4th Edition Rules - comment now or forever shut yer trap!

[Airlifter]

Larry Marak posted this in the Rules Forum a while back:
"Retreat (Panic and Preservation rules)
As Matt indicated in a recent posting on the Avalanche company support forum, retreat only becomes a factor when playing linked scenarios, where losses in one scenario cripple you in the following scenarios. I'm only aware of one scenario in Heroes that requires retreat to score victory points, reflecting a general withdrawal on an operational level after the scenario had begun.

As assaulting force that takes heavy casualties (that still has leadership) does one of three things in order to preserve combat effectiveness; 1. dig in and wait for reinforcements (Russia, Germany), 2. call in heavy artillery or airstrikes (U.S.A.) or 3 conduct a fighting withdrawal (U.K., Italy, Russia). Provided the retreat was authorized by Stavka, the Soviets gave medals for conducting successful retreats.

PG doesn't really reflect or reward retreat, and I'm not sure how to interject that into a smoothly running machine. S.P.I. incorporated Panic and Preservation levels into their tactical games in the mid 70's We'd probably need to award v.p.s for exiting units to the rear after losses of a certain percent. Sounds clumsy though."

Vince Hughes followed up with thoughts on maybe awarding VPs for keeping a portion of the force intact and in good order.

Having fussed with a lot of VPs, I think the idea here has some merit, but I don't have a crystallized idea yet. Usually VPs focus on --did you achieve the objective you set out to, but did it cost you too much? So we reward the taking of objectives like towns, bridges, and hills, and eliminating enemy units or advancing off the map in the enemy rear. The defender gets rewarded for holding the ground and killing the enemy. I don't want, as a designer, to force the player's hand into retreating if he wants to send good troops after bad. Plenty of commander's have sent unit after unit to destruction. If you do, you lose. But, we don't currently have a mechanism that directly affects morale of an army. Sure, you lose initiative after losing xx number of steps, and that gives the opponent the chance to mop you up, but that's not the same as everyone getting jittery because their division commander keeps sending battalions forward in dribs and drabs to destruction on a battlefield littered with corpses.

Does anyone use a house rule for this? Say every two initiative steps lost = 1 morale step loss? What would the implications be on games? Would this make players more sensitive (too sensitive?) to losses, much as if in a campaign where every step lost hurts you for the rest of the campaign?
John