res said:
The one thing that I didn't like about 3.0/3.5 is that they didn't have any kind of moral rolls in the core books. We found them in the miniatures handbook but 2nd Ed had a good, if not confusing moral system.
People should run away unless there are some sort of extenuating circumstances.
Sorry to be anal-retentive, but you meant "morale", right?
Anyway, I've addressed this issue in my own game once or twice... sometimes I'll have enemies fight to the bitter end, others they'll run away (or attempt to do so) when things start to go sour for them- it's highly based on context, though. The same enemy might flee in one circumstance but stick around in another (ie, if mommy dragon is getting thwacked, she's likely to just fly away and live to fight another day, but if her babies are in danger, she'll do everything in her power to take the adventurers down, even if it means her own death.) Intelligent and non-intelligent foes alike both will flee under most circumstances, if they can. The next encounter in my campaign is probably the first I've had where the enemies won't flee- they've been driven too insane to care.
Other than circumstances, as mentioned above, if there's a blatant "leader" type in the combat, like a gnoll alpha female or a paladin commander or a pack leader of some sort, I'll allow them to make some form of a Charisma check to prevent their group from routing if odds are against them- though this sort of thing can be exploited by canny characters as well. A group of baddies who's just seen their leader, the strongest or smartest or otherwise best of them cut down is far less likely to stick around, even if they have fair odds of winning otherwise.
In many cases, causing enemies to flee gives pretty much the same results for the party as killing them, so I normally don't dock them experience for not running after fleeing foes when it isn't imperative to kill all of them. Fled or dead, if the threat is eliminated, they get XP. I NEVER fast-forward because the resources used up (on both sides) in the tail end of combat can make all the difference- not always, but it's always a possibility. Who knows when Joe Average Goblin might roll a lucky crit?