No. Bad behavior should not be a penalty to a child's grades! Bad behavior should be addressed through conferencing with the student, his/her parents and his/her other teachers. A student who behaves badly should have natural consequences - loss of privilege, detention, no computer time, no recess, etc.
Behavior ties into grade outcomes when disruptive students are unable to complete their own work; however, they already are penalized when they don't complete their work. A student who does well academically can still be disruptive, but ask yourself WHY is he or she disruptive? Is he being challenged academically? Is she bored? Is the work too easy?
Behavior is too subjective, just like "participation" is too subjective. How can I really say a student is NOT participating just because he/she won't talk? He/she can still be absorbing information and processing what has been said.
What is your definition of the bad behavior? What kind of disruptions? I have given my disruptive students who NEED more challenging work enrichment work and computer privileges. "You're finished already? Great! Why don't you design me a power point showing your understanding of the characters' relationship to the plot."
And if worse comes to worse, the envelope trick. "You're done, oh great, I need someone to run this errand! Take this envelope to Ms. X." This allows the student to work off a little energy. For some of my more active students, I give them a wall. When you're finished, you can walk around and do specific anchor activities, help others, or go online and do Moby Max.
If energy consumption is not the issue, sometimes attention-getting is. Start giving praise when the behavior is not disruptive (privately for older kids else you'll ruin their street cred!)
I look at the reasons the student is disrupting. Grades don't come into it as a way to punish behavior. If he does the work, he gets the grade he earns. If he doesn't do the work, he gets the grade he earned. Bad behavior has a reason, though -- the need to move. The need for attention. Immaturity. ADHD. Bored and needing a challenge. And when the student doesn't understand and is embarrassed, he/she might disrupt the class, but if the child is doing well academically, start analyzing their behavior. When do they disrupt? How do they disrupt? What does the day look like when they don't disrupt?
Hope this helps a bit!