Pygmalion Effect

The Pygmalion effect, or Rosenthal effect, refers to the phenomenon in which the greater the expectation placed upon people, often children or students and employees, the better they perform. The effect is named after Pygmalion, a Cypriot sculptor in a narrative by OvidGreek mythology, who fell in love with a female statue he had carved out of ivory. in
The Pygmalion effect is a form of self-fulfilling prophecy, and, in this respect, people with poor expectations internalize their negative label, and those with positive labels succeed accordingly. Within sociology, the effect is often cited with regards to education and social class.

The Pygmalion effect can also result from racial expectations. This effect is seen during Jane Elliott's blue-eyed versus brown-eyed discrimination exercise, where third graders were divided based on eye color. One group was given preference and regarded as "superior" because of their eye color, with the other group repeatedly being considered inferior in intelligence and learning ability. On the second day of the experiment, the groups were completely reversed, with those oppressed against one day being regarded as superior the next.
Elliott gave spelling tests to both groups on each day of the experiment. The students scored very low on the day they were racially "inferior" and very high on the day they were considered racially "superior."

James Rhem, executive editor for the online National Teaching and Learning Forum, commented:
•    "When teachers expect students to do well and show intellectual growth, they do; when teachers do not have such expectations, performance and growth are not so encouraged and may in fact be discouraged in a variety of ways."
•    "How we believe the world is and what we honestly think it can become have powerful effects on how things will turn out."
In 2004, US President George W. Bush referred to "the soft bigotry of low expectations" as one of the challenges faced by disadvantaged and minority students.

Reference:
http://en.wikipedia.org/wiki/Pygmalion_effect
http://humanresources.about.com/od/managementtips/a/mgmtsecret.htm