The role of the U. S. Naval Reserve is changing. The Secretary of Defense, Melvin Laird, has instructed the military Secretaries, among them the Secretary of the Navy, to recruit and retain, organize, equip, and train National Guard and Reserve Forces for the most advantageous mix to support national strategy and to meet all threats. By Laird’s directive, Reserve Forces are to become the primary source for expansion of the regular forces in all contingencies, and not only for total mobilization. This total force concept is a reversal of previous policy. Whereas Laird favors an increased reliance on the combat and combat-support units of the Guard and Reserve and has directed his top assistants to effect this as rapidly as possible, former Secretary Robert S. McNamara preferred to meet increased force requirements by raising draft calls and by slowing down on the release of active duty personnel. Whether the new policy of Secretary Laird can be implemented successfully depends on how well the Reserve can adapt to this new role. It is argued here that cost-effectiveness analysis, left over from the McNamara days, offers a useful perspective from which to make a determination of how Reserve Forces might best be structured to meet the challenges that lie ahead.
Clearly, Defense Secretary Laird was viewing the Reserve in a cost-effective perspective, along with the regular forces, when he sounded the call for increased emphasis on the Reserve and a concurrent consideration of total forces, active and reserve. He seeks, and so stated in another recent directive, a larger total force for a given budget or the same size force for a lesser budget. This is a cost-effectiveness approach, with or without McNamara.
The McNamara cost-effectiveness emphasis virtually bypassed the Reserve, some would say for the better. Nonetheless, analytical perspectives, based on a cost-effectiveness principle, lead to a number of conclusions, some of which are at variance with traditional viewpoints with respect to the Naval Reserve. However, traditional viewpoints are changing and, as a result of recent evaluations of the Reserve, a number of changes consistent with the framework developed here have been or are being implemented. Other, more far-reaching changes are advanced in the sections that follow.
The Naval Reserve as insurance. The traditional view of Reserve Forces is one of insurance, that is, the security of having a large force ready to be used when and if it is needed. Figure 1 illustrates this basic concept. From a cost-effectiveness standpoint there are two levels of effectiveness to be considered. The first (to the left of the M-Day line) is the level of readiness maintained in peacetime; the second (to the right of M-Day) is a target level of effectiveness that is attained some time after mobilization. Clearly this second level is the most important. In Figure 1, the first level is shown to the left of the point on the horizontal axis labeled M-Day, “M” standing for mobilization, while the second level is to the right of this point. Connecting these two levels of effectiveness is a curve depicting how rapidly the pre M-Day [sic] level of readiness must be increased, following mobilization, in order to reach the desired post-M-Day level in the time allotted. While this target date might be a variable, it is convenient to assume that it is fixed. Although this facilitates the exposition, it is nothing more than a simplifying assumption and any extension of the analysis would look to the effects of varying the target date. This is not necessary, however, to develop the main points of the argument. These center on varying the level of pre-M-Day readiness and trading-off against greater efforts in respect to post-M-Day refresher and update.
Figure 1 shows two levels of pre-M-Day readiness. An obvious consequence of the lower pre-M-Day readiness is that one must go further to reach the target level of post M-Day effectiveness. The ideal Reserve Force would be one that is at all times as close as possible to its post M-Day target level. Yet, while this is the most effective Reserve posture, it is not necessarily the most cost-effective one. There may be more cost-effective methods of obtaining a given level of post-M-Day effectiveness than by raising the level of pre-M-Day effectiveness. Why this is so can be seen by carrying the insurance metaphor a bit further. With insurance, the best buy is the one that has the lowest total premium costs for the largest pay-off in the event the incident being insured against occurs. The same is true for the Reserve. This is shown in Figure 2. The costs necessary to provide a given capability profile (post-M-Day) are shown to the left of the M-Day line, and, while both costs and effectiveness are hypothetical, they illustrate the point. The costs shown to the left are analogous to the principal payments on insurance. In the case of the Naval Reserve, these are the annual peacetime expenditures necessary to provide a given capability profile for post-M-Day. They represent the actual costs associated with a potential effectiveness which may or may not ever be used. And, like insurance premiums, they must be paid regardless of whether the event being insured against occurs.
