If it's just in terms of what you say to students, I can see that working, especially in K-12 education. I've seen some of the "grade on effort" approach in universities, though, and it produces some pretty perverse incentives. It sends the message that effort is more important than results, so students end up optimizing not for "quality of final project", but "effort the professor thinks I put into the final project".
Of course, perhaps that's good training for certain corporate jobs, where the person who stays late every day and works weekends, writing terrible code, often gets promoted ahead of the person who leaves at 5pm every day and actually does most of the work--- because the person who stays late is a "diligent worker".
In both settings, it also leads to an incentive to withhold work and parcel it out. If you did something impressive in two hours, some people might reward you for that: wow, great fix, and in only two hours? you're amazing!. But if it's more of an effort-based reward system, you're better off keeping that fix in your pocket for another week or two while you pretend to still be working on it, in order to get: wow thanks for working so hard on this for two weeks, the fix works great!.
To generalize broadly, I think startups tend to have more of the "results matter" culture, while large companies more often have an "effort matters" culture. The manager will remember the guy who spent two weeks of long nights working on a problem, while the startup will remember the guy who performed wizardry to fix some seemingly intractable problem in 45 minutes.