reward system based on 'real world' -- kids earn chips for good behaviors and chores, then turn them in for things they want. they also lose chips for behaviors that aren't acceptable. (this is the chart I created for my little nanny-kids)
Simple discipline technique - being positive! I used to give time-out after time-out and this is more effective for my 6-year-old. I count 1-2-3 before moving his name down to give him a chance to correct. And an end-of-day reward is great incentive to stay in the 'Happy zone'.