Should parents punish their children for bad grades?

Parents can discipline a child that has bad grades after reasonable expectations have been set. Each child is different, so every punishment should be tailored to that child. The end goal is not to punish the child but to encourage a behavior change that leads to the desired outcome.

Should I reward for grades?

External rewards for grades (i.e., if you get this grade, I'll give you "x" dollars) typically doesn't work as most students will lose momentum fairly quickly for a reward that requires such long-term focus. Having your child build an intrinsic motivation tends to be the better long-term strategy.