ok, just my opinion... i do like star charts and incentives in general for lots of things. however, as far as reading goes, if your son enjoys reading i wouldnt do it. i feel it instantly turns it into a chore by definition. my kids love to read (be read to), and i completely downplay if not outright ignore all the reading incentive stuff that comes home from school. for my kids, thankfully, reading is a reward in itself, truly. if dont read to them if they are really out of hand before bed, my oldest is devastated (and i am secretly cheering :)) that said, i will tell you that i am/was a teacher, and i used lots of incentives for reading for the kids who didnt like to read no matter how hard we tried. and if, despite everything i do, one of my kids becomes a reluctant reader, i will certainly do the same. but i can tell you i would try my hardest to not get to that point. so, my point is is that it depends on your son. if he likes reading, i would not use an incentive chart, and i would keep reading as fun and as wonderful and interesting as it can be. let him choose his books/magazines/ etc, pick things that he is interested in or curious about, be sure to include things that are funny/silly/gross/non-educational... the silly things that make a little boy laugh (im sure you know all this)..... and even more so if he is on the fence. he is just getting started, the most important thing, imo, is to keep him loving it. if he is a reluctant reader despite your best efforts, then an incentive chart might be a way to go, but i just feel 4 or 5 is sooo early to "lose" him as an excited reader. i dont know what program your son is in, but my son (only went to a little bit of prek, and is now in K) will be 6 in a few days and he is just now learning to read, he is at the very beginning, starting to realize he recognizes lots of words, sounding out, etc, the last couple of weeks, as is his whole class, for the most part... and i consider him a reader for life already because he loves it so much and i am watching him be soooo excited about learning to read, its happening very naturally, its so beautiful:)
the way you are describing your situation, i am wondering what happens when he gets stuck on a word. if it is too frustrating, maybe just give him the words, seamlessly, for a while so he doesnt get anxious about it, maybe he needs a little more time to build his confidence. if he is already reading at under 5 years old, he probably knows more than he thinks he does, maybe he just gets anxious?... keeping it light and fun is so much more important than mastering a few words or sounding-out techniques. enjoyment of reading is one of the most critical things for future sucess in school, i would do everything i could to protect it. best of luck, D.