What were the positive and negative effects of the encomienda system for both the Spanish and the native Amerindians?

The encomienda system (in theory) was a feudal-like system
where Spaniards would offer protection and education to the native populations in
exchange for labor and money/gifts.

In reality, the
encomienda system was a horrible abuse of power and essentially slavery.  It was
beneficial to the Spanish because they were able to extract labor at no cost.
 Additionally, it enabled the Peninsulares (European-born Spaniards) and Creoles
(American-born Spaniards) to maintain power and privileges at the top of the social
pyramid.  However, the encomienda system was not helpful to Spanish landowners who
wanted to use the encomienda system to its original purpose; it ended up favoring those
peninsulares and creoles who were skilled at enslaving and torturing native
populations.

For the native Amerindians, there were very
little positives.  Negatives include abuse, forced labor, and punishment.  In some
situations, when there was a small crop harvest, the farmers were forced to starve
themselves in order to send food to the landowners.  In addition, and this applies
moreso to Peru, native Americans were forced to work in gold and silver mines, where
conditions were so bad that most workers died. 

The
encomienda system was later reformed after men such as Bartolome de las Casas informed
the crown that if conditions continued under the encomienda system, the entire
population would be at risk and the souls of all those involved could potentially be
damned (keep in mind that colonial Spanish America was a site for Catholic
missionaries).  The new system was relabeled the repartamiento, which also had its
flaws.