I know you are asking, "Well, how are children suppose to learn what to do and what not to do if we don't punish them when they do the wrong thing?" To that I say, "Children will learn what to do and what not to do by your example and by consequences.
Defining punishment and consequence is important here. Dictionary.com defines the words as follows:
Punishment: a penalty inflicted for an offense, fault, etc.
Consequence: the effect, result or outcome of something occurring earlier.
When I worked as a family therapy intern, I would encourage parents to stop punishing (and rewarding!) their children and start letting consequences teach their children what to do and what not to do. It's a tough paradigm shift, however, in a society where we as parents feel that if we don't make our children feel badly when they misbehave that we will raise criminals. I get that. It was a tough shift for me to make, too, and I even now, I flirt with the idea of punishment from time to time in order to punctuate my point when dealing with misbehavior.
Usually the question I get when discussing "no punishment" is "What on earth do we do instead?" I'm glad you asked!
Here are my no-punishment parenting tips:
1. Utilize consequences.
Let logical and natural consequences teach your children. Understand that no-punishment parenting is not permissive parenting. Permissive parenting is as dangerous to the emotional health of your child as overly-strict parenting.
Make rules and enforce them. The key here is to have consequences set up ahead of time and to be consistent. What things do your children currently face punishment for most often? Do these things already have natural consequences attached? If so, then there is no need to heap punishment on top of that. If not, then think of a logical consequence that fits.
2. Seek to understand behaviors.
Children who feel well, behave well. If your child is misbehaving there is usually a reason. Sometimes that reason is nothing more than boredom. A bored child who has chosen to entertain himself by picking on a sibling doesn't need to be grounded. He needs more things to do. I'm sure you can think of a chore that would keep him busy! That's a logical consequence.
A child who misbehaves in school might have underlying issues that need to be addressed by a medical or mental health professional.
A disrespectful child needs to be given a script of the right words to say instead and not merely grounded or lectured.
3. Teach your child how to make amends.
Children should not be allowed to misbehave or hurt others. It is important that your child make amends to those he hurts with his misbehavior. Did she speak rudely to you? Then she needs to give an apology. This can be verbal or written--which ever way your child is the most comfortable expressing herself sincerely. Did he break something that belongs to someone else? He needs to replace the item or pay for it.
At first, simply making amends may not feel like enough. You expect that your child will make amends and face a punishment, right? The truth is that the punishment goes beyond what is necessary to teach your child and adds nothing of value to the situation.
This is a short post with broad examples. I'd really like your questions about more specific scenarios. If you have a situation for which you cannot think of an appropriate reaction without using punishment, describe it for me. I'll tell you how I would handle the situation without using punishment.