I've been doing a little thinking about the ways in which player characters earn experience points. Monsters and treasure are my favorites, because they're more or less objective measures. "Story awards" rub me the wrong way because they're inherently railroady - finish the story the DM wrote the way the DM wants, or you don't get part of your XP. And then there are bonuses for "good role playing," which for the most part seem to me to be just as manipulative in their own way.
I'm honestly not sure what precisely is meant by those cryptic references to good role playing in rule books and supplements. How do you define it? Is it really anything other than arbitrary judgments of the DM's personal preferences? Is there any style of role playing that can be objectively or universally condemned as bad?
Players vary a lot in their attitudes toward role playing. Some immerse themselves completely, speaking every line in character. Some prefer to maintain a degree of detachment. Either way, the player is playing the role of the character. Where's the practical difference between addressing the imaginary king directly ("What do you wish of me, Your Majesty?") or declaring that your character addresses him? ("I ask the king what he wants me to do.) Is that sort of thing really worth rewarding or penalizing?
For some players, role playing is the main attraction, and it just happens to be within the context of a medieval fantasy world. They'll happily interact with every NPC they meet about things unrelated to the presumed goals of the adventure. They'll role play every trip to the trader for provisions, and talk in character to the other players. Others are more goal-oriented, and role playing is a tool in the kit, a means to an end. They'd rather gloss over haggling with the trader, and when they talk to the other players, it's about how they're going to defeat the ogre and get his loot, not character-establishing small talk. Who's to say the latter is "bad" role playing? Actions are part of the role as much as words are, and the balance a character strikes between them is a part of his or her persona as much as it is an expression of player preference. Is a player who chooses to run a laconic character that lets his or her actions speak for themselves doing it wrong? I tend to think not.
Some players are all about character-building, in the literary or theatrical sense rather than a game-mechanical sense. They deliberately choose to play personalities different from their own. Others are more comfortable playing fictionalized avatars of themselves. It can certainly be fun to push the limits of one's range, but shouldn't that be up to the individual player to decide? Does it matter that the introverted player doesn't want to try her hand at a character who lives for the spotlight, or that a gentle player is uneasy with the thought of playing a violent brute? So what if a player always plays his characters the same way?
Well, what about acting contrary to a character's personality? That's bad, isn't it? Maybe, but who's to say what a particular character would say or do in any given situation? Who knows best what is in keeping with a character's personality, the player or the referee? How many times in your life have you done something that someone who knows you pretty well didn't expect at all? People surprise us all the time. They buck stereotypes. Some are wise beyond their years, and some never mature no matter how old they get. Bad-tempered people have days when they unaccountably find their Zen, while easygoing sorts might have a hidden berserk button. Cowards find unexpected inner wells of courage, while the bravest inexplicably freeze when faced with a secret fear. Even the stodgiest among us might get a wild hair now and then, and the flighty ditz might prove reliable in a pinch. Is it fair to penalize players just because the attitudes and actions of their characters don't conform to the referee's expectations?
Do we want to shackle players to a character concept and discourage growth and change? Should players be bound by the few words (or several paragraphs) of descriptions and backgrounds they've scrawled on their sheets during character creation, or should their personalities be revealed and defined by the choices they make during play, free to emerge and evolve? Is the character's persona the prerogative of the player or the referee?
The only type of role playing that I'd call truly bad is the sort that's disruptive to the harmony of the game group (not necessarily the same as the fictional party!) and destructive of their fun and enjoyment. Strife between characters, under certain circumstances, can be entertaining and intriguing for the players. Strife between players themselves is neither. Players with chips on their shoulders, who come to the table with the intent to bully and annoy their fellow players, or to feed their egos by upstaging and belittling, are the only really bad role players, and denying them a few hundred XPs is only going to add fuel to the fire. What's worse than a self-absorbed jerk? A self-righteously aggrieved jerk. Don't waste your time with carrot-and-stick incentives. Give him the bum's rush, and be done with it.
Conversely, I think in the grand scheme of things, good role playing is that which increases everyone's enjoyment of the game. If any XPs are to be awarded for role playing, it should be with the input of the entire group, not the decree of one person. The best play acting in the world is of no value if it doesn't enhance the experience for anyone else. A player whose character loses a hand to a nasty trap might conceive of some neuroses the PC develops as a result, or might think of no greater concern than how he's going to climb a rope with only one hand. The former may be more imaginative, but neither way is inherently better or worse. Neither can be definitively said to be "out of character," because nobody but the player knows what the character would do. If, at the end of the session, the other players remember that player's performance and say, "That was awesome!"...that's when it might be appropriate to hand out some bonuses for good role playing.
For my own game, I'd let players nominate their favorite moments (no nominating yourself!), and then vote on each. (The ref gets a vote too - my enjoyment of the game is equally important!) Any that carries a majority gets some points, with unanimous agreement earning an additional bonus. Players striving to entertain the whole group make for a far better experience than players striving to put on a hammy Daytime Emmy performance for the approval of a drama-major DM.