I agree with Jay. People who are late for class pretty much punish themselves anyway, in that they miss out on what could be an important portion of training.
However, when it comes to promotion days (especially for instructors) thats another story. Since I only do promotions twice a year, I make it a point to be there on time, or don't show at all.
I recently held a promotion where one of my guys who was ready to be promoted to Instructor level showed up about 30 mins late. As he walked in I told him to stop right there. I picked up the certificate that wouldve been presented to him, ripped it in half and told him to come back when he could show up on time. At the very next class he showed up half an hour early. I told him that, regardless of the fact that standards need to be kept, especially for Instructors, I felt very bad about what I had to do. He told me that he understood fully, and expected that to happen. He also said if I had let him slide, it would have set a bad example for the students.