Pay for Performance

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1 Pay for Performance American Military University HRMT 600: Human Resources Management Dr. Jill Fuson 18 December 2022

2 As an organization the United States Air Force has been long standing since 1947 after its necessity after World War Two. Much like the rest of the Department of Defense, the United States Air Force is not a pay-for-performance organization. The United States Air Force will never become a pay-for-performance type of organization because that would detract from recruiting and retentions. As a military organization, it is only right that everyone gets paid the same based on rank. Though the United States Air Force is not a pay-for-performance type of organization, it does offer, some compensations based on job, certifications, and qualifications. The United States Air Force offers some interesting compensations that do not exactly fit into merit pay, variable pay, discretionary bonuses, and non-discretionary bonuses categories, but finds ways to motivate Airmen to operate at high performances, attain certain critically manned jobs, and achieve special certifications or qualifications. As an organization, the United Sates Air Force does not necessarily have merit pay to the definition, however the Untied States Ari Force does promote based off performance levels. Every enlisted person in the United Sates Air Force receive an annual performance report that is then stratified into five categories. The number one stratification you can get is the “promote now” stratification. With that number one stratification, the enlisted member garners more points towards promotion and it makes their promotion to the next rank more likely to happen. The next stratification, and number two is the “must promote” stratification. As with the “promote now” stratification, the “must promote” stratification offers the second highest points an individual can achieve and makes them more likely to promote. The third stratification is “promote” which is usually the standard. Most individuals get the “promote” stratification because they did nothing in the evaluation year to set themselves apart from higher performers. The fourth and fifth stratifications are virtually the same. They depict individuals who have either gotten in trouble,

3 or severely not met the standards. Those are reserved for people who are being kicked out of the military due to not meeting United States Air Force standards, whether it be the individual broke the law (military or civilian), not meeting physical standards, or has continuously not met job performance standards. With those stratifications, when an individual promotes, they get a raised based on a set of criteria set by the United States Air Force. The criteria is the performance level of the individual meeting or exceeding United Air Force standards. Another pay-for-performance category that the United States Air Force doesn’t exactly do as the description is variable pay. Variable pay can be defined as compensation awarded to employees based on their performance to meet company goals. In the United States Air Force, critically manned career fields have bonuses and or special duty pay. To relate, it is like how in World War Two, the Airborne soldiers were paid an extra $50 a month to be in the Airborne. The same could be said about some of these critically manned career fields. Specifically, the Special Warfare career fields, are the most critically manned because of the physical and mental rigors of their training pipelines. These career fields encompass, Tactical Air Control Party, Combat Controllers, Pararescue, and Special Reconnaissance. Each of these jobs offer not only a bonus, but special duty pay based on certification. For example, in Tactical Air Control Party, individuals who hold the Joint Terminal Attack Controller certification get paid a special duty assignment pay of $450 a month on top of their normal base bay and military allowances. The Air Force also offers basic incentive pay for holding Airborne, demolitions, scuba, and free fall certifications. Each adding onto each other that can add up to $300 a month. The Air Force understands that with normal base pay and military allowances most members would not want to try out these rigorous career fields and recruiting and retention would suffer. There is a study however, that the individuals who want to become one of the Special Warfare members have a

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4 better psych profile when they do it because they want to and not because the pay is better. Although individuals may not want to become Special Warfare Airmen, the Air Force does compensate other critically manned career fields as well. For example, the medical field in the Air Force does offer bonuses for specific specialties like, doctors, physician assistants, nurse practitioners, anesthesiologist etc. Those are usual annual bonuses and monthly pay allowances for those individuals to retain them from separating from the Air Force. Discretionary bonuses in the Air Force are completely like the definition. Bonuses are usually determined from time committed to the Air Force. Another good example is the Special Warfare career fields. Bonuses are usually evaluated by the Air Force every two years to keep up with the relevancy of recruiting and retention rates. Bonuses are standard increments based off how critically manned the Air Force establishes that career field. The selective re-enlistment bonus is in increments of one to seven multipliers. That selective re-enlistment bonus is then multiplied by your base pay, multiplied by how many years you will enlist for. The only difference the Air Force makes from normal civilian organization, is that these selective re- enlistment bonuses are written into a contract. These contracts are made because the Air Force works in this fashion. The Air Force also offers job title promotions to individuals whose performance levels exceed their current roles. The Air Force obviously promotes from within and usually promotions are in line with job promotions. For example, a person who is in competition for the “promote now” stratification, already has exceeded Air Force standards and has proven themselves worthy of a job promotion. To set this individual up for success and promotion unit leaders would put that individual in a job position commensurate with the next rank the individual was trying to

