After the big yearly reshuffle I go into the commanders screen and first weed out the dead wood. Low rank, age 60 and any health out you go. Higher rank age >60 and poor health out you go. I also will remove people who are older but without much in the way of skills. Doing this has kept my officer pool much healthier looking and seems to produce better quality officers as the juniors are more often given commands.
I then go in and assign officers to commands that the automatic system doesn't (the civillian fleet) this is a time consuming mess but it gives my junior officers command experience. It would be nice for a "vancant commands" check box to exist to allow only commands of the right rank and that aren't filled to show up so scrolling isn't necessary.
The one thing I have noticed is that I can use the civillian fleet to encourage promotion of better quality officers by giving them commands. But I have also noticed that as your fleet expands you need to expand your naval accademy as the senior officer pool doesn't grow very fast. What I have seen is now I have younger senior officers. The clearing out of the older ones causes a chain reaction of promotions down the line. Also going in and manually assigning the officers to the civ fleet has the effect of further promoting the better officers upwards as that gives them more promotion points. One interesting effect is orginally my fleet command required R7 now it is down to R4 (seems to be tied to 3 ranks below your highest officer).
But the pool of mid-level commanders (R3) is not as big as I would think it should be. There seems to be a 1/3 rule in place R1: 240 R2: 75 R3: 24 which seems a bit odd given that R3 is pretty much required for ship commands it would be better to be R2=0.33R1 and R3=0.5R2 or there abouts to give R1: 240 R2: 75 R3: 36. I am not sure what R1 is supposed to represent in a modern equivelent. Also it might be good to have seperate tour durations for rank brackets: R1: 6 months, R2-R3: 12 months, and R4+: 24 months.
One other effect has been my highest rank is R7 and my upper range of officers R7(1), R6(3), R5(9?) is also not large but at least for the most part they are never un-assigned. I should probably go with an age cap of R1(45), R2(45), R3(50), R4(55), R5-R7(60), and R8+(any age). And any one with less than fair health goes regardless of age. I'll try this next campaign and see what happens.
One thing though is what is done with the crew numbers? In principle they should retire after a certain time in service and demand. I can't imagine that there is much sense in training people that will not get employed. But exactly the best way to approach this is hard to say.
I may also create a couple of different commands and see what this does.
It is good to have crew to limit fleet sizes though, getting rid of that in Starfire resulted in fleet bloat as then fleet size became tied to maintenance and since income grew over time allowable fleet size grew over time at essentially the same rate.