[Figure 1: graph of “Effectiveness Levels, Pre- and Post-M-Day”]
[Figure 2: graph of “Pre- and Post-M-Day Costs”]
The second component of costs are those associated with actual post M-Day [sic] activity. The important point, however, is that as M-Day may not occur, it may be cheaper to transfer costs from the annual premium category to the post-M-Day category. Despite the obviously higher post-M-Day costs of Case B in Figure 2 (indeed, despite its higher total cost over the time span of interest), Case B may be preferred because it is unlikely that the event being insured against will happen, that is, post-M-Day costs may never be incurred. Put in a formula: Total Costs = Annual costs X number of peacetime years + post M-Day costs X their probability of occurrence. If Reserve planners consciously choose force readiness postures for various portions of the Reserve built around Case B the pre-M-Day cost savings might mean that resources could be shifted to other kinds of insurance, and in this way, for the same total peacetime (premium) outlay, more insurance could be purchased. This is one way of implementing the Laird directive.
Computations such as this require a specification of the probabilities involved, that is, how probable is it that the mobilization will occur. In a rigorous cost-effectiveness analysis of alternative force postures, even the date when the mobilization is likely to occur would need to be specified. Clearly, such specification is not possible and while it would be necessary for a fine tuned analysis, it is argued that this concept even roughly applied provides insights useful in deciding basic questions of Reserve force levels and equipment.
More importantly, it points out an area for future analysis. It is immediately clear that one needs to know the shape of the curves between M-Day and the so-called Target Readiness Day. Unfortunately, at the present time, surprisingly little is known about these curves, either on the effectiveness or the cost sides. Therefore one cannot even roughly determine, for example, whether we should be making rather large cumulative outlays in attempting to maintain some rates at high pre-M-Day levels of readiness, when perhaps a week’s intensive refresher training post-M-Day might enable the same individuals to attain the desired level of proficiency. Some of the deck ratings come to mind here. For these rates, accepting a level of effectiveness like “B” on the Figure might prove to be a more desirable peacetime posture than attempting to achieve higher levels like level A with its attendant costs. Put simply, why have drills for these ratings? The point here is that it may be much better for large numbers of Reservists simply to drop the drill and training duty requirements, with their associated costs, and rely on a quick upgrading if and when it should become necessary. Under such a plan, a portion of the drilling Reservists might concentrate on being trainers, not in peacetime, but should mobilization occur. They would train to be trainers, if you will. Other Reservists would not train at all in peacetime but might simply receive a stipend for undergoing what is called at a later point in this article, the “risk of mobilization.”
For other rates we may be laying out money in vain without achieving even marginally improved effectiveness in peacetime in the event of mobilization. For example, fire control, and missile ratings. Technology in the regular Navy may advance too rapidly and simply pass the career Reservist by, regardless of how good his training program is. The money spent on instructors, training devices, and to pay persons in this category to drill may not be a cost-effective outlay. An option here, of course, simply would be not to plan to use Reservists in areas such as this at all, and therefore not maintain their skills or worry about refresher and update.
What is needed as far as Navy planners are concerned is a hard look at the structure of the Reserve Forces, given the concept advanced here. It is clear that, coupled with the look, there would have to be research and experimentation. This is because of the lack of knowledge about the shape of the curve between M-Day and the so-called target level of effectiveness. This is true on both the costs and the effectiveness sides. Yet, if one is to optimize the use of Reserve resources, let alone total Navy resources, these curves should be understood and understood well.
