Ok this thread reminded me of what was implemented in another game (one of the all time best!) Metal Gear Online.

Now the way the penalty system worked was a three fold approach: 1. Emblems 2. a number ranking 3. a letter rating.

The emblems were probably the coolest of the penalty and award system. Say if you had a lot of head shot kills, your emblem would be a Eagle. Conversely if you died by a lot of head shots you would earn a Sloth emblem. There were many emblems in the game, and I suggest that people go look them up and come up with some of our own.

The numbers I think help see where you are to the next Letter level. But you just don't keep increasing, there are penalties for doing bad and advantages of doing good. Say if you die by a player that isnt as good as you, you lose prestige. If you kill someone better than you, you gain prestige.

There are many ways to find out the good players and the bad through stats, but to make it publicly known is either an incentive for people to do better (for those that care) or a badge of honor and also a good recruiting tool.

This way you wont really be punished but there is a social aspect that shows what type of player you are.