I just tried it and it works perfectly well for me. So it’s hard to say precisely what you’ve done wrong! I suggest you to make a complete check:
Is the constraint really set in the PENCIL and not in the HAND?
Is the name of the target object really the name of the HAND OBJECT [and not the name of the HAND MESH!]?
Did you really CREATE the constraint ipo? [CTRL CLICK, in the IPO window, in CONSTRAINT ipo type] And do you see there the colored curve with your points?
Does this curve have the same NAME [datablock name] as the constraint NAME? [to switch to the right constraint ipo, press the EDIT button of your constraint] In fact it’s possible to have a different name between the constraint and it’s ipo, but I find this really not well done in Blender [not clear at all], so it’s best not to touch as it may be source of confusion.
If yes to all that, I don’t know what could be wrong…