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One form of punishment is deprivation, and so if one is not permitted to partake of the sacrament or to use his priesthood or to go to the temple or to preach or pray in any of the meetings, it constitutes a degree of embarrassment and deprivation and punishment. In fact, the principal punishment that the Church can deal is deprivation from privileges.
If no penalties are assessed, if no punishment is required, if no deprivation is expected, then what would induce the average transgressor to change his ways?
Church penalties for sin involve deprivations -- the withholding of temple privileges, priesthood advancements, Church positions and other opportunities for service and growth. Such deprivations result from errors which are not always punishable by serious measures but which render the perpetrator unworthy to give leadership and receive high honors and blessings in God's kingdom. These are all retardations in our eternal progress which a person brings on himself.
Source: Edward L. Kimball, ed. The Teachings of Spencer W. Kimball, Salt Lake City: Bookcraft, 1982. 98.