There has been a lot written in the OSR blogsphere on various experience point systems and how to grant experience points. The two main ways being; the classic granting of experience points for treasure brought back to town, or a more exploration based approach where XP is granted for encountering new things.
Overall I find that no single one person has really figured out a clever system to grant experience points and that even in my own attempts something still feels missing. I don't think I'll solve this problem but after reading several other blog posts about the issue it's all gotten me thinking about it. To this end I have come up with the following design considerations.
1. Most XP progressions require way to much XP at higher levels
To begin, I very much like the system of gold for XP. It's kind of my default way to grant XP. However, I find that after a couple of levels as the XP requirements begin to inflate, it quickly begins to feel a bit ridiculous where players begin to need absurd wealth to advance in level.
I know that in older versions of the game, this lead to domain level management where player characters begin to become rulers of mini-kingdoms as they push back the wilderness. Where they'd be making money from other means than just finding treasure in dungeons to sell.
Overall, I tend to prefer my games to not involve domain level play and stick to exploration and dungeon crawling. So while gold for XP does work in earlier levels I feel like it begins to loose impact in later levels as the amount of wealth needed is so much that it kind of becomes out of reach.
One thing that I think is sorely needed in most OSR systems is a recalibration of the XP charts as most people seem to just grab an existing one without thinking about the progression much.
2. XP should not be given for something the players will already do
Another very strong design principle for XP systems I think is that players shouldn't be rewarded for something they would already do. I can't remember where I originally read this, I think I read it in someone else's blog somewhere, but but overall once I heard it I found it to be a trap most XP systems fall into.
If your players are going to very frequently encounter and kill hostile monsters, then granting them XP for doing so is kind of meaningless.
If your players are stuck kind on your rail-road quest line then granting XP for achieving certain milestones or plot points, is kind of meaningless.
If your players are going to be exploring a dungeon and finding gold sitting out in the open then granting XP for it is kind of meaningless.
In all these cases I think granting XP for stuff the players are very likely going to be doing already is meaningless as it's being given out as neither a real incentive nor a real reward. Just something the players get for just playing the game.
Overall, I think there is nothing wrong with this on the surface, but if this is what you are doing, it's usually a lot simpler to just level a the character every set number of sessions. Like 3 sessions and you reach level 1. Six sessions and you reach level 2. Or just level everyone at the end of every major adventure. Just level your characters this way and don't bother tracking all the little fiddly thing they are going to do anyways.
Players generally expect to level every once and a while to keep the game interesting. Most OSR games I've played begin with doing gold for XP for the first few levels. Then because of XP bloat and the free ranging shenanigans that most adventuring parties get involved in as they reach higher levels, I tend to just level them every once and a while after a big adventure or 'score'. I think this practice is fairly widespread.
3. XP should encourage risk
I think it's kind of a common misconception that XP is like a reward that can guide player behaviour. I think it can a little bit. But I don't think I've ever had a player really do something up front for the XP. Overall I find the general setting of the game and the rest of the rules you are using will guide player behaviour a lot more than how they gain XP.
If your game has a lot of crunchy rules for fighting and your players encounter hostile monsters a lot, in a fantasy world full of hostile monsters, I think most of the time they're going to end up fighting the monsters rather than talking to them, even if you grant XP for talking to them.
The rules and setting of your game, in my opinion, should be the real things which try to influence player behaviour and the style of game you're playing. And if they aren't supporting the desired style of play, then you probably need to find a different system and achieve greater buy in from the players about the setting.
Then what, or should, XP encourage? I think it should encourage risk. It's one reason why I do think XP for gold works so well.
If the players kill a bunch of bandits in a dungeon and find gold coins in their pockets, it's not really 'treasure' to me. The players are kind of just doing something they'd normally do.
However, if they hear the bandits stole a bunch of expensive silk bundles and have them hidden away in their lair somewhere, or if they come across a giant diamond sitting in the middle of a (presumably) trapped filled room, then it's doing something different for me.
In this case the treasure is encouraging the players to take a risk. They're not just delving into the bandit lair cause the mayor asked them too and they want to develop a greater relationship with the mayor and happen to find gold in the process.
They're seeking out that particular bandit lair and doing things like thoroughly searching it increasing their risk because they know that the increased risk will lead to an increased reward. They're trying to obtain the giant diamond despite the traps because they think it'll be a big payout.
Some XP systems are kind of explicit about this where they only give XP for treasure recovered and brought back to town, not gold made through investments or something.
XP should encourage risk because a smart player tends to be a cautious one. A game played too cautiously tends to be boring. XP for treasure helps as it often directly encourages risk.
This all kind of became really clear to me in Neoclassical Geek Revival where Zzarchov Kowolski basically had a rule that for every dungeon room explored, the amount of XP given for it would be cumulative.
So you'd get like 10 XP for the first room. Then 20 XP for the second (total of 30). Then like 30 XP for the third (total of 60). Then like 40 XP for the fourth room (total of 100).
The difference is kind of subtle. Giving out a flat 10 XP per room explored doesn't really encourage risk as it's what the players would already be doing. But by making it so you gain more XP for each new room, you're directly encouraging risk. And risk is what keeps the game fresh.
4. Grant XP at the end of the session
Another major design consideration I think for XP is that it should be rewarded at the end of the session. Every time I or the players have to engage in paperwork, I find it takes us out of the evolving shared narrative. Having to track XP gained during a game for various things I think detracts from play and in my experience tends to be forgotten.
It's one reason why I'm kind of against giving XP for things the players already do or coming up with long lists of things the players can gain XP for like XP for hex explored, or new monster seen, or riddle solved, or trap overcome, etc.
These things aren't bad if at the end of the session you can look back and remember exactly what the players did, but for a lot of things, it's hard to remember. Thus I think it's much easier to tie XP to some other form of paperwork that players are already doing. Like items they have collected, or maps they have drawn, then essentially have them do an entirely new form of paperwork.
Also, I think XP should be given as a group. If you give XP for a specific activity, like killing boss monsters, it's not really fair to classes who aren't great at killing boss monsters. XP can be split up, but once again, doing so in the middle of combat after a monster is killed tends to distract from the game. If XP is given at the end of the session it allows players to discuss as a group, who gets what, and why, without it distracting from the actual game.
5. Make sure you grant XP for different activities of play
One of the reasons why I think a lot of other OSR bloggers come up with various XP systems is because if you play the game a lot you begin to realize that there are different major activities of play. XP for treasure really only rewards risk in one activity of play, mainly dungeon crawling.
Once players have completed the beginning dungeon or two they tend to spend more time exploring the landscape and setting, most often in a hex crawl. In the hexcrawl there is often less opportunity to find treasure as there is less of a narrative reason for treasure to just be sitting out in the open in the wilderness unclaimed. This kind of leaves players unable to gain XP in a mode of play that takes up an increasing amount of time as they play.
The argument can be made that there is still treasure in dungeons which the players are seeking out, but it kind of just makes hexcrawling more the thing you do quickly to get to the dungeon and not really a thing in of itself. As a different major activity and mode of play, it should have a different way of rewarding the players for risks they take during it.
The same I think can be said for information gathering and investigation. Basically players talking to NPCs and interacting with setting elements to learn more about the setting. Usually doing so is in pursuit of treasure and can lead to treasure, but it's not really rewarding risk in this particular mode in of itself. It can also be very hard to reward risk in this mode of play as very often there isn't a lot of risk to begin with.
Regardless, I do think it's important to make sure you are rewarding players taking risks in all the different major activities of play in your game, to try and encourage them to explore things and not just see those modes or activities as things they do to get to the real 'meat' of the adventure.