The Karma system is slightly flawed technically, because when you rate someone the first option is "Awful" and the last option is "Excellent". If this was changed to a button scale (have 5 option buttons horizontally) then it would be better IMO.
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You may be different, but most people are extremely likely to complain, and extremely unlikely to contact the good-service-giving-person's boss.
The solution to this in the company I work at is a survey link given in every automated e-mail from a closed ticket. You'd be surprised, but the average score of our analysts is 4.5, whereas I'd guess the average Karma score for every user is less than 3.
Another problem with the Karma system is the "Edit Post" feature. I could theoretically create an awesome guide and receive 100 Excellent ratings (which are worth 6 instead of 5), and then out of the blue edit my post so it is completely blank, and no one who rated the guide Excellent can rate again. An admin could probably nuke the rating, but perhaps a better solution would be to allow re-ratings (which would also fix rating mistakes).
In the end, Karma is like religion: some people believe in it, some people ignore it, and some even die for it. Every religion has it's strengths and weaknesses, but as long as many people believe in it, it will survive.