Toward Incentives for Military Transformation

A Review of Economic Models of Compensation

Bogdan Savych

ResearchPublished Aug 16, 2005

Two of the military’s transformation goals have particular significance when considering its compensation system: (1) assuring that the system provides flexibility in managing personnel, and (2) assuring that the system induces innovatory activities and well-calculated risk-taking. In addition, the system needs to provide incentives for performance, retention, and skill acquisition. This report reviews four models of compensation: (a) promotion tournaments, in which a fixed number of people compete for a fixed number of rewards, (b) deferred compensation, (c) pay-for-performance mechanisms, and (d) nonmonetary rewards. It analyzes how each of these works in a hierarchical organization and identifies factors within the military compensation system that might affect its transformation efforts.

Topics

Document Details

Citation

Chicago Manual of Style

Savych, Bogdan, Toward Incentives for Military Transformation: A Review of Economic Models of Compensation. Santa Monica, CA: RAND Corporation, 2005. https://www.rand.org/pubs/technical_reports/TR194.html.
BibTeX RIS

Research conducted by

The research described in this report was sponsored by the Office of the Secretary of Defense (OSD). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center supported by the OSD, the Joint Staff, the unified commands, and the defense agencies.

This publication is part of the RAND technical report series. RAND technical reports, products of RAND from 2003 to 2011, presented research findings on a topic limited in scope or intended for a narrow audience; discussions of the methodology employed in research; literature reviews, survey instruments, modeling exercises, guidelines for practitioners and research professionals, and supporting documentation; and preliminary findings. All RAND technical reports were subject to rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.