We initiated the Loot Council system back when we had downed Vashj and were still working on Kael. Our system at the time was Zero-Sum DKP, a system that works well in theory. The issues came up when people failed to show up for specific content, or they kept passing on decent upgrades because they were saving DKP for something really big. While it's okay if a couple people do it, it's a huge problem when the people with the most DKP refuse to spend it on moderate upgrades and just hoard it in favor of a chest piece off of Vashj, or off-hand from Kael. The rich just got richer, and the poor poorer, in this case. A good DKP system has a healthy rotation going of people having the largest amount of DKP for their class/specification, so that everyone has a shot at having first dibs on an item. So while the three hunters in raid had a fairly decent rotation going, the hunters+rogues+warriors+enhance shammies group was screwed by one or two individuals that had a ton of DKP.
Personally, the DKP system always felt like a gamble as well, which is part of the problem. If I bid on this really nice ring from Hydross, how can I be sure that The Most Beautiful of Beautiful Trinkets won't drop from Leo? I took that gamble once. When the ring from Hydross did drop, I bid, then passed to the feral druid that also wanted it. Turns out Leo did drop his beloved Tsunami Talisman, and because I passed to the druid, I now had first dibs on it. Such is luck, but I hate relying on it.
So the officers at the time decided to institute the Loot Council system, bringing in four raiders as officers for the sole purpose of determining who gets what loot. I was surprised at being chosen, since I was fairly new to the guild. My response to the Guild Master asking me if I would consider being a LC member was "If you think I am able." And, at the time, I really don't think I was prepared.
We established some guidelines on how we would judge loot distribution:
- Attendance - Loot had to be in play in order to be useful
- Performance - If you are doing a shoddy job, regardless of your gear, the loot is half-wasted
- How the loot most benefits the raid - As raiders, we are not out for personal benefit: We are here to improve the raid as a whole to push further into content. By distributing an item to a certain individual, it should improve the quality of the raid, not necessarily the individual alone.
- Time of last serious upgrade - This is a weak rotation of gear. If someone has been in raid for awhile, but lacks in the first two areas above, and so has been passed over for gear on more than one occasion, every now and then he needs a shiny bone to chew on. Typically it is an item that drops frequently, and most of the people that need it already have it.
- Wish List - More about this later
Sometimes, but not always, the decision is trumped by the Wish List. Every three weeks, raiders are allowed to make a claim on the item they want the most. We do this to give the raiders some control over their loot. There is also a trust factor involved, where we must trust the raiders to know what is the best for their class. We use the WL for some ease at decision making, while sticking to some guidelines: the WL is not final, and someone should not get more of their WL items than another.
A good example of this was the Madness of the Betrayer that dropped this week. It was the rogue's WL item, not mine, so it was weighted in favor of him (and his low hit) despite that he already received six WL items and the item was better for a hunter.
The Loot Council system is rough and tumble, and takes a bit to get into the flow of things. We found that between 5-7 people on the council is best, any more and it gets hairy. A separate channel is also ideal, so loot matters can be kept apart from the other raid issues. We also found that not having all the officers on the LC keeps the raid running smoothly, so the raid leaders may continue on with trash while the people that want the loot are still deciding.
All in all, it's a good system, once properly situated. I'm so comfortable with it now, it'll be rough going back to anything DKP-based :)
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Update
My guild has been using Loot Council for over half a year now, and it has been going very well. We will be instituting Wish Lists again with Ulduar, as the we found that the early content updates come so fast and furious and the bosses cleared so quickly that there was no point to starting the list.
There is a significant amount of trust involved, and if your guild has no problems with discontent among the raiding core, than this never becomes an issue. I'm afraid I cannot offer advice if there are trust issues arising - we have a large, diverse officer pool that keeps problems such as bias in check.
I must emphasize one thing: All officers/LC members must participate in votes, particularly ones of great uncertainty. Otherwise, the fairness of the LC becomes compromised.
I have also noticed that, for the most part, the raiders themselves determine who gets the loot. When multiple people bid on an item, the people that notice that it is only a minor upgrade frequently pass to the people for whom it is a significant upgrade. Weak rotations form for class specific loot (weapons, mainly) where raiders acknowledge the amount of loot they have received and willingly pass if they have received multiple items recently. We do not encourage 'not bidding', however, as some players may try to play the system and not bid on upgrades in order to make it look like it is "their turn" to receive an item. (Officers/LC members should know the gear quality of their raiders so you know when a raider is purposely passing on an items, and keep that in mind as a 'Performance' aspect of loot decisions.) We want people to bid, then if they choose to, pass. Raiders cannot "pass to X" (pass on an item if it means X will get it), only pass entirely.
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