I think most damage to kids is done by people who claim participation trophies are bullshit.
These trophies are for encouraging people to try and do something and not thinking: "I am not going to win anyway so why bother trying at all".
Kids are smart and they also know that running that 5km run and finishing first is hard work. They might not be happy about participation trophy but still they should be praised for the effort of putting on shoes and trying.
There is a lot of psychology about effects of encouraging positive behaviors that is misunderstood. Even if you have employees it is much more effective to praise them on positive behaviors than scolding them for mistakes. Because scolding for mistakes will push them into direction "I am not going to do this task at all because if I make mistake I will get scolded, so why bother doing this task at all".