Rand Fishkin of SEOMoz fame has posted an article entitled : How to Handle a Google Penalty - And, an Example from the Field of Real Estate which includes a simple step by step process explaining how to check if your site is suffering from a Google penalty - and very importantly - how to deal with it.

The flow chart Rand has come up with steps you through several simple questions (with yes and no answers) to help you determine a strategy for dealing with a Google penalty. Here’s a summary of Rands post - including a textual representation of his diagram.

Step One - Is your site indexed in Google?

Try googling site:yourdomainname.com If your site is displayed, go to step 2 . If none of your pages come up - or if only your home page appears, then you may have some sort of penalty.

Login to Google Webmaster Central, validate your site and see if Google responds that your site is penalised. If so, clean up your site (by removing anything spammy - see Google Webmaster Guidelines and in particular the quality guidelines) and submit a reinclusion request within the Webmaster Central console.

Step Two - Do you rank for your domain name ?

Try Googling www.yourdomainname.com - If your site shows up, skip to step3 . If no, then you may have some sort of penalty.

Penalty? login to Google Webmaster Central, validate your site and see if Google responds that your site is penalised.

No penalty? Then it may be a trust issue. Review all your links, see if you have potentially bad outgoing links - and get rid of them. Drop paid link campaigns that you feel may be hurting your rankings. Drop link exchanges that you feel may be hurting your trust. Clean up other areas of the site that may seem a bit “gray”. Submit a reinclusion request via Webmaster Central.

Step Three - Do you rank in top 20 for some of your unique terms?

Try Googling some unique (or relatively unique) phrases from you site. If your pages are listed then you don’t have a Google penalty. If they don’t, then you may have some sort of penalty.

This may be as a result of Google discounting (or ignoring) the “link value” transferred to you by a bunch of your link partners. Now that those links don’t pass any value to you anymore, you probably won’t be ranking as well as you once were. If this is the case remove links back to your “suspect” link partners, and submit a reinclusion request.

Also review your site content and do some link building for great high quality, natural links.

Finally…

The above process is not a panacea, and will probably not solve all your problems, but it’s definitely a good starting point to diagnose and help address suspected Google penalties.

Rands article has also includes some great real world examples… so make sure that you drop by and take a look.