We've got a Klam electromagnetic retarder on our bus. It looks different than yours, and I've been led to believe that there are a couple different types of retarders.....electric and mechanical.
Ours has a joystick similar to yours, as well as a power switch and an indicator light to let you know it's on. So in that way, yours looks like ours.
When ours is on, it acts as a brake on the system....but it's frictionless, so it saves wear and tear on the brakes. Level 1 slows the bus slightly, and the highest level slows it down immediately.....almost like aggressively applying the brakes (though not quite like slamming them on). I've found it to be incredibly useful not only in the mountains (no overheated brakes!) but also in normal suburban traffic or on the highway. It's almost my default braking method.
The one word of caution I'd give you, though, is that you MUST remember to put the joystick back to Level 0 when you're no longer braking. That's why it has that red light! You don't want your engine to have to fight against that 1000lb magnet on the driveshaft. I've made that mistake myself a few times and it always results in my wife smacking me upside the head and telling me to turn the retarder off.
Most buses don't have this feature, so count yourself as one of the lucky few!