A New Tool for Assessing Workforce Management Policies Over Time

A New Tool for Assessing Workforce Management Policies Over Time: Extending the Dynamic Retention Model

Beth J. Asch
Michael G. Mattock
James Hosek
Copyright Date: 2013
Published by: RAND Corporation
Pages: 90
https://www.jstor.org/stable/10.7249/j.ctt4cgdnt
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  • Book Info
    A New Tool for Assessing Workforce Management Policies Over Time
    Book Description:

    This research extends the dynamic retention model to simulate the transition to the steady state, providing researchers with the ability to assess the effects of workforce management policies both in the steady state and in the transition to the steady state as well as to assess the effects of alternative implementation strategies. It helps policymakers better understand workforce dynamics and how they respond to policy change.

    eISBN: 978-0-8330-8196-4
    Subjects: Management & Organizational Behavior, Technology, Economics

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures
    (pp. vii-viii)
  5. Tables
    (pp. ix-x)
  6. Summary
    (pp. xi-xvi)

    The dynamic retention model is a state-of-the-art modeling capability that permits analysis of the effects on workforce size, experience mix, and cost of changes to compensation and personnel policies. Much of the empirical application of the model has been for the U.S. military. In the military context, the DRM is a behavioral model of each service member’s decision to stay or leave the military where members are rational and forward-looking, differ in their preference for the military versus the civilian sector, and face uncertainty about future events that may cause them to value military service more or less than civilian...

  7. Acknowledgments
    (pp. xvii-xviii)
  8. Abbreviations
    (pp. xix-xx)
  9. Section 1: Introduction
    (pp. 1-6)

    Recruiting and retention are the backbone of the all-volunteer force. Past research shows that a critical factor affecting the supply of personnel to the armed forces is the level and structure of military compensation relative to civilian alternatives. Military compensation is also a significant portion of the defense budget and affects the standard of living of military members.

    Because of military compensation’s importance as a recruiting and retention tool, a cost-driver, and a determinant of the financial well-being of military members, policymakers require information on how changes in the level and structure of military compensation will affect supply, cost, and...

  10. Section 2: Extending the DRM to Incorporate the Transition Period
    (pp. 7-36)

    The DRM is an econometric model of officer and enlisted retention behavior in the AC and RC. It models service members as making retention decisions each year over their active and Reserve careers. The model assumes these members are rational and forward looking, taking into account both their own preference for military service and uncertainty about future events that may cause them to value military service more or less, relative to civilian life.

    While the analyst cannot observe individual preferences for military service or the uncertainty assumed to affect decisions each period, we can assume the unknowns have known probability...

  11. Section 3: Application to Military Retirement Reform
    (pp. 37-58)

    The current military retirement system dates back to the 1940s when a common system was created for officers and enlisted personnel in all branches of the armed services. The current active duty military retirement system is a defined benefit plan that vests personnel at 20 YOS with a benefit based on a member’s years of service and basic pay and that allows vested personnel to draw benefits immediately upon separation from service.

    Numerous commissions, study groups, and analysts have critiqued the system.¹ The focus of the criticism has primarily been on the system that covers active duty members, though increasingly,...

  12. Section 4: Concluding Thoughts
    (pp. 59-62)

    The research summarized in this report extends the dynamic retention model to simulate the transition to the steady state. This extension provides researchers with the ability to assess the effects of workforce management policies both in the steady state and in the transition to the steady state as well as to assess the effects of alternative implementation strategies. Consequently, it greatly enhances the capability of research to support evidence-based decisionmaking with respect to workforce management. It also helps policymakers better understand workforce dynamics and how they respond to policy change.

    The transition modeling presented in this report has major advantages...

  13. Appendix: Additional Model Results Related to Retention Effects
    (pp. 63-70)
  14. Bibliography
    (pp. 71-74)