Adding a Performance-based Component to Surface Warfare Officer Bonuses: Will it Affect Retention?

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dc.contributor.authorCarman, Aron
dc.contributor.authorMudd, Ryan
dc.contributor.corporateGraduate School of Operational and Information Sciences (GSOIS)
dc.contributor.corporateAcquisition Research Program (ARP)
dc.contributor.departmentOperations Research (OR)
dc.contributor.departmentGraduate Student
dc.date01-Mar-08
dc.date.accessioned2013-05-08T21:25:33Z
dc.date.available2013-05-08T21:25:33Z
dc.date.issued2008-03-01
dc.descriptionSponsored Report (for Acquisition Research Program)en_US
dc.description.abstractThe Surface Warfare Officer (SWO) community has difficulty retaining mid-grade officers, as is evident by the considerable shortfall between Officer Programmed Authorization and the current officer inventory beginning at 9 years of commissioned service.'' The objective of this study was to analyze the 13-year retention effect of adding a performance-based component to the SWO Critical Skills Bonus (CSB). By analyzing pay and personnel records from officer cohorts entering the Navy between 1987 and 2006, this study divided the sample of 1,331 SWOs into three performance tiers based on promotion timing to Lieutenant Commander (O-4). Probit regressions showed that top performers exhibited higher retention rates than lower-performing peers, though pay had a stronger retention effect among low performers. Additionally, the Commander (O-5) promotion rate for high performers was triple the promotion rate of lower performers. Expanding upon performance-tier differences, optimization models predicted a more efficient SWO CSB allocation while retaining the highest performers and remaining within budgetary constraints. Thus, research recommends adding a performance-based component to the SWO CSB, which will maximize retention of high-performing officers. Furthermore, the Navy can realize additional savings by adopting cafeteria-style bonus options, capitalizing on differences between the federal standard discount rate and personal discount rates.en_US
dc.description.sponsorshipNaval Postgraduate School Acquisition Research Programen_US
dc.identifier.npsreportNPS-HR-08-010
dc.identifier.urihttps://hdl.handle.net/10945/33787
dc.relation.ispartofseriesAcquisition Research Sponsored Report Series
dc.rightsThis publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.en_US
dc.subject.authorPast Performanceen_US
dc.subject.authorSurface Warfare Officer, SWO, Performance-based Compensation, Pay for Performance, Performance Management, Internal Labor Market, Pay Reform, Surface Warfare Officer Retention Bonuses, SWO Critical Skills Bonus, DHS, NSPSen_US
dc.titleAdding a Performance-based Component to Surface Warfare Officer Bonuses: Will it Affect Retention?en_US
dc.typeTechnical Reporten_US
dspace.entity.typePublication
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