Give XP per encounter or per session, but don’t bother calculating it based on each monster killed or each successful use of a non-combat ability. In my opinion, the progression offered in the core rules is too slow for impatient young gamers. Personally, I don't use XP at all, instead just rising the group a level when I feel they deserve it with the aim or raising about one level per month. However, many people do use XP with kids and I certainly see the value in it.
A trick I used to employ all the time was to ask the group whether anyone thinks he deserves extra XP for this session. Usually, you will get replies like “Me! I caused a lot of damage!” or “Me! I used a daily power!” or “Me! My rolls were really high!” Occasionally, however, a kid will point out genuinely impressive achievements you may have overlooked, such as good roleplaying, solving a puzzle, keeping a lavishly illustrated journal, performing some impressive battle stunt, and so forth. Don’t give in to extortion—only reward the kind of activity you want to encourage! Explain that rolling a high score or spotting an enemy is plain luck. Extra XP is for achievements of the player, not the character.
I also like to reward out-of-game activities, such as tidying up the class after the game or shushing kids who interrupt the game. Some consider it abuse of power. I consider power pointless unless abused.
He Who Dies With the Most Toys Wins
Magic items are awesome! If you don’t accept this paradigm, it’s not clear what you’re doing playing D&D. Yes, with the money they make, kids can buy any item in the book (assuming that’s permitted), but collecting loot is just so much more exciting!
On the other hand, remaining empty handed or worse — with grandma’s knitted sweater — after everybody else got a cool toy can be quite upsetting. As with XP, I suggest twisting the rules a bit, at least with younger players. Not getting an item, or getting what is perceived to be an inferior item after an encounter might well lead to tears. And we don’t want that, now do we?
So tailor the treasure for the group. Let the fighter get armor, let the rogue get a dagger, let the warlock get a wand, and so forth. Non-battlefield items, such as a ring of protection or a bag of holding, are for some reason less popular among kids than armor, arms, and implements. On the other hand, cool but useless things such as weird idols, esoteric tomes, and so forth are quite popular if presented in the right way. As a rule, younger kids, those who haven’t yet acquired the art of Munchkinism, prefer items that are different and cool to those that are effective.
Insist on fair distribution. I like this method: First, write all the items won in the encounter on the board. Make sure to have at least as many items as players, even if some of the items are ogre cooking manuals or boxes of old shoestrings. Next, have the players roll d20s to determine the choice order of the items. The player with the highest roll gets the first choice, and so on, until all of the items have been distributed. Do not use initiative because the low-Dexterity folks will (rightly) complain about this discrimination. Besides, it’s not a grabbing contest, but a fair distribution of goods. Unconscious or even slain characters should also get their pick!
The Big Money
Don’t neglect coins. Kids love coins. Even small amounts make them happy, which isn’t surprising, given that their pocket money is often only a few dollars. For this reason, a few coins, while nothing, but annoying paperwork for adult players, is cause for celebration among kids... at least until they learn that decent magic items cost thousands of gold coins.
A technique I use to maximize the “yay!” effect is to grant insignificant rewards for the first few sessions, and then suddenly drop a thousand or so gold on the group. A fair word of warning though: Put on your earmuffs before announcing this treasure.
Just like with treasure, encourage fair distribution of coins. Heroes who hoard thousands of coins while their friends have to beg for scraps in the market have a tendency to draw deadly friendly fire in combat... or during dinner.
Little Friends with Teeth
Kids will attempt to convince or tame any living creature they meet to become their pets. Rangers and druids will go as far as to directly address nature itself to send them an ally. This is how much they like non-humanoid companions!
Starting pets should be limited to rather weak creatures: ravens, squirrels, and dogs that can distract foes and spy ahead are good choices. Wolves, leopards, and eagles who can actually assist in combat are pushing it, but still acceptable.
This is good for starters, but kids given a taste of fantasy want more, and this is exactly what you’re going to give them. Not surprisingly, the most popular pets are dragons. Kids don’t really care about the dragon’s color, age, or abilities; they just want to have a dragon (the popularity of How to Train Your Dragon certainly didn’t hurt)! The story is similar in many groups; every time an NPC mentions a dragon, the kids immediately decide they want to go to its lair and tame it to be their pet, usually with disastrous results. Eventually, when they do find a dragon egg about to hatch, or a friendly young dragon looking for adventure, they are jovial.
