My skinned model gets smaller and deform badly, when I rotate its bone in Z-axis I made a model and skinned it to an armature. But when I try to deform it with a bone rotation, model doesn't just rotate, also it gets smaller.

First I thought that its because of the armature, but when I put another model, this problem doesn't occur.

Here's the .blend file: http://pasteall.org/blend/26762

Try to rotate bone "joint5" in Z-axis.

Before rotation

1 http://imgim.com/2755incix2686812.jpg

After rotation

2 http://imgim.com/8460incih5544599.jpg
You haven't weight painted your model

From the Wiki
Weight Paint in a nutshell

Weight Painted Vertex Group


  
  You enter Weight Paint mode from the Mode Menu Ctrl-Tab). The selected Mesh Object is displayed
  slightly shaded with a rainbow color spectrum.
  The color visualizes the weights associated to each vertex in the active Vertex Group. Blue means unweighted; Red means fully weighted.