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 2017, 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. 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.

Implementing Entity:

Department of Defense

Action:

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

Progress:

DOD uses non-monetary incentive approaches in select situations, but does not routinely assess for all personnel whether monetary incentives could be replaced by non-monetary approaches with the same effect on retention behavior. DOD has offered non-monetary incentives for certain categories of military servicemembers, but has not fully implemented routine assessments of non-monetary incentives for all personnel, as GAO recommended in February 2017. According to a DOD official, as of November 2017, 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 have implemented non-monetary initiatives. Specifically, the Army and Navy have used non-monetary elements within the Critical Skill Retention Bonus and the Special Warfare Incentive program, and the Air Force has begun exploring non-monetary benefits in addition to cash bonuses and incentives to retain its pilot population These types of actions, 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.

Implementing Entity:

Department of Defense

Action:

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

Progress:

The Department of the Navy has proposed offering higher retention bonuses to higher qualified personnel in one officer community, but DOD has not fully clarified guidance on the extent to which all retention bonus award decisions should use performance as a criterion, as GAO recommended in February 2017. In November 2017, a DOD official stated that special and incentive pays are intended to provide additional incentives to induce servicemembers to volunteer for certain career fields that would, without those incentives, experience staffing shortfalls. The official noted that special and incentive pays are not intended to be used as a reward for an individual’s performance. According to a DOD official, the Department of the Navy plans to pilot the use of a servicemember's individual performance as a component for determining eligibility for retention bonuses targeted to fighter pilots. According to DOD officials, the primary criteria for the bonus remains skill based, but the Navy plans to determine the effectiveness of changing the retention bonus by first offering bonuses (and in limited cases higher bonuses) to top performers. This and related actions, if determined to be effective as a factor for retention bonuses and expanded to all the services, could allow DOD to strengthen its special and incentive pay programs by increasing the quality of personnel retained.

Implementing Entity:

Department of Defense

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 2017, 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 in December 2016 and stated that the services are responsible for developing their personnel requirements in order to meet individual service needs. DOD also stated that it has provided the services with the necessary staffing tools to recruit and retain servicemembers in the cybersecurity skill sets. In November 2017, a DOD official reiterated 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.

Implementing Entity:

Department of Defense
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