In this paper, we study the problem of designing prefix-free encoding schemes having minimum average code length that can be decoded efficiently under a decode cost model that captures memory hierarchy induced cost functions. We also study a special case of this problem that is closely related to the length limited Huffman coding (LLHC) problem; we call this the soft-length limited Huffman coding problem. In this version, there is a penalty associated with each of the n characters of the alphabet whose encodings exceed a specified bound D(≤ n) where the penalty increases linearly with the length of the encoding beyond D. The goal of the problem is to find a prefix-free encoding having minimum average code length and total penalty within a pre-specified bound P. This generalizes the LLHC problem. We present an algorithm to solve this problem that runs in time O(nD). We study a further generalization in which the penalty function and the objective function can both be arbitrary monotonically non-decreasing functions of the codeword length. We provide dynamic programming based exact and PTAS algorithms for this setting. © Shashwat Banchhor, Rishikesh Gajjala, Yogish Sabharwal, and Sandeep Sen.