I've come up with the reward system I'd like to use for role-playing awards.  I will award "hero points." A example using a 7th level hero will be used throughout this explanation.

Sometimes, a character commits a selfless act or a brave deed that one can only call “heroic.” In such a case, the DM may award the character a hero point. A witch who jumps down into a pit full of vipers to heal a dying friend, even though he knows he’ll take damage from the fall and risks death from the snake’s venom, is a real hero. Hero points are a reward for that kind of valiant action. Hero points can be used at the player’s discretion to perform amazing - often otherwise impossible - actions.

Playtesting Results: So far these options have worked wonderfully for me. I dont worry over much about giving out too many temporary hero points since they refresh at the end of the storyline and since I can use any used for villain actions.

On average, I may give out 4-5 temporary hero points per game. It normally takes 4-5 games to finish a storyline goal and refresh them. I generally see heroes using a permanent hero point about once every two levels or so.

Hero Points: A character may gain a maximum of hero points equal to his level at any given time unless he has the Born Hero feat. A character starts the game with hero points equal to his level -5 (minimum 0). Below you can find rewards may be given to a character (at DM discretion) after character creation to increase this number.

Example: A 7th level hero who had created a background story and character appearance sections would have 4 hero points (2 to start +1 for background story +1 for character appearance).

Hero points will be rewarded at the end of character creation for the following:

• +1 for a background story that works with the world.  This point cannot be earned if the DM is the one who provides the hooks into the world for the player.  The point is to get the player's involved and aware, not the DM :-). At least 3 of the following 5 elements must be present in the background:
  1. The story is longer than one double-spaced 'type-written' page.
  2. The story ties together with one or more other character's story(s).
  3. 3 or more NPCs with usable plot hooks in the story.
  4. 1 or more major or 3 or more minor plot hooks built in.
     • A major plot hook is something that drives the story and gives the DM options to work with nearly every game session. It must be easy to work in under most normal circumstances. A minor plot hook is anything that can give such story ideas but will not do so consistently on a regular basis.
  5. 2 minor-phobias or character drawbacks or 1 major phobia or character drawback.  Phobia's/drawbacks must be a consistent part of the character's background story, and must have good potential for in-game repercussions.
     • Example of minor phobia is having phobia of a specific creature type, such that the phobia will come up in the game, but not necessarily very frequently.
     • Example of a major phobia is having a phobia of the dark, or crowds, or magic, something that is likely to come up in game practically every session.
     • Example of minor drawback is addiction to gambling.
     • Example of major drawback is building a very, very powerful enemy into one's background.
     • All Phobia's and drawbacks are subject to the DM's approval to decide if the effects and repercussions are minor, major, or absolutely of no value whatsoever.
• +1 for developement of the characters appearance. This must include at least 2 of the following 3 elements.
  1. An illustration.
     • I don't care who draws it, as long as it's a representation of what they 'really' look like. Don't draw a frog and call it your character but a cartoon-like sketch or digital artwork are both great.
  2. Having a miniature of your own that looks like the character..
     • The miniature is painted. (more than just a single solid colour). I don't care who paints it or how good they are at it however.
     • If using OpenRPG, then a gif miniature will work. In this case, painting is digital.
  3. A diagram showing where all equipment is held or stored.
• +1 for doing up your home area. With interesting and pertinent details or rumors concerning the surroundings. You must have 1 of the following things included as well to gain this bonus:
  1. Provide a decent map of this home, home-town, village, or what-have you.
  2. A list of 5 or more personality traits that show why your character has their chosen outlook and 1 thing about them that is outside their general outlook but why this doesn't change their outlook.
• All of these bonuses are stackable to a maximum possible 3 hero points. You can only take each item once. Hero Points are not given until the reason for it is achieved. You can design assuming you'll get them of course, but keep in mind that things like plot hooks are judged by the DM.  As mentioned above, a character has until its 3rd gaming session to be finalized.

