The tier is very simple:

s1=highest priority standby (for emergencies and the like -- employees get these on merit and they are few and far between. I think they also apply if you need to head home due to a death in the family, but I'm not 100% sure one that.)
s2=priority standby (only for employee, companion, and dependent children -- They get something like 5 of these a year to put them above other non-revs that they would otherwise fall behind. These are useful when you need to get back to work and the flight is iffy.)
s3=regular employee standby
s3b=retiree & parents of employees standby
s4=buddy pass
s5=employees of other airlines on id90 tickets

All standby is determined by date of hire. So if there are 2 s1's on the flight, the one with the earlier hire date has first priority.

I hope this clears everything up.