I have used 'time' chips in the past for tournaments, back in our early days when play could get excruciatingly slow at times. Warning players and threatening to kill hands both seemed to be adverse to our 'friendly' atmosphere, so we came up with a solution that penalized players for taking too much time without affecting play (not killing hands).
All players were issued X number of time chips, each representing 30 seconds of time. The number of chips issued per player was dependent upon the expected length of the event -- four time chips (totaling 2 minutes) were issued for a four hour tournament, for example. Here's how they worked:
1. One 30-second time bank per hour of estimated event length is distributed to each player, represented by ‘time’ chips (2 chips per 2-hour event, 4 chips per-hour event, etc.).
2. The time chips are held by players and collected by dealer upon use. 30-second time banks may be used individually or consecutively, but not incrementally (once partially used, a 30-second time chip bank is void and must be surrendered).
3. A 30-second auto-clock is imposed on a player each time he or she faces an action decision. If the player has not completed his or her action by the end of the 30-second time period, the dealer tracks the player’s further use of time. Upon the conclusion of the action, the dealer collects any time bank chips (if used), and notifies the tournament director of incurred time penalties prior to the next deal.
4. If a player exhausts his/her time bank allotment, subsequent rail time-penalties will be applied at a ratio of 1 minute for up to every 15 seconds of delay, as clocked by the dealer. Rail time-penalties are served at the beginning of the next hand. A player’s hand is never killed/mucked for using too much time.
The system worked very well. At the time, we had two players who would Hollywood to no end over all sorts of trivial decisions. Once time chips were added to the mix,
everybody's play progressed much quicker, including the two slowest players. Most tournaments saw maybe one or two time chips TOTAL being surrendered (so no penalties), and over a three year period, a rail time penalty was issued only once. But the real gain was the fact that the
time chips in play caused players to be cognizant of the amount of time taken. We eventually stopped using them, because they were no longer warranted.
Sorry, no pics of the chips we used (unmarked dropa discs, and later time-labeled china clays). But I really like Gene's on-the-clock ceramic chip design: