The U.S. Army is looking to modernize its special and incentive (S&I) pays to increase their efficiency in improving retention and incentivizing greater performance. Specifically for aviator S&I pays, the Army is considering proposals that would make S&I pays contingent on achieving specific career milestones. Such a policy would aim to not only sustain retention but also target compensation to individual qualifications and talent.
Army Aviation Special and Incentive Pay Policies to Promote Performance, Manage Talent, and Sustain Retention
Published Aug 7, 2023
- How can the Army alter aviation S&I pays to be based on career milestones while also sustaining retention?
- Does setting aviation S&I pays based on career milestones increase the incentive for higher-ability pilots to remain in service?
- Can changes to aviation S&I pays offset the adverse effects of the civilian demand for pilots?
- How have prior policies, such as changing the initial active-duty service obligation from six to ten years and changing to the Blended Retirement System, affected aviator retention?
The U.S. Army is looking to modernize its special and incentive (S&I) pays to increase their efficiency in improving retention and incentivizing greater performance. Specifically for aviator S&I pays, the Army is considering proposals that would make S&I pays contingent on achieving specific career milestones. Such a policy change could increase incentives for the development of valuable human capital and improve retention among aviators who achieve defined milestones. Ideally, the proposed policy change would aim to not only sustain retention but also target compensation to individual qualifications and talent.
RAND Arroyo Center researchers extended RAND's dynamic retention model (DRM) to Army aviators, including the option for prior enlisted service and multi-year contracts tied to aviation bonuses for warrant officer aviators. The model includes commissioned and warrant officers who entered aviation service between 2002 and 2009 and follows them over their careers until 2021. The new DRM was then used to assess alternative proposals for setting S&I pays based on achieving specific career milestones, how this change might affect retention, the possibility of increasing aviation-specific S&I pays to keep up with inflation, and how S&I pays might be varied to respond to changes in civilian labor market pay. The researchers also used the DRM to determine how the change to the Army's Blended Retirement System and the change from a six- to ten-year initial service obligation affected aviator retention.
- Setting aviation S&I pays based on career milestones can increase the incentives for higher-ability pilots to remain in service but will require higher S&I pay levels to sustain retention.
- Increasing the initial service obligation increases retention over the entire career, likely due to members being closer to vesting in the retirement annuity.
- Increases in warrant officer aviation S&I pays can maintain retention event when external opportunities in the civilian sector improve.
- By increasing continuation pay above the minimum level, the Army can offset adverse retention effects of the Blended Retirement System.