The current system works as a quite elegant solution of keeping track of reputations. I'd suggest that the main problem with it is that it's called humanity which carries a moral implication, suggesting that perhaps the "murderous bandit" way would be less proper form of survival. A quick fix for this would be to change the word from humanity to reputation, as in a real world it would be probable that if you're linked to enough murders (whether they be self defense or PKing) eventually there would be witnesses and you would garner a dubious reputation. Game mechanically the fact that you don't automatically get to a bandit skin from a single kill is good representation that not everything you do would be witnessed, but do it often enough and it will be (Perhaps adding a simple randomization effect to the mechanic of how much negative reputation it adds could even more accurately depict this, and/or decreasing the amount when no players are in a certain distance from the event). Also the beauty of this mechanic is that it's simple, it's already in the game, and most of all because people who kill in self-defense are liable to occasionally having a bandit skin, it would still be possible to use social interaction to gain trust (whether you're a PKr or not). Also doing practical favors for others should always have a reputation increasing effect like bandaging, giving blood transfusions etc. though perhaps more limited ones when aiding bandits.