The best way to teach children to read is to teach phonemic awareness. In other words, children must understand letter sounds to be able to read. Memorizing sight words will not teach children to read.
Children must be able to decode or take a word apart, letter sound by letter sound, and then put those letter sounds back together (encode them) and say the word correctly for children to be able to read effectively. To improve their comprehension, children must also learn the meanings of words.
Children learn to read from interventions that stress intrinsic motivation. Intrinsic motivation is motivation from within. Giving children rewards and prizes is extrinsic motivation,which is much less effective. As soon as the rewards go away, the reading stops. Instead, children learn to read because they want to read and enjoy reading rather than being forced or bribed to read. Children made the pop-up village in the picture above by reading written directions. They enjoyed the project, and reading helped them to accomplish it. This is intrinsic motivation.