Retention Bonuses

By lex, on January 21st, 2009

Ward’s team * notices some interesting disparities between the Army and Marine Corps captain retention incentives:

Bonuses that offer more money and more choices equate to greater retention – even when the incentives are tied to a longer obligation.

That’s the lesson taken from the results of vastly different captain retention programs offered by the Army and Marine Corps.

The Army, which offered a bonus of up to $35,000 or a host of career choices for captains to remain in the service for three additional years, saw roughly 70 percent of eligible officers accept the deal.

The Marine Corps, which offered captains $4,000 for an additional year of service, had less than 50 percent of eligible officers accept.

All told, approximately 16,000 Army officers signed up for the retention program out of a possible 23,000, while 3,045 Marine captains re-upped for another year out of 7,000 eligible.

Combat captains are the ground forces’ seed corn, and if too few of them decide to continue in service when their initial obligation is up, the service is in for a rough time down the road. Thus the pay to stay.

I always had a kind of moral ambivalence about retention bonuses, although I greedily took them at every opportunity. When I was a lieutenant we were offered $12k year for six years (or until the 14th year of service) to stay on, and it maybe helped push me over the edge, especially when combined with choice orders to an adversary squadron in Key West. But they also set up a dual-tier system within multi-seat squadrons, because in many cases pilots were offered them when naval flight officers were not. The bonuses even varied among pilots, with certain communities getting more year over year than others.

Pilots were more expensive to train than NFOs of course, and in those days had very lucrative careers waiting for them in the airline industry after “graduating” from the Navy. But you couldn’t accomplish the mission in those multi-seat squadrons without the whole team on board, and the inevitable perception was that the Navy valued some folks of equivalent rank and responsibility more than others. Don’t even ask the surface warfare folks of that time what they thought.

The Navy even offered bonuses for aviation commanders in sea-going jobs, to the effect that, in real terms, a squadron executive officer or CO might be making more than his air wing commander – something that was pointed out to me often enough by my own CAG when I was a CO. Eventually the captains started getting “go to sea” bonuses too. At which point the whole exercise became perceived more as an entitlement than an incentive – just another part of the compensation package.

Cheaper, though: Bonuses let the awardee shake a few reefs out of the mains’l and made him feel momentarily wealthy while adding nothing to the service’s open-ended retirement obligation. And although the notion of selfless service to country eschews fiscal considerations, in real life people typically have their families to think of by the time they’ve paid back their original obligation. If you look a young captain with battle ribbons on his dress uniform (and maybe battle scars underneath it) and try to tell him that he owes it to his nation to continue his service, he’ll look at all the other people in his generation with their MBAs and country club memberships and conclude that you’re from another planet. He’s done his bit.

The Marine Corps  has always had a reputation for institutional stinginess (among other things), so I’m not surprised that they have essentially offered their combat captains a half a month’s pay at the end of the year while a hard-pressed Army is throwing money at their own cohort of company grade leadership. If you can get a guy happily past the 10-year mark, then the odds of him staying on another 10 to see where it takes him increase rapidly. There’s something to be said for retirement pay at age 41, not to mention the medical benefits.

On the other hand, there’s a Marine manpower manager somewhere noting that his service has achieved 71% of the Army’s effect while spending only 11% of their outlay. He’s probably quietly satisfied.

* 08-31-2018 Link Gone; no replacements found – Ed.


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Filed under Army, Best of Neptunus Lex, Carroll "Lex" LeFon, Carroll LeFon, Lex, Marines

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