In public Waldorf schools (and many schools with a "whole child focus"), letters and sounds are learned in the same way they originated in the course of human history--through story, drama, movement, and visual art. People told stories, then recreated the stories through performance and visual art. Abstract signs and symbols developed from the art and pictures.
Our kindergarten, first and second graders hear stories for each letter, draw pictures, and discover the letter and sounds through movement and artistic expression. The children make the letters with their bodies, beeswax, yarn, found materials, and through form drawing or handwriting practice. As they form the letters with their bodies and in their artwork, the children work on crossing the midline, or the ability to work on both sides of the body. This midline work activates both sides of the brain and leads to deeper learning as well as improved fine motor skills. In kindergarten and first grade, SCCS teachers use Schrager's LMNOP and all the letters from A-Z as part of their weekly stories and songs. In 2nd grade, the children learn stories from Davidow's The Wise Enchanter: A journey through the alphabet.
These stories, along with learning through art and movement, allow for phonetic work through songs, poems, and games that keep a joyful and living experience of language and fosters a deep understanding of elements of reading, including phonemic and phonological awareness, phonics, comprehension and development of vocabulary. A large vocabulary is a key trait of good readers. As they retell the stories through their art, they develop oral fluency, another important element of reading.