How is the penalty factor used in the penalty method?

I am modeling a transient contact problem using the penalty method instead of the augmented Lagrangian method. How does COMSOL use the penalty factor when the penalty method is being used? I understand how it is used in the augmented Lagrangian method. This is described very nicely in the Structural Mechanics User's Guide. The penalty method is not described at all. Any help would be greatly appreciated!

Ryan