You should make the "round penalty" greater at lower rounds.
So if A guy is drafted in round 1-4 he moves up 1 round for next.
If a guy is drafted 5-8 he moves up 2-3 for next year so
So on and so forth.
So if you drafted a guy in round 23, and kept him for 4 years, by the 4th and 5th year you have him(1st doesn't count as a keep year) your actually paying decent value for him.
A 1 round penalty is meaningless once you get past round 10 or so. I guess some people like this, but Imho if you get lucky on a prospect you draft in the 23rd round(regardless of how much research you do, not all prospects pan out, hence the luck) you shouldn't be able to keep him for 4 years at basically 0 cost. A few saavy owners can quickly become "unbeatable" and it ruins the parity in the league imo.
Most people around here seem to do a 3-5 round penalty at the back end of the draft.
Just my .02