What should the penalty for missing a deadline be?
Being relatively new to the software industry I have come across a question of deadline enforcement. Back in the idyllic age of academia the deadline was the end of the semester and the penalty was a well defined 'F' (or local equivalent). Out here in the real world I face the situation where deadline comes, deadline goes, and the project is still not finished. 
Now what? On one extreme we could fire everyone involved, on the other extreme we could richly reward everyone involved.  
What actions have you seen applied as 'penalty' for missed deadline, and of which actually made things 'better'?
What should the penalty for missing a deadline be?
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Being relatively new to the software industry I have come across a question of deadline enforcement. Back in the idyllic age of academia the deadline was the end of the semester and the penalty was a well defined 'F' (or local equivalent). Out here in the real world I face the situation where deadline comes, deadline goes, and the project is still not finished. 
Now what? On one extreme we could fire everyone involved, on the other extreme we could richly reward everyone involved.  
What actions have you seen applied as 'penalty' for missed deadline, and of which actually made things 'better'?