Yuck. Don't even get me started. I once had a teaching job that the school required me to do a negative system similar to this (but it was a public chart IN FRONT of the classroom with each students' behavior progress). I was so disgusted. I threatened to quit over it. I did eventually quit and made it clear to everyone how I felt about that behavior system. aeh has outlined an appropriate system but many teachers interpret such a plan to look like what the OP is describing. I would address this with the principal.
