Research for Assignment Incentive Pay

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Manning Under AIP
June 1, 2006
The Navy began offering Assignment Incentive Pay (AIP) for hard-to-fill billets in three geographic locations in June 2003. At that time, N13 asked CNA to analyze various components of the experiment. In this CNA report, we analyze different aspects of the experiment that are now possible because it is no longer in its initial stages. In particular, we conducted an analysis of (1) how overall manning has changed since AIP began, (2) how manning has changed in AIP locations that were selected early in the experiment, (3) differences in the quality, or other characteristics of Sailors in AIP locations, (4) changes in the rate at which Sailors selected for AIP jobs ultimately show up for those jobs, and (5) retention decisions of single-parent Sailors since AIP began.
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Military Compensation Reform in the Department of the Navy
December 1, 2005

In this memorandum, we assess the extent to which major, existing compensation tools align with the Department of the Navy’s (DoN’s) goals and principles and recommend changes that would better align compensation with these goals. Our recommendations revolve around three themes. First, the current system is inflexible and does not maximize taxpayers’ return on investment. A better-aligned system would expand use of the DoN’s more flexible compensation tools. Second, the DoN does not have any tools that are explicitly designed to reward high performance. However, existing compensation tools could be modified to provide this linkage. Finally, the current system is heavily skewed toward deferred compensation such as retirement pay, retiree health care, and TRICARE for Life. The DoN should seek to remove this bias by supporting the repeal of recent enhancements to these programs or, at a minimum, by aggressively resisting any further increases. More generally, offering cafeteria-style health care and retirement benefits would improve flexibility and help maximize effectiveness.

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Evaluation of the Assignment Incentive Pay (AIP) System
June 1, 2004
The Navy has long faced shortages in certain critical shore billets. A variety of methods have been used to fill these billets, including involuntary assignments and sea duty credit for rotational purposes. However, these methods are inflexible, affect endstrength, and reduce retention. To better alleviate shortages in hard-to-fill billets, the Navy began offering Assignment Incentive Pay (AIP) in three locations in June 2003. In this paper, we analyze several factors related to AIP: (1) whether access to JASS appears to be restricted for certain categories of Sailors (since Sailors can only apply for AIP using JASS); (2) differences in application rates and fill rates for AIP jobs based on job characteristics and level of AIP cap; (3) application activity for other Type 3 and Type 6 locations to determine which may make good candidates for future AIP locations; (4) a method by which application activity could be examined on a continuing basis to help determine whether AIP cap adjustments are necessary; (5) the cost-effectiveness of various lump-sum payment schemes as an alternative to the present monthly payment scheme; and (6) the overall cost-effectiveness of AIP to date.
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Findings and Implications of the Assignment Incentive Survey
October 1, 2002
Abstract:D6620 Because the Navy must order personnel into hard-to-fill billets, negative impacts on manning can result. Consequently, the Navy is considering ways to restructure the assignment system including the implementation of an Assignment Incentive Pay (AIP). The Assistant Deputy Chief of Naval Operations, Manpower and Personnel (N1B) asked the CNA Corporation to analyze the attractiveness of alternative incentives meant to persuade Sailors to volunteer for historically hard-to-fill billets. To do so, we developed and administered the Assignment Incentive Survey. Against the backdrop of upcoming AIP implementation, the most important findings from the analysis are those that relate to the effects of special pay on Sailors' assignment preferences. At the most fundamental level, we find that pay is an effective way to sway people's assignment decisions, which indicates that AIP is likely to work. For example, a monthly special pay of between $60 and $900 would make an assignment to Japan attractive. The amount of money that will make a hard-to-fill attractive differs depending on Sailors' dependent status and current assignment location. For example, Sailors without spouses or children have less of a home-basing preference, so these Sailors will most likely be the first to fill hard-to-fill billets with AIP attached.
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