The Combinatorial Retention Auction Mechanism (CRAM): Integrating Monetary and Non-monetary Reenlistment Incentives
NAVAL POSTGRADUATE SCHOOL MONTEREY CA GRADUATE SCHOOL OF BUSINESS AND PUBLIC POLICY
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This research addresses the potential retention and cost impacts of providing an optimal individualized portfolio of non-monetary and monetary incentives to influence reenlistment and retention behavior in enlisted Sailors. Specifically, it explores three mechanisms for administrating enlisted retention a purely monetary auction, a Universal Incentive Package UIP auction, and the Combinatorial Retention Auction Mechanism CRAM. In this text, the mechanisms are simulated, their outcomes compared and their respective strengths and weaknesses explored. The findings of this research confirm that CRAM clearly outperformed the monetary and UIP auctions. Cost savings to the Navy ranged from 25 to 80 over monetary incentives alone. Additionally, this research addresses the force-diversifying potential of CRAM. It is shown, for the sample used, that offering certain non-monetary incentives changed the demographic mix of Sailors retained. By allowing Sailors to choose only those benefits which suit them, the Navy can eliminate the waste associated with unwanted benefits, while at the same time empowering its members.
- Personnel Management and Labor Relations
- Military Forces and Organizations