Behavior charts are not a bad thing, when done appropriately, though, unfortunately, suevv's child is not alone in having experienced inappropriate use.
1. You need to know the target behavior and its function, which includes the ABC's of the target behavior: behavior, antecedent, (natural & artificial) consequences. Then design a reinforcement system that addresses those needs/functions with replacement behaviors.
2. You need to have a child who is motivated by charts. Not every child is. Some are much more deeply motivated by relationships.
3. You need to have teachers & staff who implement the system consistently, calmly, and respectfully, as a support, and not a punishment.
My experience with the other students, btw, is that the perception of most of them is not really changed by the presence or absence of the chart/reward system. Everyone knows who "those" children are anyway. How the teacher manages their behavior (including charts and other interventions) will not affect identification as such, but it can profoundly affect how peers view children outside the norm, and especially whether they rally around the child, to support and encourage them, or ostracize them as being "bad". Most of this flows down from how the teacher views the student, irrespective of charts and behavior plans.
suevv's anecdote illustrates this last point rather well.
