A neutral person who has killed 5 people, will have -5 alignment and earn 0.5% extra gold.You get +0.1% bonus percentage on gold earned for each negative point of alignment. Negative alignment occurs when you kill a foe. A person who has 50 alignment, will damage 25 health or heal 25 Health & Magicka points.A person who has 5 alignment, will damage 2 health or heal 2 Health & Magicka points.Divine blessing is when you go to battle with someone who has a neutral or positive alignment, and heals your health and magicka equal to half of your alignment.Holy Smite is when you go to battle with someone who has a negative alignment, and does damage equal to half your alignment.You can only used once in the whole battle. In battle, you will get an action called either Holy Smite or Divine Blessing. A neutral person who has spared 50 people, will have 50 alignment and earn 5% extra experience.A neutral person who has spared 5 people, will have 5 alignment and earn 0.5% extra experience.You get +0.1% bonus percentage on experience earned for each positive point of alignment. Positive alignment occurs when you spare a foe. You get no bonus at all in this alignment.
You can also check the shield in the background of the picture in the top-right corner of the Arena screen.Looking at your Character's picture above the Character Menu button (the shield background will be black and red if you are unholy, white and blue if you are holy, and silver if you are neutral.).Going to Mr Muji's Swordsmaster (He will say "Greetings, my friend.").