Toward Incentives for Military Transformation: A Review of Economic Models of Compensation
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The military must ensure that its compensation system provides flexibility in managing personnel, induces innovatory activities and well-calculated risk-taking, and provides incentives for performance, retention, and skill acquisition. This report analyzes four models of compensation-promotion tournaments, deferred compensation, pay-for-performance mechanisms, and nonmonetary rewards-in the context of military transformation efforts.
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