I have been teaching for 20+ years and I finally have a great solution. Yes, I tried the sitting out, reports, detention etc. We want our students active. I teach middle school so this is the first year they change clothes. I explain why they need to change, deodrant, among other health and fitness concerns. i have come up with a rubric I hope helps,

Grading Policy

Individual grades are based on a daily point system. Each class period is worth 10 points.

Breakdown of Points

Dress Out/Suit-up 3 points
Active Warm-up 2 points
Active Participation 2 points
Sportsmanship/Teamwork 1 point
Conduct/Behavior/Effort 1 point
Safety/Cooperation 1 point

Point Deductions

Late to class/Warm-ups
Lack of effort in warm-ups and/or class activities
First “time out” of activity
First inappropriate comments
Poor Sportsmanship
Non-Participation
Disruptive behavior
Not following safety rules
Ignoring instructions

Loss of Entire Daily Points and/or Principal Referral

Cut/Unexcused Absence/Suspension
Second “time out”/removal from activity

I agree with you 100%! I have the same issues in middle school. I have talked to the counselor about bringing back credits in middle schools. I think that could help motivate students to participate. Not sure that will happen though. For the past few years we have had changes in our grading policies for PE. We started at 10 points per day, now 5 points per day. We were told by our Dean of physical education a few years ago that we can't take points off for not dressing. We have to assign a detention for not dressing. WE implemented this and it has helped somewhat. We still have students who refuse to come, or after talking to parents we have to move the detention time. We have also had to change the way we have done things due to our principal overriding the Dean of PE. So we will see what the new year brings.

For my younger students, I have them read a Sport's Illustrated Kids magazine. When they are done they have to write a reflection on an article that interested them. It has worked out pretty well, although I don't have a lot of students who sit out of class.