Using Reserve assets. Secretary Laird’s directive clearly envisions more than the use of Reservists in situations of total mobilization, the traditional view. He expects Reservists not only to train for this possibility, but also to be available for active duty for contingency use short of full mobilization. Finally, he expects Reservists to contribute to the total force in a regular peacetime environment. From a cost-effectiveness analysis standpoint, this expanded role leads to a four-way classification scheme for characterizing the use of Reserve assets. Two terms are introduced which are gaining some currency in Reserve circles. These are Contributory use, of which there are two types, and Complementary use, of which there are also two types. The primary difference between Complementary and Contributory is in whether the utilization of the Reservists is clearly contributing to total force activities in peacetime, as distinct from a strict Reserve use that focuses on training for possible call up.
Contributory uses occur in peacetime; the first type fetches total Navy assets on a regularly reoccurring basis. An example of this would be using Reservists to stand the weekend watches in OpCons. This use of Navy Reservists has nothing to do with insurance. It is a separable benefit, just as growing, drawable equity in a life insurance policy is separable from death benefits. Nobody would take out a life insurance policy for the equity draw benefits alone, but such benefits must be considered in computing the annual cost of the insurance. The benefits to the total force are either that fewer regular personnel are needed or perhaps, in a case like that of the OpCon, that having to stand fewer weekend watches will enhance regular retention with all the cost-effectiveness attributes that follow from that phenomenon. The same kind of thinking holds for the second type of Contributory use. This is using Naval Reservists to meet peak rather than regular-recurring requirements. Again, this Contributory use is a peacetime use. For example, special teams in the Reserve might be trained and used for exercise reconstruction. Such a use would not affect how the specific individuals in the reconstruction team might be used in a mobilization; in fact, they might not be involved in mobilization, or if they are, it might be for a different purpose entirely.
Complementary use of the Reserve is the traditional use. Complementary uses are threat-induced. The first such use is that which many persons think of almost to the exclusion of all other roles the Reserve might play. This is the insurance against the day, should it occur, when total mobilization is needed. The second type of Complementary use is one that reflects Secretary Laird’s perspective of programming Reserves for contingency use short of total mobilization. From Laird’s statements and from past experience—often counter to policy—it is clear that some Reservists can expect to be called to active duty where there is less than full mobilization. Now that the policy is clear, it is incumbent on Reserve planners to structure the force so as to be able to meet contingency-oriented, threat-induced requirements. One example of a need that might be met by Reserves is the augumentation [sic] of OpCon centers in contingencies such as the Cuban crisis. Teams trained in setting up and controlling surveillance would have been extremely useful at this time.
Each of the four uses of Reserve assets poses different problems from a cost-effectiveness viewpoint. The first Contributory use of Reservists consists of the explicit programming of certain Reservists to substitute for active duty personnel on an ongoing basis. If it is assumed that the Reservists in question would be paid regardless, then substitution for active duty personnel is an efficient use, unless whatever the reserve would normally be doing with his Reserve time is more valuable to the total force concept. It is argued here that, with the possible exception of hardware units, i.e., those which actually operate ships or aircraft, Contributory use is undoubtedly more beneficial to the total force than what takes place at a typical Reserve unit. From the Reserve standpoint, one might regard this type of Contributory participation as a simple case of moonlighting. Given this perspective, there is no reason to limit participation to one so-called drill-per-week-per-Reservist.
The second Contributory use of Reservists—to meet peacetime peak-loading requirements—is even easier to justify on a cost-effectiveness basis. In a sense, the Navy simply places some personnel on a retainer in order to be able to use them when a requirement occurs. Since the Reserve retainer costs less per unit of time than is the case with active duty personnel, the annual cost is less. This assumes that there are no excess regular personnel available to meet the peak load requirement.
This is often true. In fact, Reservists could also substitute for regulars in staff and intermediate actvities to release regulars for operational use during peak load periods. If Reservists would train themselves to handle this type of activity whenever it occurs, it would free Regulars for other more threat-related tasks.
