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Some thug bandits set up a road block on the main road to extract a toll from passersby. It was twilight when my party encountered them. They used the Rogue to scout ahead, and they ultimately decided to bypass them by taking the long way around with some stealth to avoid the bandits.
Is there RAW justification that I should award XP as if they actually fought and killed the bandits? (5 x 1/8 CR)
The rules as written for this, as taken from the DM DnD Basic Rules version 0.1 say:
Typically, XP is awarded for defeating the monster, although the DM may also award XP for neutralizing the threat posed by the monster in some other manner.
It doesn't specify how much of the XP you should award, so it is reasonable to interpret it as meaning you may award any amount of XP you like, ranging from none at all to more than if they had fought them and won.
You could base your decision on the difficulty in avoiding them, or change the amount based on the behaviour you want to encourage (e.g. full XP if you like them finding ways around combat).
If the party bypassed the encounter simply by picking right instead of left, I'd say no XP. If they worked out a tactic to avoid the combat, I'd give them full XP to reward creative thinking.
Quentin has adequately covered the rules-as-written point already1 but since the rules simply say you 'may', that doesn't really answer the question since it simply leaves it to personal discretion. The more interesting question is asked in your title 'should I award XP?'.
XP has two functions in D&D:
It's a pacing mechanism - PCs get bigger and better with more XP and can handle bigger threats, so giving or withholding XP manages players ability to engage threats and challenges in the game
It rewards, or not, specific in-game activity and by rewarding that activity encourages players to repeat it.
If you award XP for avoiding the encounter you encourage your players to use their skills to avoid or neutralise encounters instead of heading straight in to fights. This may encourage a style of play in which players make cleverer use of their abilities but will also cut down on high-action combat scenes and favours players whose characters/classes have strong out-of-combat abilities over those stronger in-combat abilities.
If you do not award XP for avoiding encounters you encourage your players to head straight into fights and slaughter for the XP rather than when necessary. This discourages clever use of abilities to avoid combat but makes sessions easier to predict.
Awarding some proportion of the XP either at a fixed rate or depending on how clever you think their solution was will produce an intermediate effect.
1 The RAW say "Typically, XP is awarded for defeating the monster, although the DM may also award XP for neutralizing the threat posed by the monster in some other manner." (DM DnD Basic Rules version 0.1)
It depends on the goal and the alignment of the party. If they are really good and they know the thugs also bother the general public, they must be removed. So bypassing the encounter does not give them any XP. Unless of course time is an issue for their assignment. If bypassing the encounter saves time and this is helpful for their goal, award them full XP.
Game mastering is no exact science. Remember that the most important goal is to have fun. Be flexible and creative. And don't be afraid to make mistakes. It is the best way to learn.
There are three ways to deal with this.
No xp: Since the threat was not neutralized in any way, you can choose to hold back on giving xp. This option is recommended if you intent for the players to go back to this confrontation.
Partial xp: The players did something smart. They played their classes, took time to scout ahead and took appropriate actions to handle the encounter. This is something worth rewarding, yet it was not as big of a challenge as fighting with the risk of death. Therefor they don't get all the xp. If they come back later to the confrontation, you can deduct this amount from their example: Fight is worth 100 xp, they get 20 xp for walking around. Later they go back with a caravan and protect them against the bandits. Now they get 100-20= 80 xp.
Bij deducting the first xp you haven't given extra xp. This is very useful if the campaign is build with pre-calculated encounters. You can of course choose to give full xp for the encounter, but be weary of handing out a lot of extra xp in this way (also with regards to wealth by level).
Full xp: Lastly you can judge that this encounter was overcome in a creative way and reward the players accordingly (as bgbarcus said).
Note that the last option is great if time is an issue for the party (see the answer from Toon Krijthe).
Noncombat Challenges
You decide whether to aware experience to the characters for overcoming challenges outside combat.....
As a starting point, use the rules for building combat encounters in chapter 3 to gauge the difficulty of the challenge. Then award the characters XP as if it had been a combat encounter of the same difficulty, but only if the encounter involved a meaningful risk of failure.
(D&D Dungeon Master's Guide p261, Wizards of the Coast)
I don't have a 5th edition DMG on hand, but I recall that in third edition, the DMG says that, on average, an encounter should consume 20% of the parties resources. Did that happen? If so, then it qualifies as a full encounter regardless of how much combat occurred. If not, then you might consider giving them a proportion of XP based on this (e.g. if it used 10% of their resources, then give them half XP), or you might want to categorize it as a roleplay encounter instead - in which case you give them as much XP as you feel is appropriate, with no justification required.
While this is based on the rules as written for a previous edition, I think that the fundamental basis of it is still applicable - in whatever edition of D&D you are using, you don't want your players to easily breeze through with no difficulty, but at the same time you don't want them to overwhelmed. So the rules were set up so that any given encounter required 20% of their resources to overcome, which is a much better absolute measure of difficulty than the challenge rating, and which the challenge rating is designed to approximate.
In any given game, the party composition and equipment of your players will vary, meaning that some CR-appropriate enemies will be harder and some will be easier, but it would average out in the end to about 20% per encounter. The same applies to non-combat encounters, which of course includes both roleplay, but also stealth missions like your example.
To put it more mathematically: Let A by the amount of resources needed to defeat your bandits, and B the amount of resources they actually used. Then let X be the amount of XP they would get for beating the bandits. You should award them X * B/A XP.
You might also want to consider using play time as a stand-in for resources. i.e. if you want them to advance in 1 level every play session, and they used 20% of the session avoiding the bandits, then give them 20% of the XP they need to level. This requires a bit more planning to pull of, but is an equally reasonable way to do things, and means you don't need to worry too much about calculating exact xp for the encounter. It depends on what kind of game style you are running - after all, you are the DM, and so for you the rules are really more like guidelines...
"Is there RAW justification that I should award XP as if they actually fought and killed the bandits?"
I did not find RAW justification for awarding the XP and the 5e DMG on page 260 seems pretty clear not to award it. However, you are the DM, your table, your game, your rules. Also, take a look at the sections titled "MILESTONES" & "LEVEL ADVANCEMENT WITHOUT XP" on page 261. If you are not awarding for defeating creatures in the first place, it doesn't matter how many they skip so long as they complete the quest/save the day.
As an aside, something to consider: if you award XP when the PC's skirt around danger, then over time the characters can out level their equipment. At the level you described its not going to matter though.
