In my recent games, I've started to give out rank, and occasionally status and social regard for free. There are a few caveats to watch for, but in general, it has worked out very well.
With Great Rank comes Great Responsibility
My primary motivation for this tweak is to saddle the PC's with more responsibility, more decisions, and more things that can go wrong. A player may or may not feel a duty to slay a dragon razing the next town over, but if its their town, that they have an explicit duty to protect, they've got to do something about it. They could hand the responsibility off to someone else, but if things go wrong, they loose something tangible.
Giving PCs more responsibility also gives you ways to hurt them in a meaningful way. Killing a PC often feels bad, they can bounce back from wounds very quickly, and having a thief steal their magic sword for the third time can get old, but you can do permanent things to the people under their responsibility. If you kill a PC, they just get replaced, but an NPC isn't replaced, and they tend to guard their stuff a lot less vigorously than typical player characters.
Of course, this isn't giving them things just so we can take them all away. Its giving them things so we can take some of it away. We don't want to kill everyone on the ship, we want to use the number of lost crew members as a sort of scoring mechanism. It lets us play for stakes that are between complete victory and crushing defeat.
Important People Making Important Decisions
It has been said that a game is a series of interesting decisions. Interesting decisions are often important, and important decisions have a way of working their way up command chains. The PC's rank and status funnel these decisions to the people you want making them: the players. The PC's can send the decision up the chain or back down it, but even that is interacting with the setting, and that can give the GM an opportunity to have an underling give advice or have someone mess things up and then hand the problem back to the players.
Economy of Skill
Some genres call for the Player Characters to be in positions of power. The starship captain is probably the most common example. Of course, from a player's perspective, Whoever gets to be captain is 5 points down. And they aren't actually going to be in charge because the group will decide things as a whole. So we get this weird race to the bottom, where the lower rank the character, the more competent they are at their job.
The real world generally works in the opposite fashion, where the higher rank you are, the more competent you are presumed to be at your job (or at least the more competent at your last job). There can be exceptions to that of course, but I find that ignoring rank costs lets players build characters at whichever layer of the command structure fits the concept they really want to play.
Power is Fun
I'm emphasized saddling the Player Characters with responsibility, but lets not forget why they are accepting it. It feels good to be empowered. The Players have more decisions to make, but they also have more options to deal with each decision. This does push the game towards a more political game and away from hack and slash, so its not for every game, but it works well in the games where its a desired element.
Qualified for the Job
One caveat here is that you do need to insist that the players build a character who can do their job. If they want to be the captain, they need to build a captain. The captain might have quirks, like being unexpectedly good in a fist fight, but he needs to have tactics, leadership, strategy, and so forth, and he should probably be good at them. If the player really wanted to play a captain, as opposed to just having the perks of high rank, they're likely to get a good fit.
Getting and Giving Respect
The one place that rank for free can get into trouble is with reaction modifiers. I generally play this down. Player Characters often expect authority structures to work a great deal less formally than they actually do. They expect to show up at the palace and expect an audience. If they are high ranking, they're liable to be best friends with some lowly stable boy who just happens to catch their eye. And when it comes to player characters, everyone is liable to treat each other as equals.
On the other hand, funneling tasks through the person of the appropriate rank (and sometimes lower ranking is more appropriate) is a nice tool for preventing overspecialization. I also try to make it so that the PC's have fundamentally different jobs. The wealthy land owner may have higher reaction modifiers than the captain, but getting him involved in a situation will involve some in-game obstacles, and overcoming those is generally good play.
Going Even Further
In some games, I go further than making rank and status free, and make Wealth free. However, when I do so, I treat wealth much like rank: the player gets a business or estate, and the management and protection of that wealth is central to the game. The goal is to make the PC's responsible for things more vulnerable than themselves, and to give them ongoing rewards for doing so. When Wealth is treated like this, its quite manageable.
I hope this idea frees you up to run games higher up organizations than you would otherwise!
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