Complementary usage, i.e., threat-induced usage of Reservists, cannot be planned with the same precision. Threat-induced peak loads cannot be easily predicted, nor can the same environment be counted on even for the same activity as during the peacetime peak load. Special training may be necessary. From a cost-effectiveness standpoint, the use of Reserve assets in this regard is relatively easy to justify. Here again, it must be assumed that regulars are not available to meet the peak load and that the alternative to using Reservists is to pay full year cost for the regulars. Hence, a marginal cost philosophy is applicable.
The other type of Complementary Reserve use is during full-scale mobilization. There is considerable thinking to the effect that under some conditions Reservists could not be called upon in time to have any effect whatsoever, at least in the initial and decisive phases. What conditions would exist after, say, a full-scale nuclear exchange are difficult, if not impossible, to predict. In any case, during full-scale mobilization, Reservists are probably more cost-effective in providing some types of services than others. Optimization would seek to determine which they are and to program reserve assets accordingly. A cost-effective framework within which to consider this optimization has already been discussed.
Mobilization policies. It may be assumed that a total mobilization is less likely to occur than a partial one. But partial mobilization may be viewed as a set of possible contingencies which, if they occur together, represent total mobilization. Viewed in this light, Reserve mobilization policies might be differently conceived. Consider four contingencies with approximately equal requirements as for as numbers of Reserve forces are concerned. Suppose further that the total requirement imposed if all four contingencies occurred simultaneously was 100,000 persons; 25,000 for each contingency. Under this concept, one could develop the best 25,000 Reservists (“best” defines in some appropriate manner such as most recently released from active duty) into a group capable of handling any of the contingencies as long as they occurred one at a time. Therefore, regardless of which contingency occurred first, this “best” group would respond. Only if a second contingency occurred while the first group was occupied would the planner dip into the second 25,000. Presumably they would not be as capable but then presumably there would be less likelihood of a second contingency happening, and hence the risk associated with programming in this manner might be acceptable. The same line of reasoning would hold with regard to the third and fourth 25,000 Reservists. Organizing the Naval Reserve along this line would require some modifications of both the management philosophy and the management system currently in use.
Clearly, the high risk of mobilization for those individuals in the first category of Reservists might be unacceptable to them if they would bear it for a considerable length of time. Thus, rapid turnover might be anticipated. This, in fact, might be cost-effective in that it might be better to encourage turnover rather than attempt to forestall it, incurring retirement and other costs of longevity. It might be better to use these resources to offer incentives that would allow for replacement of less current Reservists with recent releases from active duty.
However, there may be some individuals who prefer participation in the high readiness component and will stay in this group for longer periods of time. Since in general this would probably require high levels of participation in order to maintain the desired levels of currency—greater than 48 drills and two weeks active duty for training—new kinds of Reserve status might be developed bordering on a quasi-regular status. This might be particularly appealing to self-employed individuals and those in education. Alternatively, the quasi-regulars may be regulars who secure early release from active duty in return for an agreement to participate extensively for some period of time, say two years, in the training activities of the high risk mobilization group.
Cost-effectiveness analysis here indicates that two factors must be considered, various degrees of risk and various degrees of use and it suggests yet an additional option open to Reserve planners. This is the use of various types of short-term contracts concerning the time when the Reservist either participates in the Reserve program with a relatively large portion of his time or subjects himself to high risks of potential use. Participation and risk are separate items. The explicit consideration of the risk of utilization recognizes that, to the reservist bent on a civilian career, Reserve affiliation can be hazardous to the successful pursuit of his civilian objectives. Whether he drills or not, he may be more troubled by the risk of being mobilized than by the time spent at drills. Some may participate in a Contributory role, but not want to undergo risk; i.e., the Complementary aspects of service in the Naval Reserve. Others may not be concerned about the risk, but may not wish to invest in participating time.