Griffons, hippogriffs, and other flying beasts are also extremely popular. Next come horses, dogs, snakes, and other real world animals; strangely enough, they seem to be more popular than mythological monsters among most groups. Other groups, when told the town offers an excellent selection of horses and mules, will ask if I can offer them something “more interesting” like giant ants, raptors or purple worms. Try to spy a little before choosing the right pet reward for your players.
Some kids like to own servants, mostly healers and gladiators. Slavery is a touchy subject best avoided with younger gamers; this reward should be used with discretion, possibly only as a prelude to a discussion on the nature of slavery.
To summarize, this is the order of pet awesomeness*:
Servants and followers
The Power and the Glory
After dozens of bloody battles, the players stand victorious over the smoldering ruins of the tyrant’s citadel. The people, now free of his oppression, look up to their heroes to lead them to a brighter future. But are they ready to lead?
For me, it is fascinating to see how a group of young children deal with the responsibility of managing nations and shaping the fates of thousands. Some kids really enjoy it. One group in particular has designed a new religion, wrote a bible for it, trained evangelists to spread it across the land, and eventually raised a fundamentalist oligarchy of some 15,000 humans, elves, and dwarves with towns named after heroes. This religion now has a Facebook group and a fair amount of likes. Also, it makes the Spanish Inquisition look cute in comparison....
Another group convinced all the slaves they freed in a series of bold assaults against an orc fortress to join them in forming a militaristic community in the forests. Each player has his fighting unit and spends some time each session describing how he trains and stations his troops.
It’s a Bird! It’s a Dragon! It’s a Successful Hero!
So we’ve discussed XP, gold, treasure, influence, and companions. Now let’s talk about the coolest reward of them all: transhumanism! Under this bombastic term I include all rewards that grant powers or features to the character, be they powers that stem from the gratitude of demon princes or superpowers induced by the bites of radioactive mosquitoes.
Depending on the source of the power, it can be the same special ability given to each member of the group (“you have rescued the snow witch; grateful, she grants you powers over cold and snow”), powers tailored for each player’s gaming style (“you have survived my labyrinth, now let each be rewarded according to his exploits”), or utterly random (“everyone who eats a fruit of the eldritch tree gains a different aspect of a beast”). Mechanics-wise, transhumanist powers perform the function as magic items with the obvious exception of not being a tradable commodity.
Below are some suggestions of transhumanist rewards:
These are the rewards most often given by supernatural beings such as nature spirits, ghosts, minor deities, demons, and so forth. Unable to give the characters any physical rewards, they instead sacrifice a small portion of their essence to bestow some aspect of divinity on the heroes who risked their lives to help them.
These rewards are usually the same for each player and relate to the domain of the rewarding being. For example, a water spirit will give the power to breathe underwater at will and command water as a daily power, while a devil may negotiate with his masters to organize a one time “get out of hell free card” which gives each hero a single automatic resurrection. Or, for example:
Purification of Flames (Level 4)
Having cleared the fire spirit’s shrine of the undead blight that corrupted it, you were granted powers that will help them clear the land of undead more efficiently.
Property: When you take necrotic damage, you gain combat advantage against the attacker and a +2 bonus to all defenses until the end of your next turn.
Power (Daily * Fire): Minor Action. The next time you hit a target that has dealt necrotic damage to you this encounter, that attack deals extra 2d6 fire damage.
Superpowers and Mutations
Superpowers can be granted by grateful wizards, true deities, magic accidents, or through interaction with artifacts or suspicious matters. The difference between a superpower and a mutation is that the former is an additional power the character can use—such as flight, regeneration, X-ray vision, and so forth—while the latter is actually a major change in the body of the hero, such as growing an additional pair of hands, skin transformation into tough bark, or getting a toothy maw that deals melee and poison damage.
Mutations might traumatize some kids because, for all their usefulness, mutations are still a deformation of the body and make particularly sensitive kids uncomfortable—sometimes to the point of not wanting to play the character any more. Use them with discretion.
I like to accompany mutations with random tables on which the players roll their mutations. For example:
1 Vine Tendrils
2 Bark Armor
3 Sticky Sap
4 Poison Spores
5 Grappling Root
6 Camouflage Leaves
7 Defensive Barbs
8 Dazzling Flowers
9 Wood Sturdiness
10 Re-roll twice
Vines Tendrils (Level 6)
Thick vines grow from your body. Through extreme excretion of will you can make them move and even fight.
