It's worth noting that there are a number of different schools of thought on the best ways to develop your prospects. Some people believe in the one year, one level philosophy where a player spends a year at Rookie Ball, a year at Low A, a year at High A, etc. Others believe your best prospects should play with your best coaches, regardless of level. Others will give each prospect just a short time at each level, and move players up multiple times per season.
There is not necessarily a "right" answer among these choices and others. The game's developers have suggested (indirectly, at least) the ways you might want to think about dealing with your prospects. I'm going to re-print those comments here so that you have them in one place.
From a developer chat in January 2008: Q: What is the best way to develop a player? What are the pitfalls/factors that help a player reach their projected ratings? Is it possible for every player to reach their potential, or are the players that don't reach their projections a deliberate part of the game design?
A: Lots of factors are at play. Player makeup rating, age, peak age (varies from player to player), coaching staff, performance, level/age relationship (25 yr old at lo a isn't a good idea, for example), injuries and demotions. Most players should reach their projection assuming a normal progression pattern. Remember, some players continue to improve beyond 27 years old, but the display of projected ratings lock in at age 27. If they improve beyond that, their projected ratings synch up to their current ratings.
Q: Does the level a player is at affect his speed of development? Or is it only a product of coaching, playing time, and success?
Yes. Level and age matter and so does repeating a level too many times.
Now, some information from a developer chat in September of 2007.
Q: Does making the MinL playoffs in any way help player development?
Minor league teams that make the playoffs will see a slight boost in development due to the fact that they are playing in more games than those teams who do not make the playoffs.
Q: Is there a benefit to having players that are going to make your team play in Spring Training? Do they perform better if they get a certain number of ABs/IPs in the spring...or will not playing much hurt their performance?
A: There is a benefit to playing in Spring Training. As long as a player is playing he reaps the rewards of the big league level coaching staff and sees some development increases because of it.
Q: We know that if you demote a player, there's a risk of a demotion penalty depending on various factors (age, makeup, patience, etc.). if you assign a player for whom you just traded, does the same risk apply? i'm not talking about that player being stuck at the new level for a long time, i'm only asking whether assigning a newly-acquired player to a lower level functions the same way as a demotion. thanks.
A: Assigning a player to a lower level can have the same affect as demoting a player.
Q: I have seen players over the age of 30 gain projected overall ratings after a trade. For instace a player I had went from 75/75 to 76/76 after I traded him. What caused that?
A: Every player has a different peak age, so one can continue improving at age 30 while others won't. If a roster move occurs close to a player's scheduled development cycle, it will occur at the time of the roster change.
In my experience, I have seen a lot of players screw up their prospects' development by disregarding some or all of these answers. I'll provide examples (usually from my own team or guys that I traded away to people who are no longer part of the world).
Pasqual Rodriguez: A very solid RF who played one good season in the majors for me before I traded him away. The owner who got him assigned him to High A and then Low A for some reason. He played exactly one season there before retiring. I have no idea why he thought demoting a guy four levels was a good idea (especially after he had proven that he was capable of playing at the major league level), but the player disagreed and he ended up with nothing to show for it.
David Bland: A short reliever who could have been a nice short arm in a bullpen. He was assigned to Low A and rookie by his new team after playing at AAA and in the majors. He retired after that season.
Jackson McKinley: His ratings weren't great, but he probably would have been a serviceable backup OF for a major league team somewhere (he certainly hit AAA pitching well). He wasn't demoted too far, but if a guy has been in the pros for seven years and is only in AA, he's probably going to retire.
Harold Jones: He rocketed through the low minors, appearing in AAA in his second pro season. Then he sat in AAA for four years, got demoted to AA and retired. I don't remember his exact projections, but they were substantially higher than where his numbers ended up. If you notice-- his "current" ratings actually dropped during a couple of his later seasons.
Hopefully, this will help you decide the best way to develop your young players. Of course, you can always figure out which owners have had the best success in developing players and try to decipher what those teams do.