Key Issues > Duplication & Cost Savings > GAO's Action Tracker > Department of Defense Special and Incentive Pays (2017-17)
defense icon, source: [West Covina, California] Progressive Management, 2008

Defense: Department of Defense Special and Incentive Pays (2017-17)

The Department of Defense needs to incorporate key principles of effective human capital management in its special and incentive pay programs, which could lead to program improvements that could save tens of millions of dollars annually.

Action:

The Secretary of Defense should review whether it has incorporated key principles of effective human capital management in its programs.

Progress:

No executive action taken. As of November 2018, the Department of Defense (DOD) had not reviewed whether special and incentive pay programs have incorporated key principles of effective human capital management, as GAO recommended in February 2017. DOD partially agreed with this recommendation, and stated that it would support the opportunity to review and improve upon the principles and methods to assess the efficiency of its Special & Incentive (S&I) pay programs, and, where appropriate, would incorporate these principles in future DOD policy issuances and updates. In November 2017, a DOD official told GAO that incorporating GAO’s human capital management principles would take time, and that the department will adopt the principles in future policy issuances and updates.

In May 2018, the Office of the Assistant Secretary of Defense for Manpower and Reserve Affairs told GAO that the department considers this action to be closed. DOD said GAO’s report had found that most of the department's S&I pay programs either met or partially met the key principles of effective human capital management. However, GAO reviewed a nongeneralizable sample of S&I pay programs for nuclear propulsion, aviation, and cybersecurity occupations, chosen based on their pay programs' attributes. Further, DOD's response did not document what actions the department took to ensure all programs fully met the key principles. Without incorporating the principles, DOD and the services may not be able to ensure that S&I pay programs are effectively designed and that resources are optimized for the greatest return on investment.

Action:

The Secretary of Defense should routinely assess the impact of non-monetary incentive approaches on retention behavior.

Progress:

As of November 2018, DOD had offered non-monetary incentives for certain categories of military servicemembers, but had not fully implemented routine assessments of non-monetary incentives for all personnel, as GAO recommended in February 2017. DOD concurred with GAO’s recommendation, and according to a DOD official, DOD offered non-monetary benefits, such as choice of duty location, unit assignments, education benefits, Post 9-11 GI Bill transferability, and career intermission programs, as alternatives to cash bonuses and incentives. In addition, the individual services implemented non-monetary initiatives. Specifically, the Army and Navy used non-monetary elements within the Critical Skill Retention Bonus and the Special Warfare Incentive program, and the Air Force began exploring non-monetary benefits in addition to cash bonuses and incentives to retain its pilot population.

In May 2018, the Office of the Assistant Secretary of Defense for Manpower and Reserve Affairs told GAO that the department considers this action to be closed, noting that the department’s special and incentive pay instructions encourage the use of non-monetary incentives as an alternative to cash incentives. GAO continues to believe that the types of actions described above, if routinely considered by all DOD communities, could allow DOD to realize efficiencies in its special and incentive pay programs by increasing the use of non-monetary approaches to meet recruitment and retention goals.

Action:

The Secretary of Defense should clarify guidance on the extent to which personnel performance should be incorporated into retention decisions.

Progress:

In May 2018, the Department of Defense (DOD) stated that the department had begun to allow the military services to recognize individual performance as one of several criteria by varying the dollar amount of retention bonuses offered to a member, with high performers being offered more and lower performers being offered less. This action meets the intent of GAO’s February 2017 recommendation and should help DOD to strengthen its special and incentive pay programs by increasing the quality of personnel retained.

Action:

The Secretary of Defense should develop approaches to directly target bonuses to personnel with cybersecurity skill sets.

Progress:

No executive action taken. As of November 2018, the Department of Defense (DOD) had not developed approaches to directly target bonuses to cybersecurity skill sets, as GAO recommended in February 2017. DOD partially concurred with this recommendation and in December 2016 stated that the services are responsible for developing their personnel requirements in order to meet individual service needs. DOD also stated that it provided the services with the necessary staffing tools to recruit and retain servicemembers in the cybersecurity skill sets.

In May 2018, the Office of the Assistant Secretary of Defense for Manpower and Reserve Affairs told GAO that the department considers this action to be closed, noting that the military departments have the authority and flexibility to offer the necessary recruiting and retention tools (bonuses and incentives) for cybersecurity positions. GAO recognizes that the services are responsible for their specific personnel requirements and that flexibility is important. However, GAO’s report found shortcomings in the services’ approaches to providing bonuses to personnel with cybersecurity skill sets, and GAO continues to believe that DOD could more effectively encourage the services to develop approaches to directly target bonuses to cybersecurity personnel.

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    • Brenda S. Farrell
    • Director, Defense Capabilities and Management
    • farrellb@gao.gov
    • (202) 512-3604