I use the following house rule:
All monsters act on the same initiative. Player initiative determines who goes before the monsters on the first round, but after the monsters act the players can generally go in any order (usually in seating order, clock-wise around the table) because they will all go before the monsters' next turn anyway.
Notes:
- Since monsters of the same type normally go on the same init anyway, this just takes it one step further.
- For the monsters' group initiative: I use a 'passive check' (10 + average dex bonus) for extra-balance. (if desired, average dex bonus can be proportionally derived so that a high-CR monster isn't unduly altered by a single low-CR minion).
- You can instead roll the initiative, but it can be less balanced (i.e. easier or harder) when all the monsters share the same roll. Also, a passive check allows for speedier starts, and the players' rolls matter more.
- In practice I have the players roll init and say "Raise your hand if you beat init 12" (for example), then allow those that raise their hand to go initially (usually in seating order).
- Yes, this could allow a lucky player to go twice before an unlucky one went once, but they're competing against the monsters (not each other). Plus, this method actually doubled the rate of play, so the end result was more playing for everyone.
- The reason it doubled the rate of play is because it also allowed me to easily skip past anyone that wasn't ready (coming back to them once they were ready).
- The phrase "You'll all get to go before the monsters' next turn anyway, so I'm not too worried about the order" seems to garner buy-in even from traditional players.
- I've used this house rule for over a decade. It has done well through many discussions on the old WotC boards, dozens of conventions, and dozens of campaigns with different groups.
Wizards go 'boom' (or 'woosh')
Certain classes are really good at ending an encounter in a single move, especially at lower levels. The most obvious problem is the Fireball spell, which will end almost any encounter with Goblins and the like before it has truly even started, blowing every enemy to kingdom come.
Normally, this isn't that big a deal, because the chance that the wizard goes first before anybody else moves isn't that large. If the Goblins get a chance to spread out the encounter is no longer a one-solution-fixes-the-problem situation. Using the Edge of the Star Wars initiative system (which I've DMed for a few games and I love) essentially makes this "will one of the players roll an initiative higher than the goblin group", and that chance is significantly higher.
Players coming up with creative combinations of their powers is great. It'll help them think like a team, it promotes everybody to go "look what we did together!" and it'll lead to an overall better experience for the group.
What the Star Wars initiative system actually encourages however is to let the guy with the biggest AoE go first, who will then end the encounter before it even began. This could very well lead to resentment and arguments between players who are tired of thinking "awesome, a fight with 20 orcs!", only to see the fireball-wizard blow up the entire orc army before they even moved.
It's not as big a deal for encounters that won't be ended in a single spell such as boss-fights, but drastically increasing the chances of the player-side AoE spells going first will make a lot of encounters predictable and boring.
Even if a wizard can't kill everybody in a single spell, being able to consistently go first will mean a lot of encounters will become non-encounters. At higher levels, the wizard could always save a Teleport spell for when things go bad. "Oh woops, we walked into a room with an Ancient Red Dragon and 90 Scarymagjigs, but as long as one of us rolls higher initiative than them, I can teleport everybody away instantly, so no big deal."
Battlefield control spells are already incredibly powerful. A Wizard (or other caster with such abilities) being allowed to the ability to pretty much always go first will make that class seem even stronger than it would otherwise be, even if it's simply something as simple as giving everybody 'Fly' the moment you see the Tarrasque show up.
Best Answer
From the SRD:
Nowhere does it state that the GM must reveal what he rolled for monsters, as such it can be left up to GM discretion.
Also note that it doesn't state that the players need to reveal their initiative roll to other players. They only need to let the GM know so he can rank them in order.
I've played in games where players initiative checks are secret because we don't know what order people are going to go in. It can make the first round of combat more interesting as people have to make choices without complete information.