I tried a book called "Love and Logic" which suggests that you communicate this message: "You can do that, and if you do, thus and such are the consequences." Consequences, of course, have to be persuasive enough to change behavior. You might try: "Sweetheart, you can slam your sister's fingers in the door, but if you do, you are going to eat a teaspoon of soap and be grounded for a day from everything fun." That would probably be in line with your no-spank philosophy and still pretty persuasive.

Some consequences I've used:
-grounding from computer, friends, games
-spanking if behavior is exceptionally inappropriate (perhaps once a quarter)
-more chores (yes, even for a 3-year-old)
-throw away toys that are left out (in the sandpit which is an HOA violation and will get us fined)

But the communication has to be clear from the get-go: "If you do this, which you do have the power to do, the consequence will be thus and such." Always things are clearly explained in language they understand.

While incomplete alone (kids still need love, playtime, etc etc) I've found it effective for my kids. It was my 3-year-old who bullied my 5-year-old actually.