Hmm Step 1 would just have people kill on sight to get more reward (less people to divide the reward) and get people even more aggravated.

If anything they need to add a dynamic scaling system. It would help for FATEs too. Annoying when there is no one doing FATEs but you and you run across one that is like 10-20 man buffed because other people were there before and it is tough to finish on your own or nearly impossible before the timer expires.