The punishment should fit the crime, and most situations are warrant only a warning or a minor punishment - and if behavior improves, all is well.

If you have that policy and then start down the road of first-offense warnings, or trying to match the punishment to the crime, you end up in exactly the place where a lot of companies are now. (This isn't a new idea; it's how companies have always operated.) Without a specific set of policies, the company literally cannot do anything right: If you fire someone because his coworkers say they cannot work with him, everyone starts frothing at the mouth. If you pay someone else to leave because he's too important to fire, everyone digs out their pitchforks and torches. If you do nothing, it blows up in your face, spectacularly.