The acceptance of contracts, some of which might be one time only, would mean the acceptance or even the planning for a rapid turnover of personnel. In terms of numbers, this appears to be feasible, given the current level and turnover in total Navy Forces. However, the implications of an all-volunteer regular force, with presumably lower turnover, are obvious. The supply might simply dry up. Consideration must be given to this possibility prior to the adoption of any short-term affiliation policies on a large scale. At the same time, an all-volunteer force might offer some potential benefits to the Reservists. The all volunteer force is bound to develop structural problems and adapt an “up” or “out” philosophy. “Out,” in this case, might be via the Reserves in the high risk intensive-utilization category.
The point is that the Naval Reserve should have the flexibility to pay for what it wants. It should not be tied to a rigid Mobilization Day pay-off concept of benefits, nor to one possible career option for the Reservist. In all likelihood the Reserve Force of the future will be built around a greater variability, in terms of manning and personnel policies, than we know today. Unfortunately, such variability can work against career incentives, for an orderly progression in the Reserve rank structure, and hence in some measure, could reduce incentives for junior persons to affiliate. Given the high demand for personnel, more specifically, those recently released from active duty and therefore current in Fleet procedures and qualified in current equipment, it is essential that some other forms of incentives be developed. Preferably, there will have to be shorter “pay-off” periods and, if possible, something even more visible than promotion and the prerogatives of higher rank or rate and, in particular, retirement which now make up a considerable portion of the Reserve incentive “package.”
To facilitate the employment of Reserve manpower in any of the four roles developed above, it is clear that purposeful management is necessary. Simple generalizations will not suffice, particularly one that has been in vogue for many years: comparability between Reservists and Regulars. Often overlooked is the fundamental fact that a Reservist is not a Regular. The effort to achieve comparability obscures some essential elements in the analysis of Reserve force postures and, in fact, tends to obstruct the attainment of flexibility in personnel policies needed to man contingency oriented Reserve forces with the most “current” personnel.
In essence, a Reservist is no longer a Regular. In the main, the Reservist is primarily interested in a civilian career, the interruption of which, by Reserve participation and by possible call up, he accepts as the price he pays to retain a Navy identity. There are clearly a number of motives for this acceptance among which are patriotism, identification, money, etc. How the Navy as a whole can optimize on these motivations might better be determined by viewing individual Reservists in terms of the service they offer. A classification scheme for this is developed in the next few paragraphs. Each of the kinds of services described should be considered in evaluating proposed personnel procurement or compensation schemes.
First, a Reservist offers to undergo the risk of mobilization. This willingness to do so is in effect an economic good because, in the absence of legislation, it does not appear that it can be obtained for free in numbers sufficient to meet requirements. Second, a Reservist offers his time to maintain or acquire new skills or knowledge. By so doing he makes himself a desirable candidate for possible mobilization. Third, a Reservist performs useful work. Perhaps the most common example is in the recruiting and screening of new personnel. This is, in effect, a clear-cut example of a Contributory use of Reserve assets. And finally, a Reservist performs certain alumni-type services. These yield indirect or spillover benefits to the Navy. In many cases this consists of public relations activity. It is not clear how to value these services. (Most organizations do not reimburse their alumni club, but rather, collect money from them.)
It might be found that the quest for comparability among Reserves and Regulars—e.g., promotion opportunities, pay, privileges—defeats the purpose of the Reserve program. Tying compensation to rank and longevity as is done now, in fact, probably puts the incentives at the wrong place, that is, where the supply is plentiful rather than where it is sparse. The point to be made here is that the combining of cost-effectiveness analysis with an explicit detailing of the types of services performed by Reservists might make policy makers more receptive to schemes of incentives in which the Reserve pays for services it wants, rather than for the arbitrary factors of rank and longevity, with a day’s drill pay based on regular Navy standards. The genuine interests of the Service and the nation must be overriding; what cost-effectiveness analysis might provide here are ways in which these interests can become the motors for policy.
