At the beginning of kindergarten it is really important for a child to come in with some concept of what his/her name looks like. Holding a pencil somewhat correctly is also a big plus.
When I teach young children how to hold a pencil, I have him/her lay the pencil facing away from the body. I ask the child to pick up the pencil and use the pointer finger from the opposite hand to flip the pencil into position. I make sure to point out that the three fingers gripping pencil are rounded.
After this is taught, I can simply say... PICK AND FLIP. The child will automatically pick it up and flip it back into the correct position.
It is sometimes helpful to place a marker line around the pencil where the child needs to place his/her fingers.
pencil grip link
Rounding Fingers: Place a pom-pom in the space between fingers and pencil. Make sure that your child knows to not smash the pom-pom.
Pulling the Pencil Back Against Opening Between Pointer and Thumb: Loop a rubber band around your child's wrist. Make sure it is not too tight.
Take a second rubber band and thread it under the wrist band. Place both ends of the rubber band over and around the pencil. This will pull the pencil back into the correct position.
Click here to view a picture of using the rubber band as a grip assistance. Scroll down to page 182.