You can gain additional permanent hero points in the following ways:

Each time a character performs an act of dramatic heroism. To qualify as an act of dramatic heroism, a action must fulfill three criteria.

1. It must accomplish a significant task in the defense of good or the defeat of evil.
2. It must occur at a dramatically appropriate time (usually the climax of an adventure).
3. It should require significant risk on the part of the hero.

Temporary Hero Points: The character starts each storyline with a number of temporary hero points equal to their permanent hero points. These refresh (no matter what their number of temporary hero points are.. higher or lower) at the end of the storyline to the number of permanent hero points.

Temporary hero points are given out for heroic actions, particularly impressive examples of rping, witty comments that makes the whole table laugh, creative combat descriptions that cause me to pause and imagine the scene, etc. This can raise the temporary pool above the starting total.

Example: A 7th level hero with 4 hero points would start each storyline with 4 temporary hero points. He gained 4 during the adventure for a total of 8 by the climax of the storyline. He uses 2 during the climax for a total of 6 by the end of the adventure. For the next storyline, he would reset his temporary hero points from 6 to 4 (his original hero point total).

Villain Points: Any temporary hero points used by you are added to a pool of villain points villains can use, although these added villain points cannot be used until the next encounter. This means that as you spend temporary hero points, you can expect villains to start using villain points as well. Normally I only use them when a villains actions would add to the story in some impressive way (such as the main villain bluffing you at the start of the murder/mystery adventure).

When used, villain points are gone (not given to a player). These also refresh at the start of the next storyline, just as temporary hero points do. Some important villains start out with their own personal pool of villain points.

Use of Temporary Hero Points:

Dramatic Uses of Hero Points

I encourage the use of hero points in dramatic ways rather than mundane ways.

A mundane use of a hero point might be:

• Using it to help make a simple attack roll.
• Using it to help make a simple skill check.
• Using it to help make sure a spell succeeds.

Dramatic ways of using a hero point include the following:

• Attacking a foe by swinging across a great hall on a rope attached to a chandelier.
• Firing an arrow (or throwing one's sword) to cut the bonds of a bound ally in the middle of a fight.
• Popping open a lock in the middle of combat by banging on it just right.

I encourage players to use hero points to attempt actions seen in a movie or read about in a story. I may secretly increase the bonus offered by the hero point if the player chooses to use it in an interesting, fun, and dramatic matter.

Hero points may be used for only one of the purposes below on any single round. The maximum number of temporary hero points that can be used on a single action are shown on the table above. The below are guidelines for hero point use, but other possibilities exist. If you wish to try something outside these uses, ask the DM if it is possible and he will tell you how many temporary hero points it costs after you attempt the action.

Special Note: Born Hero talent allows you to use d8s each time that a d6 is mentioned below.