Proficiency comparison. Another cost-effectiveness perspective that appears to have promise for the development of policies to enhance Reserve effectiveness is the concept of obsolescence of a skill over time. At present, the Reserve spends a great deal of energy and resources encouraging personnel to stay in the reserve for a career. Retention has always been the “Thing.” Yet it might be that there is a clear-cut preference for spending resources to affiliate new entrants, particularly those recently released from active duty, rather than spending the same amount of resources to encourage retention and to maintain the skill levels of those who indeed choose to make a career of the Reserve.
Critical to this analysis are curves of skill level over time for the relevant categories of Reservists (skill obsolescence curves) such as the hypothetical one shown in Figure 3. There are two underlying factors in the obsolescence of skills over time. The first is whether the proficiency is in academic skills or manual skills. While classroom training and testing can increase the former significantly, only work on appropriate types of equipment is likely to slow or reverse the deterioration of manual skills. Presumably, participating as a drilling Reservist slows down the rate of decay of skills over time. Participation also compensates, but generally only in part, for a second element in the decline of Reservist proficiency over time. This element is the changes in Navy skill requirements owing to technological changes and changes in operating procedures within the active Navy. For certain occupational groups, technological changes and procedural changes are more rapid than in others. Hence, the longer certain skill groups are off active duty, the more rapidly their skills decline compared to other, less dynamic occupational groups and the more difficult it is to maintain currency through participation.
[Figure 3: “Hypothetical Skill Obsolescence Curve”]
This simple fact should lead to some sort of classification among Navy skills in respect to the resources required to maintain them through Reserve participation. As mentioned earlier, it may simply be impossible, for example, to maintain the skills of a fire control technician, given the present requirements for participation. To be at all effective in the event of mobilization a fire control technician, if he has been off active duty for some period of time, may have to devote many more man hours to the Reserve than, say, a bosun’s mate. Therefore, fire control men desirous of participating in the Reserve may have to choose a quasiregular time commitment or else they may be of little use if they are mobilized. Alternatively, the Naval Reserve may devote its resources for providing fire control technicians in the event of mobilization exclusively to persons off active duty less than, say, three years even if this means paying them more, paying a bounty for their recruitment and more importantly perhaps even dropping them at the end of the three years or some other time period if one determines that it costs more to maintain their skills than it does to recruit a replacement.
Regardless of the actual shape of the skill obsolescence curve, in general, skills will decline to some extent over time after active duty. Even this simple observation has implications that should not be ignored, observations that, standing alone, question the continued emphasis on retention and “career.” Clearly, efforts to increase Reserve responsiveness by matching manpower characteristics with changing Fleet requirements eventually will lead to a preference for recent releases from active duty rather than those at the starboard end of the distribution curve.
As long as there is a sufficient supply of manpower coming out of the active Navy, cost-effectiveness analysis indicates the desirability of concentrating resources in program design, program administration, and program expenditures on the most “current” personnel available and to accept, even encourage rapid turnover. A programmed rapid turnover, by reducing extensive training requirements, would also mitigate the conflicts that seem to come about between Reserve participation and civilian occupations. Also, if an all-volunteer force should emerge, as some predict, it might still be advantageous to program sufficient personnel into the active Fleet for future Reserve use rather than expend funds in maintaining the skill of so-called career Reservists, skills which in fact may be out-of-date given rapid changes in technology and naval weaponry.
Skill obsolescence raises another question. This is, what is the value of participation as a drilling Reservist relative to a Reservist who agrees, either voluntarily or otherwise, to simply undergo the risk of mobilization, but who does not participate? For many ratings where technological obsolescence occurs rapidly, a person off active duty within the last year, even though he does not affiliate and participate, may be of greater worth than a participating Reservist who has been off active duty for ten years or so. For some rates it may not make sense to continue to pay the annual premiums associated with drill and Active Duty for Training. Either the drills and Active Duty for Training do not help—or are not sufficient—or they are not needed. For other rates it might make sense to drop the drilling requirement but have them perform a month’s Active Duty for Training midway between the Reservists’ release from active duty and the second anniversary of this release, and then drop them from the Reserve entirely at the end of the second year.
