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Research Question

  1. What is the potential for savings that could accrue from reducing the total number of permanent change of station (PCS) moves in the U.S. military by increasing the average amount of time between them?

The U.S. Department of Defense (DoD) moves about one-third of its military servicemembers each year. This study was designed in part to support DoD in preparing a report for Congress on its permanent change of station (PCS) programs. It examined the workings of those programs with the goal of determining the potential for savings that could accrue from reducing the total number of PCS moves by increasing the average amount of time between them. The research covered current policies and programs, looking particularly at incentive programs designed to encourage servicemembers to stay longer at their current stations. The authors collaborated with the Defense Manpower Data Center to develop survey questions designed to collect responses on individual propensities to extend tours and the factors that influence such decisions, with emphasis on overseas tours, which are the most expensive. The analysis suggests that a substantial fraction of those serving overseas would be willing to extend their tour of service if a sufficiently attractive incentive package were offered. The authors recommend implementation of an auction mechanism that would allow servicemembers to bid for extensions to their current overseas tours. The estimated average annual savings could range from $19 million to $84 million.

Key Findings

Survey Results and Analysis

  • A majority of those currently serving overseas and those who have recently served overseas would not volunteer for an extension. Their responses suggest that a mandatory program would adversely impact quality of life and could negatively impact morale and possible job performance.
  • The analysis suggests that a substantial fraction of those serving overseas would be willing to extend their tour of service if a sufficiently attractive incentive package were offered.

Savings from an Auction-Based Program

  • An auction mechanism would allow servicemembers to bid for extensions to their current overseas tours.
  • The estimated average annual savings could range from $19 million to $84 million.

How a Simple Tour Extension Auction Might Work

  • Each servicemember bids on the incentive pay she or he would accept in exchange for extending her or his tour.
  • The government then ranks the bids submitted from lowest to highest and moves down the ranked list, accepting bids from servicemembers whose extensions would generate net savings and would otherwise work to accomplish the government's operational and personnel management goals.

Recommendations

  • Implement an auction-based pilot incentive program. The report discusses in detail how an auction pilot might be designed. Such a program is likely to yield permanent change of station (PCS) savings, enable better longer-term estimates of program effectiveness, and inform decisions as to how to refine a set of programs in which both the servicemembers and the government benefit.
  • More fully evaluate existing incentive programs, both financial and in kind. Regardless of whether or not the government wishes to pursue the pilot program, the authors recommend that existing programs be evaluated in terms of their net costs (or savings) to enable better informed cost/benefit decisions.
  • Continue to provide the flexibility to balance between personnel management goals and the goal of achieving PCS savings. The report emphasizes the potential value of programs that will aid in achieving such a balance. Such programs could bring about longer average tours, more stability, and some savings without disruptive and damaging side effects.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Current Permanent Change Of Station Policy and Programs to Increase Tour Lengths

  • Chapter Three

    Estimating the Supply of Voluntary Overseas Tour Extensions Without Incentives

  • Chapter Four

    Estimating the Supply of Voluntary Overseas Tour Extensions with Incentives

  • Chapter Five

    Implementing a Program to Extend Overseas Tours of Service

  • Chapter Six

    The Relationships Among Tour Lengths, Moves, and Costs

  • Chapter Seven

    Conclusions and Recommendations

  • Appendix A

    Description and Cost of PCS Moves

  • Appendix B

    Prescribed Lengths for OCONUS Tours

  • Appendix C

    Existing Programs for Encouraging Tour Extensions, In-Place Consecutive Overseas Tours, and Stabilized Basing

  • Appendix D

    Assignment Incentive Pay Programs Implemented Since 2003

  • Appendix E

    Combined Cost of All Special and Incentive Pays

  • Appendix F

    Survey Questions Relating to Tour Extension

  • Appendix G

    Attitudinal Data Tables

  • Appendix H

    Cluster Analysis Methodology and Results

  • Appendix I

    Modeling Extension Behavior with Financial Incentives Using Probit and Interval Regression Models

  • Appendix J

    Alternative Auction Mechanisms

  • Appendix K

    Private Sector Uses of Bidding for Workforce Management

  • Appendix L

    The Navy's Assignment Incentive Pay Program

  • Appendix M

    A Pilot Program

  • Appendix N

    2013 Status of Forces Survey of Active Duty Members

This research was sponsored by the Under Secretary of Defense for Personnel and Readiness and conducted within the Forces and Resources Policy Center of the RAND National Defense Research Institute (NDRI), a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the Defense Intelligence Community.

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