Army Aviation Special and Incentive Pay Policies to Promote Performance, Manage Talent, and Sustain Retention

Commissioned officers and warrant officers in U.S. Army Aviation are eligible for aviation incentive pay (AvIP), which is a monthly special pay meant to maintain an inventory of trained aviators. AvIP, along with the aviation bonus (AvB), are the two main special and incentive (S and I) pays for officers who are aviators (although only warrant officers are eligible for AvB in the Army). AvB is a financial incentive offered to eligible aviators to remain in service for an additional service obligation. As part of its talent management strategy, the Army is looking to modernize its S and I pays in general to increase their efficiency in improving retention and their incentives for greater performance. To modernize these S and I pays for aviators, the Army is considering proposals that would make these pays contingent on achieving specific career milestones. Such a policy change could increase incentives for the development of human capital and improve retention among those who achieve those milestones. Thus, the aim of the proposal would be not only to sustain retention but also to target compensation to individual qualifications and talent. In addition, the Army is considering the impact of changes in the civilian economy and in the military retirement system on the effectiveness of Army aviator S and I pays. Because of high demand for pilots in the civilian economy, as we discuss in this report, retention of aviators is an ongoing concern for the Army, leading to questions of how S and I pays for Army aviators might be reformed to sustain aviator retention. The nominal value of AvIP was not updated between 1998 and 2020, degrading its value in real dollars. Although AvIP was updated in 2020, the same issue of a substantial drop in the real value of AvIP could recur if the Army fails to account for the historic levels of inflation in 2022. A substantial drop in the real value of AvIP could weaken the incentive to stay in the Army as an aviator.