Many WordPress website developers do their work directly on the Production site, WordPress makes this easy and safe for content by providing an archive of post and page versions. For changes to code this is not a good practice. I've posted an article on my blog called Professional WordPress Development Reduces Risk, this provides a set of best practices for site development. The article is addressed to site owners and not developers, but provides the basic framework. I will be adding articles that explain the steps and tools needed to developers.
I hope this is of assistance to those building websites with WordPress and to site owners.