The classroom uses a behavior management system with red and yellow magnetic circles to track student behavior. Students begin each day with 5 red circles and can earn more for good behavior or lose them for misbehavior. Circles can be exchanged for toy money or prizes. The document also outlines consequences for unacceptable behavior, including verbal warnings, time-outs, loss of privileges, calls home, and office referrals, with the goal of redirecting misbehaving students.