I use this behavior chart in my own classroom and it works very well. I try to be very vigilant about moving students up for good behavior. But I unfortunately do have to move students down for bad behavior. You can come up with whatever works for you as far as rewarding and punishing. When other students see someone move up it makes them change their behavior in hopes they get to move up to.
This is what I do:
If a child moves all the way up to outstanding in 1 day I let them get a prize from my treasure chest that day. I also do a daily punch card for student's who don't move down that day. They eventually earn enough punches for the treasure chest. My students record their behavior each day on a chart I have made. They just color in for where they ended up that day. They really love moving up because they get to show their parents daily what great behavior they have had.