I have been the administrator for three districts where teachers chose to use the Red/Green/Yellow sign for students as a visual for their students' behavior. I have seen this be an effective way to manage some students, for others, not-so-much. I have had parents communicate with me how the system demoralized their child, making it nearly impossible to get their kindergartener or first grader to come to school.
I ran across this article today that does a fabulous job of explaining the reasons why this isn't the most effective way to manage behavior in the classroom. The author, Jen Bradley, has started a Facebook page to open the discussion on better ways to track student behavior. Please read it.
Does Your Child's Teacher Use a Stoplight for Behavior