Paid to Perform: Aligning Total Military Compensation With Talent Management. Volume 8

Abstract : Transforming the U.S. military s personnel management system is critical to long-run American national security interests, particularly as increasingly capable peer adversaries emerge. Talent management the science of creating a higher performing, more productive, and more satisfied workforce is critical to confronting these threats, particularly in an austere fiscal environment. This transformation cannot take place in a vacuum, however. As an extensive body of labor economics literature makes clear, total compensation management is an integral part of talent management. As the military changes the way it accesses, retains, develops, and employs its people, so, too, must it change the ways in which it compensates them. However, the current compensation system, rooted in industrial-era labor management practices, has outlived its usefulness. It is not linked to defined organizational outcomes, rests upon an ineffectual evaluation system, and does little to incentivize performance. Designed to complement an up or out personnel system that treats people as interchangeable parts, it has been rendered obsolete by dramatic changes in the American labor market, fiscal constraints, technological advances, and the changing nature of information age work.