A Google penalty is what happens when a website or a page is negatively affected by a Google algorithm update or is manually penalized because of an infringement on the basis of Webmaster Guidelines. If there is a huge plummet in the search engine rankings which you cannot explain the reason of, there could be a number of issues which you should fix and adjust the website accordingly. To stay away from Google penalty, you can hire agencies like Marketing and advertising With MediaOne to look after this issue.
For this, you need to check websites like Search Engine Roundtable which delineates new Google updates and all the associated rumors. You may be concerned about the site ranking, but never jump the gun to make changes to your site or content or else you may end up exacerbating it.
Rather you can invest some time in checking what exactly happened and inspecting to ensure that the update aligns with the changes in ranking. Eventually, you have to analyze carefully on how your site is affected because of those algorithm changes.
Another analogy is that your website may have been penalized manually. In other words, your site has been reviewed by an employee of Google after they have flagged it for not meeting the guidelines. These penalties can sometimes be serious and you will have the chance to resolve them as well and this will be showcased in the report in your Google Search Console account as well.