As an educator for 15 years and a former tutoring business owner for 8 years, I can attest to problems in reading coming from 3 causes/areas:

1.  Our brains grow at different rates.  Some children need more time, as much as a year or two to be ready to read.

2.  Some students get so consumed by their extracurricular interests, such as sports, that they have no energy left over for reading.

3.  Some students are acting out on the way the family handles crucial conversations at home. 

Parents can throw a lasso around any of these situations; they just need to have the spiritual and social support and awareness to do so.

I was fortunate that my daughters had teachers that understood the influence of social helpers #3. Both daughters classrooms had reading buddies throughout the early years.
The fourth graders who were identified as at or above grade level in reading would come down and read to the the 1st,2nd,and 3rd graders. Luckily they both got guidance from other gals who not only read well but with great expression in their voice. It was noticeable when they read to me at night.  We also had the ritual of reading a bedtime book together. The teacher sent home a list of classics for each of their grades and we read them together. Now that they are 24 and 21 we all agree the Bridges to Tarabithia was our favorite.

The ideas below are based on my experiences with my son who is about to turn six. He is in grade 1, but reads as well as the best grade 2 reader.

He has always been predisposed towards reading - for instance, he had an early interest in street signs - but gets easily frustrated when trying to read (or do anything difficult). So while he has natural talent for reading, he would much rather watch Star Wars than read a book.

I encourage him to read mainly as a way to build his independence, but below are some more specific strategies.
<br style="font-weight: bold;" /> <span style="font-weight: bold;">Personal motivation</span>

Read to them. Ten minutes every night before bed. Whenever they are tired or frazzled. Read age-appropriate kids books yourself; children will come over to find out more. Write them personal notes: compliments, messages, secrets. The story-writing example above is great. The trick with writing is to have plenty of pens and paper handy, so the minute you think to write something, the resources are immediately to hand. Kids will start writing back.

Also point out the benefits of being able to read. Kids are pretty short-term thinkers, but reading is a big step so a slightly larger goal is still effective. For my son, it helped to say, "If you practice reading now you won't have to worry about it at school next year, and you can concentrate on maths instead." (He really likes maths.)

<span style="font-weight: bold;">Personal ability</span>

I taught my child using a book called <span style="font-style: italic;">The Reading Reflex </span>(McGuinness and McGuinness). It's a well thought-out phonics system with logically gradated activities - I don't have experience with other systems, so can't offer a comparison. I simply found this book offered me a path of least resistance through the thorny parts of reading English.

I would do the activities fairly rigorously for a few weeks, and then put them aside to spend more time reading books, and then return to the activities for a few weeks. That way the child can revisit books and see how much easier they are becoming.

Encourage the child to commit to the lessons, but equally let it go if they really don't want to do it. Revisit the issue every now and then. If you're doing a lot of other things in this list, they will eventually agree to do a block of lessons.
<br style="font-weight: bold;" /> <span style="font-weight: bold;">Social motivation</span>

Select a school with a high level of literacy. We faced a choice between a school a few blocks down the road, but big, crowded and average literacy levels, vs a school that required an awkward commute, but was small with generally high literacy levels. Chose the second one, and have seen benefits.

Find opportunities to draw attention to older children with good reading ability (eg we car pool kids to school, and on certain days I have to drive a bright older kid, and we often talk about books). Don't draw attention to same-age kids with higher reading ability; it smacks too much of competition and can be demotivating. Encourage your child to read to younger children.

Recruit help of grandparents and charismatic friends. Kids like to impress worthy grownups.

<span style="font-weight: bold;">Social ability</span>

Verbalize your own struggles with reading. "What does this word mean?" Occasionally sound out words while you read. Basically, act a little more like a beginning reader. Model asking for help (eg ask your spouse for reading help). Point out other people who are experts, and speak highly of them, and do the same for people who model help-seeking behaviours.
<br style="font-weight: bold;" /> <span style="font-weight: bold;">Structural motivation</span>

Have a long range reward peppered with lots of little rewards. I used an advent calendar approach. My son was interested in getting a Wii. We made a deal, if he completed a large number of reading lessons at home before Christmas, and reached the point where he could read instructions on Wii games by himself, then we would get one. I then printed an A3 picture of a Wii and stuck it to a board. I then drew a grid of 70 squares on another A3 sheet and stuck that over the picture of the Wii.

Every time we completed a lesson, my son could cut off a square. That was usually reward enough, because it was exciting to see a new part of the controller or whatever appear each time, but I would also occasionally give him some M&Ms or suchlike, if I had them around, just a small and immediate reward.

As it happened, my son didn't complete the sheet. He stopped wanting to do lessons with one row to go. He didn't mind not reaching the end. His interest in reading ebbed away for a while, until he went back to school and he realized he was one of the best readers, and now it's back because it's become a source of pride.

<span style="font-weight: bold;">Structural ability</span>

The biggest impediment to reading is the TV, and to a lesser extent video games. We simply have a week each month where the TV goes away. The kids are quite accepting of this, and naturally turn to other interests, including books.