Cost-effectiveness analysis would dictate a reordering of resource allocation in cases such as this. To take a total force viewpoint for a moment, the cost of the non-hardware Reservists, those who simply drill at a local Naval Reserve armory rather than being members of Reserve ASW ships or air squadrons, would, over a ten-year period be sufficient to procure and operate a relatively large number of destroyers, either in the Reserve or the active Navy. A closer look seems warranted. Indeed, if Secretary Laird seeks to get the most for a given resource commitment as his recent directives encouraging total force thinking would indicate, such analysis is mandatory.
Other observations concerning Reserve manpower analysis. If cost-effectiveness is going to be applied to the personnel recruiting problem, planners must be willing to carry out its full implications. The current structure of career incentives, rank, higher salary and retirement benefits, seriously conflicts with a structure of incentives based on cost-effectiveness analysis. The old structure clearly militates against the requirement to man the Reserve with the most current personnel, and, to this extent, is uneconomic. For under present compensation schemes, the greater rewards go to those who are least current, i.e., those who, in general, have been separated from active service the longest.
This is true of what might be called the “current” component of Reserve compensation and of what might be called the “future” component as well. The current component consists of pay and allowances and the future component of retirement benefits. As a Reservist completes years of qualifying federal service, the future component, by drawing closer, tends to outweigh the current component (although the latter increases in size as well).
A method suggested by cost-effectiveness analysis, which would give the Naval Reserve greater flexibility in shaping its mobilization component, would be to do away with any future income leaving only a current reimbursement for undergoing the risk of mobilization plus a current component to compensate the Reservist for the work he performs. An individual could draw one and not the other. That is, they could do work but not offer themselves for possible mobilization or vice versa. What is suggested here is that there should be a distinction between what might be called the mobilization function and the training and the rendering of productive services functions. There would be three separate compensation scales, none of which would be tied to comparability with the regular Navy: the first of these to pay individual Reservists for undergoing the risk of mobilization; the second would be to reimburse individuals for their services, that is, for the useful work they do; and the third would be to pay for the training they undergo in the various naval skills. There would be a flexible reimbursement schedule in order to be able to fit the supply of personnel with the proper characteristics to the demands of the services, both for mobilization, for training, and for doing useful work, i.e., contributing to the productivity of the total force in line with the Contributory role described earlier. Thus, in the first instance, three- or five-year contracts between the individuals and the Navy could be executed, in which, in return for a specific sum (possibly payable in yearly increments) the individual would certify his willingness to be mobilized (or at least to undergo the risk of mobilization). Participation might or might not be required. In short, such contracts might not be tied into weekly or monthly drill attendance, although general classes of contracts calling for two weeks AcDuTra per year, 30 days every two years or even longer, could be executed. These, of course, would have a different level of compensation depending on the need for such training to be undertaken in order to upgrade skills and the supply and demand situation.
Under this concept, it might prove to be the case that, when pay is finally adjusted, lieutenants would be paid more than commanders and captains if this is required to fill the mobilization billets with appropriately trained people. Also, ASW ships, mine warfare units, and certain aviation units appear to be those which will be called first in the event of limited escalation of the Cold War; therefore, the mobilization retainer paid for those assigned to a mobilization billet with one of these units should be at a scale higher than for other mobilization billets. Higher pay would compensate the individual concerned for undergoing the higher risks of mobilization. When no distinction of this sort is made it is not surprising that personnel prefer to drill at the local armory in a unit that, at least in their view, has a lower risk of mobilization rather than sign up for the Reserve ASW ship, where they view the risk to be high; clearly the possibility of a differentiation is in order.
