Great question! Not a lot of people know about this but is a technique used to help motivate others, particularly employees and team members for better quality, producton, etc... It pretty much harnesses the human desire for competition and makes simple management orders into a group effort through competition. Gasification I think has been used too by companies to entice greater consumer engagement like rewarding for more purchases or checkin in at different locations of the same business...

The simple answer is Gamification is using traditional gaming psychology to motivate people in a non-game environment.

Check out www.gamification.co and www.badgeville.com/wiki for more about Gamification!

Many people may think that Gamification is a trend. Many will say it's the use of badges and points to drive engagement. Both of these are rather inaccurate.
Gamification refers to the Application of Game Design and Game Theory to processes and systems. There are a variety of Game theories and mechanics that are being uses in everything from the stock market, to bidding auctions.