The combinatorial retention auction mechanism (CRAM): integrating monetary and non-monetary reenlistment incentives
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Authors
Coughlan, Peter J.
Gates, William R.
Zimmerman, Brooke M.
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Date of Issue
2011-11
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Publisher
Monterey, CA; Naval Postgraduate School
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Abstract
This research addresses the potential retention and cost impacts of providing an optimal individualized portfolio of non-monetary and monetary incentives to influence reenlistment and retention behavioral in enlisted Sailors. Specifically, it explores three mechanisms for administrating enlisted retention: a purely monetary auction, a Universal Incentive Package (UIP) auction, and the Combinatorial Retention Auction Mechanism (CRAM). In this text, the mechanisms are simulated, their outcomes compared and their respective strengths and weaknesses explored. The findings of this research confirm that CRAM clearly outperformed the monetary and UIP auctions. Cost savings to the Navy reanged from 25 to 80% over monetary incentives alone. Additionally, this research addresses the force-diversfying potential of CRAM. It is shown, for the sample used, that offering certain non-monetary incetives changed the demographic mix of Sailors retained. By allowing Sailors to choose only those benefits which suit them, the Navy can eliminate the waste associated with unwanted benefits, while at the same time empowering its members.
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Technical Report
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NPS Report Number
NPS-GSBPP-11-013
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This 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.