The 1-2 foot rule is good in general but it's not absolute. For example if you find good green weeds in the waterway you are fishing, that should be a great place to target pickerel, bass and other species of gamefish. However, if those weeds grow three feet off the bottom and your bait is buried inside the weeds a foot off the bottom, it will be difficult for your target species to find the bait. I generally try to set baits 1-2 feet above any cover to make it more visible but I will also set a few larger baits about mid-way in the water column as well. I find this very effective for pickerel and other large predators.
One other quick tip (no pun intended). Instead of using a store-bought shiner, use a natural forage bait from the lake you are fishing. One of my favorite baits for big pickerel and other large predatory fish is a dink perch. If you happen to jig up a 4-6" perch, and it's legal to keep, put it back down on one of your tip ups on a quick strike rig. You won't get as many takes on these larger baits but the ones you get will usually be (much) larger. Dink gills and chubs also work too. Just remember to check the regs on the waterway you are fishing. Some lakes have special regulations that apply to panfish and other species so you'll need to make sure they meet the minimum size requirement. Also, remember that each fish you use for bait counts toward your creel limit for that species.