surfingbabies - dd1 is painfully shy, and struggled with being picked on, she got certificates for being brave, and for being caring. But, yes she understands that the girl that picked on her, got certificates for the times when she played nicely, or sat still in class, because we have talked a lot about how things can be more difficult for children for all sorts of reasons - sn, difficulties at home etc. She goes to a school counselling group (the girl who picked on her goes too) and they talk about a lot of this sort of stuff there too.
Dd2 has never had a certificate, and doesn't really care whether she gets one or not, she loves it when her table or her house get a mention in assembly or win lots of house points, and she understands that just because xxxx is naughty sometimes, or mean sometimes, it doesn't mean he is a horrible person.
Ds doesn't go to school yet, but he goes to a sn nursery, he has an undiagnosed genetic condition, and I am preparing that there maybe problems in his future with behaviour due to his lack of speech, and his self injurious behaviour (hitting self, banging head etc).
This is a difficult discussion to have, because all our children go to different schools with different systems in place!