Type A compensation picks are awarded based on the draft order for the current season. If you sign a Type A free agent you will lose your first round draft pick if your pick is greater than the 16th pick (Type D picks are not included). Therefore the first 16 "true" picks are protected.
We realize that in real life it is based on the quality of the player, but in Hardball that is too subjective and entirely based on opinion. The best compromise, and the most fair solution, is to base it on the worlds current draft order.
Also, supplemental picks are re-ordered during the first day of the Amateur Draft Preparation period based on draft order.