If by 'better' you mean 'failsafe', then connecting all the grounds to a terminal block would be preferred. If for some reason a cable or connection would fail in a series, or daisy-chain, connection then they all go out. With a terminal block each ground would be run separately to the block. Of course, if the connection between the terminal block and encoder were to fail, then all the controls would go out as well.
Of the panels I've done, I've never felt it necessary to have a ground block and run separate grounds. I've yet to have a cable failure and I've used everything from 16ga. speaker wire to second-hand, solid core CAT5...
