice versa, you can probably solve at least some of the issues. Just remember that compromising works both ways.
9.) Negative re-enforcement seems to result in higher turnover, which is costly. Having a bunch of people who aren't familiar with your code doesn't help deadlines either. Money is one motivator, but I've quit a higher paying job to go to one where I'm happier before, and I know I'm not alone there. Free food when the team does a good job isn't really that expensive. I'm not too keen on group activities since they're either cutting into an employees time, or taking away from work time. It works sometimes, but cutting into an employees personal time so they can hang out with co-workers instead of being with their friends isn't that great of a reward. Having everyone stop working is also expensive... so it just depends on the company size, culture, etc.
Hopefully that helps answer your question. The other answers in this thread are also good suggestions... design plays a big part in how quickly code will be written.
