Grounding children is a more involved punishment than simple time-outs but the two are rooted in the same principle, namely to use social isolation as an aversive consequence for bad behavior. Where time-outs typically involve very temporary periods of isolation, instances of grounding are usually set up to isolate children from participating in some desirable social group or activity for days, a week or longer.
It is not useful to ground young children as they do not have the attention span to appreciate what is happening to them. They are not easily able to connect the dots and understand how their prolonged isolation is related to their prior behavior. However, by middle-childhood, kids have developed the mental maturity to make the connections necessary in order for grounding to work.
Because grounding involves a prolonged isolation, it should be used very sparingly, and then only in sensible proportion to the magnitude of misbehavior. If 11-year-old Cara's grades dropped because she's been spending more time on the computer messaging friends and playing games than doing homework, "grounding" her by removing her access to the computer for two weeks and then following up with teachers to see if she's started turning in her assignments is arguably an appropriate and fitting consequence. However, grounding Cara from the computer, television, playing with friends, and talking on the phone for the entire grading period would be too extreme and out of proportion to what Cara did. Cara will not perceive this exaggerated punishment as being fair, and it will likely end up not being very effective as a way to teach her to behave better. Extreme or exagerated negative consequences tend to leave children feeling hopeless, angry or at least less motivated to act quickly to change their behavior, as the goal is so far away. The use of extreme punishments is also a bad policy from the parents point of view, as it uses up all of their punishing power at once. If children again misbehave after experiencing this sort of worst case scenario, parents find themselves either out of options or pushed towards ever more extreme and abusive punishments which also are unlikely to get results and likely to cause children to be fearful of or angry at their parents.
Whereas time-outs and groundings motivate children's compliance with rules by offering them aversive consequences for misbehavior, sticker charts and like-minded discipline techniques are examples of positive disciple which reward children for compliance with the rules. In the case of sticker charts, the idea is that children are rewarded with stickers when they follow the rules. When they don't follow the rules, they get no stickers.
Sticker charts are an instance of what is known as a "token economy". Token economies are effective and useful ways to mange the behavior of younger and older children alike, Even adults will respond if such economies have been set up properly. The use of stickers as the tokens to be won for good behavior is most appealing to younger children. Older children will come to view stickers as "babyish" at some point. So, it is necessary that when using a token economy with older children stickers are swapped out for some new form of token that older kids do find compelling and valuable.
Often, for older children the sticker chart is reformulated as a behavioral checklist, with children earning check-marks for good behavior in place of stickers. The basic concept remains the same, however. Children must complete certain chores, personal hygiene tasks, and homework assignments every day or week, and are rewarded for doing so. At the end of a recording period of arbitrary duration (perhaps each month), the check-marks are summed up and traded in for small prizes, privileges (e.g., a trip to the library, etc.) or even a small allowance. Because children learn to earn their privileges through the use of this technique, it is not bribery when they earn their rewards, but rather a useful life lesson that children can take and benefit from when they later become adults who work for a living.