Property: You gain a +5 item bonus to Stealth and Athletics (Climb) checks in wooded areas.
Level 16: This bonus increases to +10.
Power (Encounter): Standard Action. You can target up to three creatures within a close burst 1. The attack is made with your highest physical ability score vs. AC. A hit deals 1d6 + ability score modifier damage, and the target is restrained until the beginning of your next turn.
Being well known in the realm has its advantages; merely saying “boo” sends fearsome warriors fleeing, the most outlandish claims are accepted without question due to your unblemished reputation, and—after saving the land from the Great Wyrm—every shopkeeper automatically offers you a 50% discount. Good (or bad!) reputation is as much a power as shooting lasers from your eyes.
This reward should be granted to heroes who actually deserve it, tailored for their achievement.
Celebrated Detective (Level 3)
Your unblemished reputation in fighting crime and exposing injustice makes you a force to be reckoned with on the streets.
Property: You gain a +5 item bonus to Streetwise and Intimidate checks in urban areas.
Power (Encounter): Minor Action. The next time the target makes a Bluff, Insight, Stealth, Streetwise or Thievery check against you, the target rolls twice and uses the lower of the two rolls.
Cybernetic enhancements from aliens that have crashed on the planet, magic creatures that bond with the heroes, special tricks taught by grateful grongards, wandering souls looking for a home in return for their wisdom and magic might... the possibilities for transhumanist rewards are limitless!
Enhanced Vision (Level 6)
Your eyes have been replaced with highly advanced prosthetics that offer you excellent vision and area scanning abilities.
Property: You gain darkvsion.
Power (Encounter): Standard Action. You can see invisible creatures until the end of your turn.
In addition, I also recommend reading the “Echoes of Power” section of the Dark Sun Campaign Setting (p.211). It contains many excellent transhumanist powers as well as tips on using them as rewards.
Apotheosis of the Gamer
Oftentimes, a kid will spend most of the session leafing through the Monster Manual, stopping at random pages and asking, “Can I play this?” When the question is asked about a purple worm, a gelatinous cube, or an oversized beetle, one is almost tempted to say “sure” and watch him handle playing a character slightly more intelligent than the chair he is currently sitting on. This was a joke — don’t do it unless you’re doing a wacky session.
When the question is asked about a centaur or a young dragon, you can either bum him out by saying “no” or motivate him by saying, “Sure, but you must earn it first.” Eventually, though, you will have to live up to your promise — and why not? An Angel of Valor (MM p.16), for example, is roughly equal in power to an 11th level character. Why not let the player’s old paladin undergo an apotheosis and become an angel as he reaches paragon tier? Or, if this seems too farfetched, why not let the old grognard rest his blade and let the angel who watched over him for so many years take his place?
Character apotheosis will create several problems for you—the foremost of which are player envy and character progression. The former cannot be simply dealt with by allowing all players to undergo apotheosis (don’t use this word, by the way; no one knows what it means). Kids are perfectly capable of repeatedly declining an offered advantage while saying it’s not fair someone else has it. To cope, try to occasionally hint at the shortcomings of the kid’s monstrous character. For example, “No, you can’t stealthy approach the giants—you’re basically a huge torch hurling through the night sky like a roaring jet—there is no way anyone will fail to notice you!” Just don’t overdo it or else you’ll get the reverse problem: the angel envying the mortals....
Regarding level progression, this is really less work than it looks. Often, you’ll be able to use an existing class or paragon path as a basis for your table. For example, the angelic theme is already covered by the Angelic Avenger (PHB p.72). Up through 12th level you’re good—just use the path as is (although the 20th level power, angel ascendant is inappropriate, since the angel can already fly). What’s next?
The angel has the soldier role, which is the monsters’ version of the defender. That, combined with its religious background, makes the paladin the best power donor to an angel. When adapting powers, keep the following in mind: First, the paladin uses mostly radiant damage, while angels fight with fire and lightning. Secondly, the paladin is a healer, while the angel is a pure destroyer. For example, entangling smite can be used as is. Radiant charge should probably be changed into fiery charge and deal fire damage. Renewing smite, with its healing theme, is simply not appropriate for this destructive character.