5 achieve. This job promotion could eventually lead to a rank promotion which in turn would lead to a monetary increase in pay. As an employee there are many advantages in the United States Air Force’s version of pay-for-performance. Though every individual of the same rank gets paid the same, the Air Force does offer exclusive compensations to those willing to perform in critically manned jobs, obtain the next rank, or obtain certifications. From an employee’s perspective, this would motivate them to try new and difficult tasks to achieve better pay or bonuses. The biggest advantage as an Airmen in the United States Air Force is, whether you wanted to achieve something higher or not you still get paid the normal rate for your rank. It is a big joke between Special Warfare Airmen and conventional Airmen I, that at the end of the day we still get paid the same. Though that has evolved and changed over the years, some Airmen could argue that it isn’t worth the rigorous lifestyle. A disadvantage for employees, however, would be that a pay- for-performance concept already set forth is not fair because at the end of the day they are all military members. This concept could make individuals resentful towards the Air Force and the individuals receiving the extra pay. This would in turn affect recruiting and retention for the Air Force. Another disadvantage would be, if the extra pay were to be shut off due to budget constraints. As with anything in the military, pay can be changed without notice or even withheld as we have seen in the last decade due to budget disagreements by the government. This would be a huge factor for individuals that have already made it into the Special Warfare career fields. This kind of cut would make individuals who are already in question staying in. An extra pay cut like that would also disrupt performance because individuals would question why they are being held to a higher standard.

6 As an employer, the advantages the United States Air Force has with these concepts of compensation is that they continually have a recruiting pool. Individuals from all over the nation and within the Air Force sign the dotted line to come and try out to become an Air Force Special Warfare Airmen. The United States Air Force also exploits these advantages by offering, free college tuition, as well as paid time off. The Air Force just like any other branch of the military gets paid salary so anything extra is advantageous to the individual which further encourages recruitment. A disadvantage the Air Force has, especially with the Special Warfare career fields is that members could only do one enlistment and separate. For example, an individual could complete all the schools, achieve a college degree, and then separate for something more in the civilian sector. With their resume of one the most challenging schools, being in the Air Force, achieving a college degree, and all the certifications their job required, they become a very wanted person in the civilian sector. The United States Air Force has done well in their strategic compensation plan. More and more people every day are joining the Armed Forces for the benefits and compensations that it offers. The United States Air Force has done a particularly good job at advertising, promoting their compensation plan because most people who join, join for their compensations. The Air Force continuously updates their pay compensations based off relevancy to the Air Force. However, the things that will never change are, free tuition, healthcare for the member and dependents, and paid time off. Just with those basic compensations alone who wouldn’t want to join the United States Air Force?

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7 References: Milkovich, G. T., & Wigdor, A. K. (1991). Pay for performance evaluating performance appraisal and merit pay. National Academy Press. Renae F. Broderick, & Anne S. Mavor. (2017). Pay for Performance: Evaluating Performance Appraisal and Merit Pay. National Academies Press. https://doi.org/10.17226/1751 Park, S., & Sturman, M. C. (2016). Evaluating Form and Functionality of Pay-for- Performance Plans: The Relative Incentive and Sorting Effects of Merit Pay, Bonuses, and Long-Term Incentives. Human Resource Management, 55(4), 697–719. https://doi.org/10.1002/hrm.21740 Ritter, G. W., Barnett, J. H., & Guthrie, J. (2013). A straightforward guide to teacher merit pay : encouraging and rewarding schoolwide improvement. Corwin. Veen, A., Bartram, T., & Cooke, F. L. (2021). Potential, challenges and pitfalls of pay-for performance schemes: a narrative review evaluating the merits for the Australian home care sector. Journal of Health Organization and Management, ahead-of-print. https://doi.org/10.1108/JHOM-01-2020-0013

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