I don’t see giving 100% attendance award as a punishment for students for being unwell, but a reward for students who strive to attend school without fail. Our schools give 100% attendance certificates at the end of each term, and I think my children only ever had it once or twice. They’re happy when they have it, but never felt they’ve been punished if they don’t get it.
I think kids need to learn that not getting a reward doesn’t mean punishment. Otherwise, life would get very difficult for them, if they expect that they get rewarded all the time.