The ambitious effort to overhaul the military personnel system that is under way inside the Pentagon could lead to huge changes in the way troops are paid, including the creation of unique pay tables for high-demand career fields and new cash bonuses for high-performing troops, according to several defense officials.
The reform effort is nearing its final phase as top defense officials in early August began distributing draft copies of a massive report to the four services for their review, several defense officials told Military Times.
The report, which runs more than 300 pages, includes dozens of recommendations on ways to modernize how the military recruits, retains and manages its people. The effort is spearheaded by acting Undersecretary of Defense for Personnel and Readiness Brad Carson, who has vowed to seek "revolutionary change" and create a military personnel system that emphasizes talent rather than seniority.
The most controversial elements may be a set of three proposals that would directly affect the size of military paychecks and bonuses.
One proposal calls for adopting new pay tables for specific, high-demand military occupational specialties. The aim is to better compete with the lucrative opportunities in the civilian sector that are available to some highly skilled troops in fields like cybersecurity, according to a senior defense official familiar with the draft report.
Another recommended change to the pay system would offer lump-sum retention bonuses or merit bonuses to individual troops whom senior military leaders identify as top performers, the defense official said. That would make the military pay system more closely resemble the private sector and mark a significant change from the current military compensation system where it's almost impossible to target financial incentives to individuals.
A third proposal aims to give the services new flexibility to realign the timing of standard pay raises and promotions to track with individuals' decision points for retention.
The new report suggests today's system is not maximizing its retention incentive power, the senior defense official said.
For example, today's junior officers and junior enlisted members get significant initial promotions and pay increases long before complete their initial service agreements and face any decisions about whether to stay or leave the military.
The services could potentially improve retention among the best and brightest by offering pay raises and promotions to the troops who are deciding whether to stay in the military.
Taken together, the proposed changes could replace the military's highly predictable, across-the-board compensation system with something far more varied and complex — which could be a jarring change for the rank-and-file force.
"Culturally, this will be one of the more difficult things for the services to acclimate to," the senior defense official acknowledged. "Each of the services value an esprit de corps and unit cohesion and we are deeply cognizant that there may be some unintended consequences to this."
Implementation plans likely would involve a lot of service-level autonomy and pilot programs that limit the extent and pace of the initial change.
"In our zeal to be innovative, we don't want to break the system," the defense official said.
Any significant change to the traditional pay tables or other aspects of the compensation system would require approval from Congress to change federal law.
Other recommendations for reform include scaling back or ending "up-or-out" rules and joint billet requirements that have defined career paths for generations.
The goal there is to reduce the rigidity of today's personnel system and create more leeway for officers to pursue individualized career tracks or even take time off in the civilian sector before returning to active duty and resuming a military career.
Those changes likely would require asking Congress to authorize changes to two key Cold War-era laws: the Defense Officer Personnel Management Act of 1980, known as DOPMA, and the Goldwater-Nichols Act of 1986, a defense official said.
In a July 31 memo about the Force of the Future review, Carson said the Pentagon will coordinate feedback from the individual services and provide a final draft of the reform recommendations to Defense Secretary Ash Carter by the end of August.
"We will be well poised to roll out your decisions in mid-September and to begin lobbying (Congress) for the reform proposals you determine are appropriate" to include as part of the White House's federal budget submission for 2017, Carson wrote in his memo to Carter.