Performance Based Incentives for Military Recruiters: Evidence from the U.S. Navy
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Authors
Arkes, Jeremy
Cunha, Jesse M.
Myung, Noah
Advisors
Second Readers
Subjects
Defense Economics
Compensation
Contract Design
Recruiting
Cost-Benefit Analysis|Survey Design
Compensation
Contract Design
Recruiting
Cost-Benefit Analysis|Survey Design
Date of Issue
2017-07
Date
Publisher
Language
Abstract
Economic theory suggests that the use of flat-rate compensation for military recruiters is sub-optimal. We elicited the preferences of U.S. Navy recruiters for a piece-rate compensation scheme, and find many would prefer a modest decrease in fixed salary in exchange for the opportunity to receive a small monetary bonus per high-quality recruit. Under such a bonus scheme, the Navy could hire fewer recruiters and thus lower recruiter personnel expenses by 14.7 percent per year (over $40 million) while maintaining quality standards. Furthermore, survey evidence suggests the current policy of awarding non-monetary compensation for job performance provides minimal incentive to increase output.
Type
Working Paper
Description
Series/Report No
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NPS Report Number
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Format
21 p.
Citation
Arkes, Jeremy; Jesse M. Cunha and Noah Myung. "Performance Based Incentives for Military Recruiters: Evidence from the U.S. Navy." Available at
Distribution Statement
Rights
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.