I don't think this is about introducing children to the "harshness of the world". Rather, it is about helping them form realistic reward reactions - or, more accurately, avoiding accidentally helping them form inaccurate (to society) reward schema. So long as what is used builds their motivation (immediately and in the long term), it is good for them. We just want to avoid causing them problems with well-intended actions.There is no reason why such young children should put maximum effort into anything, they are young children still learning about the world, still learning how to react 'properly', and frankly they should be enjoying themselves not setting out to please adults, even education should be enjoyable. The idea that children should be introduced to the harshness of the world immediately is sad, far too many already know how hard the world can be as it is.
I haven't heard of these participation awards being given out beyond the first couple of years in school either, they start school most often in the September of the year they are five here so the first couple of years are spent fitting themselves into the school day which usually starts at nine and goes on until half three, lunch is at school. This is a huge learning curve for such young children so if you add a competitive sports day where they are expected to strive for medals it's plainly ridiculous. I'm sure some helicopter parents would love it to be competitive for boasting points but the truth is giving the children participation awards is the correct thing because they are learning to participate, learning how to function in the wider world and their place in it. If there are school sports days afterwards, by no means certain as the testing the government wants now precludes many activities they children used to do, they certainly have a winner and runners up but as my points earlier they actually mean little because of the randomness of genes and talent!
Many here wouldn't teach children aged 5-7 martial arts so why expect them to be able to do 'proper' athletics? Participation is the precursor to much, let the children find out what they enjoy doing, what they are good at, give them a wide range of activities to try before making it serious enough to have winners and losers. Every child is good at something, it just needs the patience to find out what it is.
ADMINISTRATORS: If this is seen as a political area, please let me know. I see this as discussing child development (an area of psychology), which has relevance to instructors who teach kids.