• d20 Roll: One temporary hero point may be spent after a d20 roll (such as skill checks, attack rolls, saving throws, initiative rolls, or ability checks) to add 1d6 to the roll. For every additional temporary hero point used (up to the maximum number), the hero gains another 1d6 to add to the roll. This addition must be made before you discover the success or failure of the action. Note that the DM may apply villain temporary hero points to the DCs of certain tasks.You may do this even whenever you roll a d20 roll (with only one hero point action per round).
  • Example: A 7th level hero rolled a 10 on his Will save to avoid being dominated. Not sure if this will succeed, the player uses a temporary hero point (rolling a 3) for a total of 13. Deciding this still isn't enough, he adds another temporary hero point (rolling a 5) for a total of 18. He might not be happy with this total, but this is the maximum number of temporary hero points he can use on the roll.
  • Attack Roll: If used with an attack roll, and the attack roll would have succeeded without the hero point, the hero point doubles the base damage (not special effects like sneak attack or energy damage) inflicted by the attack or it allows the PC to make a “called shot,” inflicting a special effect such as:
    • A strike to a foe’s eyes that blinds her for 1d10 + 4 rounds (Reflex negates).
    • A strike to a foe’s head or other vitals that stuns her for 1d3 rounds (Fortitude negates).
    • A strike to a foe’s limb that renders it useless for 1d6 rounds (Fortitude negates).
  • Saving Throw: If used with a saving throw for half damage or a partial effect, if the character would have made the save without the help of the hero point, he takes no damage or ill effect at all.
• Extra Move Action: One temporary hero point may be spent to gain a extra move-equivalent action in a round on his turn.
• Stabilize Self: One temporary hero point may be spent to stabilize when bleeding to death.You may do this even when it is not your turn.
• Damage Reduction: Temporary hero points may be spent (before damage is told to the player) to reduce each set of physical damage (not spell damage) that effects you for a full round by a amount equal to 1d6 for every temporary hero point used (up to the maximum you can use per action on the chart above). This works like Damage Reduction, but you roll seperately for each hit taken. You may do this even when it is not your turn.
  • Example: A 7th level hero was down to 10 hit points and was about to be attacked by a hill giant, he could declare that he intended to use two temporary hero points if he was hit by the hill giant to reduce the damage. If the hill giant then hit him for 13 damage and a archer struck him in the same round for 5 damage, he might reduce the hill giant blow by 10 (rolling a 4 and a 6 on his 2d6) and negate the arrow damage entirely (rolling a 1 and a 5 on his 2d6).
• Extra Special Ability Use: Two temporary hero points may be spent to gain a extra use of a class or racial ability that is restricted to a certain number of times per day. This does not include spell-like abilities, but does include extraordinary and supernatural abilities such as Turning Undead, Raging, Shifting, Shapechanging, Witchery Manifestations, or other abilities that could have multiple uses per day.
• Feat Use: Two temporary hero points may be spent to gain temporary use of a feat that the character doesn't have for a combat.  The character must still have the prerequisites for any feat gained.
  • Example: A 7th level hero could not gain Precise Shot if he didn't already have Point Blank Shot.
• Character Trick: Perform a pre-created special character trick (agreed between the DM and player).
  • Each character can have three to four tricks that fit the characters class and race.
  • Example: A dwarven defender has the following three tricks: use 1 hero point to anchor his feet into the stone and make himself immovable, use two hero points to shatter a weapon struck by his axe (Fort save for the opponent), and use three hero points to shout in a manner that causes a small avalanche in a 10 foot radius that causes 1d8 earth damage/2 class levels (Ref save for half).
• Dramatic Action: Perform some dramatic action outside of the scope of the rules. The amount of temporary hero points is upto the GM to decide after you describe the action.
  • Example: a magister could use a hero point to cast a special version of vitrification that turned a foe to glass for only one hour (instead of permanently) or that could be undone only by some specific requirement (the touch of three honest mojh or exposure to the light of heaven, for example). An unfettered might try to use a hero point not only to disarm a foe but to send the weapon sailing into the hand of a nearby ally.

Use of Permanent Hero Points: Using the below methods reduces the permanet hero points of the character (the ones that refresh at the end of each storyline).

• Extra Action: One hero point may be spent permanently to gain a extra full round action at any point in the initiative.
  • If a character uses a hero point to act when it is not his turn, he can take a normal round’s worth of actions out of the regular initiative sequence with no special bonuses. He then returns to his normal initiative count.
• Reroll HD: One hero point may be spent permanently to reroll a Hit Die roll when rolling for hit points when leveling up. The new roll must be used, even if lower.
• Extra Feat: Five hero points may be spent permanently to gain an additional feat that the prerequisites are met for.
• Avoid Death: If used when a die roll determines that the character will die, the character avoids death and instead suffers a great and debilitating injury determined by the DM - the character gains a disfiguring scar, loses a hand, loses an eye, gains a limp, and so on. This is the only case when a hero point can be used after the result of an action is determined.