Hi Zuber, I would start my reply with a question for you: Does your company offer overtime payment or extra payment when employees work late or after office hours? If the answer is no, then deducting their salaries for latecoming is also a strict no-no. If the company cannot maintain punctuality, how can you expect it from employees?
Instilling Punctuality Through Leadership
Now coming to the query, punctuality can only be instilled with examples; the leader has to walk the talk, and then the team will follow.
For example, Sumit was the Head of the Purchase department in a company and used to come late every day because he worked till 8-9 pm after office hours. The team worked with him till 8-9 pm, but as a senior, he was allowed to come late while the team was reprimanded by HR every day for even being 10 minutes late.
We changed the policy and asked all employees to come on time and leave on time. Within a few days, things were streamlined.
Positive Reinforcement Strategies
Additionally, you can introduce punctuality awards for employees. Every fortnight, announce a winner and give some token of appreciation. Positive reinforcements always work. :)
Hope this resolves your query...