Research for SRB
February 1, 2012
An assessment of the costs and benefits that would result if the Navy were it to substitute lump-sum Selective Reenlistment Bonuses (LSSRBs) for its current program of anniversary payment SRBs (APSRBs). The principal argument in favor of this policy change is to capitalize on sailors’ preferences for receiving payment in the here and now: in front-loading payments, the Navy could offer smaller SRBs without reducing the value that Service member’s place on these bonuses. The principal argument against paying out lump-sum SRBs is that the prospect of receiving anniversary payments acts as an incentive for sailors to remain in the Navy during their term of reenlistment, and eliminating these would increase losses from the Service. Our analysis suggests that adopting LSSRBs would likely result in significant savings over the long term, even accounting for the possibility of increased losses (these savings would be especially great for smaller SRBs that are offered for shorter reenlistments). We also find that the policy change could have substantial non-monetary costs and benefits: adopting LSSRBs would result in the SRB program being easier to manage when the economy is contracting, but more difficult to manage when the economy is expanding.
Cost-Benefit Analysis of Lump Sum Bonuses for Zone A, Zone B, and Zone C Reenlistments: Final Report
May 1, 2004
The Selective Reenlistment Bonus (SRB) program is the primary tool for shaping the career force. The first-term, or Zone A, SRB is key because it is the only point at which recommended and eligible Marines can be denied reenlistment in a skill area (PMOS) if their numbers would exceed requirements. In this paper, we find that SRB multiples have a large effect on reenlistment rates by occupation. Additionally, lump-sum SRBs have a larger effect on reenlistment rates than those paid in timed installments. We estimate a model that includes factors influencing the reenlistment decision separately for Zones A, B, and C. Results suggest that SRBs significantly raise reenlistment rates in all zones. Furthermore, the switch to lump-sum SRBs had fairly dramatic effects on program costs. We estimate the Marine Corps saved $8 million in Zone A and $10.4 to $25.7 million in Zone B by offering lump-sum rather than timed bonuses in FY03. We estimate predicted reenlistment rates by occupational field and bonus level and a decision model that strength planners can use to set Zone A SRB levels by PMOS. Finally, we compare the relative costs and benefits of SRBs versus lateral moves for filling boatspaces in undermanned areas.
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April 1, 1996
From FY 1992 to FY 1994, the Navy's Zone B retention rate for enlisted personnel fell by 13 percentage points. Zone B refers to sailors in their seventh to tenth year of service. The Center for Navy Analyses studied this drop in retention and found that the FY 1994 rate was about 5 percentage points below the rate projected in the post-drawdown steady state. The study also concluded that Navy drawdown policies could explain 8 percentage points of the 13-point decline in retention seen between FY 1992 and FY 1994. Of those 8 points, 2.4 were attributed to monetary separation incentives. However, the effects of any Navy policy are difficult to pinpoint because of the large number of factors at play that also affect retention. For example, the drawdown coincided with an upturn in the civilian economy, which may have also contributed to the drop in retention from FY 1992 to FY 1994.
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September 1, 1993
As part of the study Managing the Enlisted Marine Corps in the 1990s, CNA analyzed success patterns of Marines making lateral moves. Each of these Marines retrains in a primary military occupational specialty different from the original one. The Marine Corps currently has no basis for judging the success of Marines initiating lateral moves. Our analysis of historical data provides planners with information to help judge the efficiency of these moves. We will first describe the Marine Corps manpower planning and how lateral moves fit into this planning. We then consider the costs of selective reenlistment bonuses versus lateral moves. Finally, we provide statistical analysis of historical data on lateral moves. Our analysis of lateral moves focuses on the following considerations: (a) patterns of successful completion of a lateral move; (b) the promotion and attrition experience of Marines who have made lateral moves relative to their cohorts; and (c) experience in the Marine Corps compared with performance of occupation-related tasks.
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July 1, 1991
First-term reenlistment decisions for recommended and eligible Marines in FY 1980 through FY 1990 are analyzed in this research memorandum. Particular attention is given to the retention effects of selective reenlistment bonuses on Marines in different Armed Forces Qualification Test score categories. Additionally, reenlistment behavior for Marines of different marital statuses, grades, and length of initial enlistment contracts are analyzed.
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October 1, 1985
Enlistment bonuses are monetary incentives promised to potential recruits to induce them to sign contracts to join the Navy. The bonuses, paid upon successful completion of class A schools, have been awarded in military skill areas characterized by inadequate volunteer levels. This memorandum describes how the Navy has used enlistment bonuses. Additionally, it provides estimates of the efficacy of enlistment bonuses for procuring recruits for the nuclear field.
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July 1, 1985
New estimates of the effect of unemployment on enlisted retention are provided in this paper. Unemployment is found to have a positive effect upon the reenlistment rate for seven of the nine rating groups studied, and a positive effect upon both the extension rate and the total retention rate for all nine rating groups. However, the pay elasticities are three to five times as large as the unemployment elasticities, so that decreases in the unemployment rate may be offset by much smaller percentage increases in military pay.
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December 1, 1984
An economic analyses conducted by CNA to evaluate policy options for meeting the Navy's growing manpower needs is described. The work was done in support of the Navy's Planning, Programming, and Budgeting process.
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September 1, 1983
Analyzes the effects of regular military compensation and reenlistment bonuses on the probabilities of reenlistments and extension among first-term and second-term Navy enlisted personnel.
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April 1, 1976
Reenlistment bonuses are a powerful tool for effecting the retention behavior of enlisted personnel. The proper allocation of these bonuses across ratings was found to require information the Navy does not currently possess. A technique was developed for assisting in this allocation process when the ideal information is not available. Recommendations are made for altering or improving the criteria on which bonus allocations are based. The Navy's personnel data system and future research needs are also evaluated.
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