School discipline is the foundation of education and ensures a safe and peaceful environment in which to learn and work. Establishing rules and the use of reward and sanction to enforce rules are the primary aspects of school rule formation. Incentive-based rules improve discipline better than punishment-based rules, which hurt the student-teacher relationship. Reward-based discipline also builds trust and fosters a positive environment. Research on school rules has examined the sanction and reward system, implicit or explicit designs, and rule dissemination, formulation, and enforcement. A survey of teachers and principals at 29 secondary schools in Hong Kong revealed that female teachers had a more positive perception of school-discipline climate and use of rewards than did males. Generally, girls' schools had a more positive discipline climate than boys' and coeducational schools. Less academically capable students also experienced more behavioral problems than more able students. Additional findings are as follows: School-discipline climate and teacher's attitudes toward reward and punishment are closely related; no relationship was established between school-discipline climate and the characteristics of school rules; characteristics of school rules do not affect teacher's attitudes toward reward and punishment. (Contains 22 references.) (JPT)