Matt,
I think you have the balance just right. Keep it light and fun and don't get too caught up with inflexible rules.
If I had to treat my kids or my employees "equally" it wouldn't work, or the results would be wooden and marginally effective. Different people need different treatment, administered with fairness and justice in mind. What's needed is awareness and judgement. As long as the boss, parent or administrator has the ability and integrity to do what is best, this approach is always superior to rigid, inflexible rules.
If you don't think so, just take a look at any large company.
Lou