Military Cash Incentives: DOD Should Coordinate and Monitor Its Efforts to Achieve Cost-Effective Bonuses and Special Pays
Highlights
The Senate report to accompany the 2011 Defense authorization bill directed GAO to assess the Department of Defense's (DOD) use of cash incentives to recruit and retain highly qualified individuals for service in the armed forces. This report (1) identifies recent trends in DOD's use of enlistment and reenlistment bonuses, (2) assesses the extent to which the services have processes to determine which occupational specialties require bonuses and whether bonus amounts are optimally set, and (3) determines how much flexibility DOD has in managing selected special and incentive pays for officer and enlisted personnel. GAO analyzed service data on bonuses and special and incentive pays, reviewed relevant guidance and other documentation from DOD and the services, interviewed DOD and service officials, and observed two working groups that were determining bonus amounts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness to coordinate with the services on conducting research, as appropriate, to determine optimal bonus amounts. | DOD concurred with this recommendation. In a July 2012 report, the USD (P&R) stated that it continued to believe that a study to determine optimal bonus amounts would be beneficial. As of September 2015, DOD was working with the RAND Corporation to develop a model to analyze the impact of adjusting bonuses and special pays for certain personnel communities. According to officials at USD (P&R) the goal of this effort was to provide the services with a tool that can be used to set bonuses and special pays more efficiently. The officials added that models have been developed for officers in the aviation community, and are currently being developed for officers in the healthcare and special... operations communities. OSD officials reported in February 2017 that the study by RAND covering all bonuses and special pays had still not been issued. RAND did issue a study covering mental health care officers. In a 2020 memo from the Acting Assistant Secretary of Defense (Manpower and Reserve Affairs), the Department has conducted several studies and developed models to help estimate the optimal bonus and special pay rates necessary for specific, high-demand career fields, to include aviation, special operations, and health care. The Department and the Services now routinely communicate and collaborate in these areas, to include recent efforts to identify whether statutory ceilings for aviation bonus levels remain appropriate or should increase.
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| Department of Defense | The Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness, as the consolidation of the special and incentive pay programs is completed over the next 7 years and the instructions directing the services on how to administer the new programs are revised, to monitor the implementation of this consolidation to determine whether it is in fact resulting in greater flexibility and more precise targeting of resources and what impact the consolidation is having on DOD's budget. | DOD concurred with this recommendation. The Department fully implemented the consolidated special and incentive pay authorities in January 2018. According to senior officials in DOD's Office of Compensation, the transition to these new authorities resulted in more flexibility in adjusting rates and in more efficient and precise targeting of resources to address force management needs. Specifically, officials stated that they have been monitoring the ability of the consolidation in terms of its ability to provide greater flexibility and targeting. According to a 2020 memo from the Acting Assistant Secretary of Defense (Manpower and Reserve Affairs), the consolidation has allowed for both...
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