Reimbursement for performing productive services could also be adjusted to compensate for responsibility and productivity in the job such as the number of personnel in a division, the number of men recruited in some period of time, the percentage advanced, etc. Given such a flexible compensation scheme, pay could be used as an incentive to improve recruiting and training performance.
The same can be said for rendering productive services of other kinds. Take the Reserve doctor; he gets the same pay for his two weeks of active duty for training, whether he does physicals, a job abhorred by some doctors, or whether, if he is a surgeon, he scrubs and operates for two weeks—really a continuation of his daily activity. He will also get the same pay if he seeks a change of pace by riding a ship or submarine. Finally, if he chooses he can go to a school and improve his skills, a practice that might be more to his own benefit than the Navy’s. Under the scheme advanced here, he probably would be paid more for contributing as a physician than he would for ship riding or going to school. Somewhat facetiously, for a two-week cruise in the Mediterranean lie, and others like him, might be willing to at least sign on for another year of undergoing the risk of mobilization. As an aside, explicit bargaining of this type is perhaps indicated. It might be extremely cost-effective.
Returning to the main argument, what is suggested here is that the Naval Reserve should pay for the billet, that is, the service performed. The billet is a term which comprehends a function, something which can be given a precise value in a cost-effectiveness analysis. For the purposes of compensation, it is suggested here that comparability no longer serves as a useful concept. With a reserve cost-effectiveness scheme such as this, the well-known tendency to “try to get in 20” might be eliminated. The Navy would be given greater flexibility in shaping its mobilization pool to fit its needs and in using the resources at its command in ways that would be better suited to the achievement of a more responsive Reserve Force.
In this regard, it is estimated that the expected retirement costs of the Reserve, counting only those who have not yet qualified, is in the neighborhood of one billion dollars. Discounting this sum at 6% from the year 1996 through 2023, which is the estimated period of years over which the sum will be collected, gives a present value figure of less than 150 million dollars. In rough terms, this represents the amount that, if paid out today in compensation for retirement credits already earned, would approximately equal the eventual cost of Reserve retirement pay for this group of individuals. Dividing this by 50,000, which is approximately the number of cadre Reservists, both officer and enlisted, results in a figure of less than $3,000 per person. It might be worthwhile to buy out of the present scheme.
Summary. Each section of this paper has attempted to advance—from the viewpoint of cost-effectiveness—concepts which, if adopted, might enhance the effectiveness of the Reserve force. In the main the perspective offered differs, sometimes in small ways but more often in significant measure, from how the Naval Reserve has traditionally done business. This reflects the fact that the concept of the Reserve itself is changing. As Admiral Zumwalt said in a recent message to all commands,
“Any view that the Naval Reserve will be useful only on and after Mobilization Day is archaic.”
The Ready Reserve, he said, represents not only fleet trained manpower, but a wealth of expertise which cannot be purchased.
“These resources must be productively used, not only for contingencies, but as an integral part of the total force now.”
The suggestions advanced here along with recent changes in the Naval Reserve are designed to hasten the day when this becomes a reality.
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Commander Abert graduated in 1954 with a Mechanical Engineering degree from the University of South Carolina. An NROTC Regular Program student, he later served as Assistant Professor of Naval Science at the University of North Carolina. During six years of active duty, Commander Abert served in the USS Midway (CVA-41), USS Boston (CAG-1), and USS Sabalo (SS-301). He resigned from the Navy to accept a Woodrow Wilson Fellowship at Duke University where he obtained his Ph.D. in Economics in 1966. His dissertation “Economic Policy and Planning in the Netherlands" was published by Yale University Press. Reserve participation has included Surface Divisions in Winston Salem, N.C., and Raleigh, N.C., and the Submarine Division in Washington, D.C. He is presently Operations Officer of ASW Systems Analysis Division, NARTU, Washington, D.C. He is employed as Director of Research, National Center for Resource Recovery, Inc., Washington, D.C.