Military compensation in the Armenian Armed Forces: life cycle cost model for the Armenian Army

Abstract

The Armenian Armed Forces is moving from a conscript force to a volunteer force. They are based on a soviet-era military structure, but are attempting to adopt a Western-style of force structure, similar to the U.S. and U.K. A key element in this is the establishment of a professional NCO corps within the Armenian Army. As they seek to develop the senior enlisted ranks, as well as move to an all-volunteer force, they have identified the need to re-evaluate their current military pay and compensation structure. This must all be done with an eye toward long-term personnel costs, which is currently not happening. This project developed a cost model to examine the various life cycle costs of the military compensation system for the Armenian Army. The focus is on the structure of the Armenian Army peacekeeping brigade and incorporates the new, proposed professional NCO corps into a new rank and pay structure. The model allows the Armenians to adjust criteria to look at the cost implications of various manpower policy decisions. It also provides total compensation costs on an annualized basis, allowing policy makers to make informed budgeting decisions. The results show the costs at different manpower and rank mixes.