As for the diminishing xp bonus don’t. At least not in a losing bonus xp per minute sort of way, it’ll just bum the players out. I’ve tried a few methods in regards to bonus xp and I think the best method is to give them a bonus if they overcame insane odds or bypassed a situation with cleverness or ingenuity. This will have a sort of meta effect if you let your players know exactly what types of actions rewards what types of bonuses. But the worst thing to do is to penalize, even a bonus xp reward, it ends up with the same effect as negative reinforcement.

Another good type of bonus xp reward in combat is the role playing bonus, which is any player who does not break character and meta game gets a bonus reward(5%). This is something to do with players that are hardcore into acting, but not something to force upon casual players so the reward isn’t that great but it’s there.

Oh I almost forgot….

One last thing, this is something that I’ve tried and it balances out the healing surge loss for everyone, but when the timer runs out in addition to losing a healing surge ever player immediately gets an action point that they must use during their next turn. Sort of a momentum bonus. I thought about cutting down the enemies hp by a quarter since the players are losing a healing surge, but felt not only was that unrealistic but kinda lame. The instant action point however at least gives the players a chance to even out the playing field, so they could potentially cut down a quarters worth of enemy hp but they could also use that extra action point to do some cool stunt… or they coul bail haha!

Instead, what we have done is set up a timer for the players. The player timer is for each complete initiative round – 2 minutes per player. We have six players, so every 12 minutes the timer goes off. Everyone looses a healing surge due to “battle weariness” when that bell rings. Of course, we stop the clock while it is my turn.

I’ve also considered adding a diminishing XP bonus system where players get a 100% bonus to XP for the encounter, but the bonus drops 3% per minute of combat – thus any battle lasting longer than 33 minutes gets no bonus.

My players know if they need time to figure something out, they can hold their action.

I don’t think this rule punishes players that pay attention. If the combat is too fast for tactical-minded players to keep up, maybe they should play more tactical games. Not every player is going to fit in with every group’s style.

I have a printout called “Chroma’s Action List” for my 4E wizard. Helps me remember second wind is an option for standard actions, has all my to-hits and critical hit damage precalculated. Also the list of minor actions — drink potion, activate familiar, use duelist’s dagger daily, use orb of continuance — so I don’t forget and don’t have to think what my options are. It’s a two-page table, but I play faster than anyone else at the table.