It is easy to cook up a 1970s-style decline in force quality over the next decade. Start with tightening Defense budgets. Add a series of broken promises to careerists and retirees. Cut cost-of-living adjustments, and delay future retired pay.
“Free” health care disappears for active duty families and retirees. More bases close, straining personnel support services elsewhere. Exchanges and commissaries merge to improve efficiency, but the value of discount shopping falls. Military pay raises continue to lag behind private-sector wage growth.
Externally, the U.S. military’s role changes dramatically, from defender of freedom to a less satisfying status of international policeman. Patriotism as a motivation to serve declines. Demand soars for high-tech skills, both in the military and in private industry, but a failing U.S. education system cannot keep pace. In the ensuing competition for high-quality youth, industry wins. Before Congress reacts, recruit quality and reenlistment rates plummet. A new “hollow” military arrives.
Robert Emmerichs, Executive Director of the Pentagon’s Eighth Quadrennial Review of Military Compensation (QRMC), worries about such scenarios. That’s his job. President Bill Clinton and Defense Secretary William Perry are counting on the QRMC to design a compensation system for the 21st century. So Emmerichs and his 35-member staff are polishing their crystal ball, trying to predict a full range of challenges that might lie ahead. No single compensation system will fit every possible scenario. The key, says Emmerichs, is to begin thinking strategically about pay and benefits. That means anticipating changes ahead in technology, in economics, in world politics, in cultural mores. It means building new flexibility into the pay system so decision makers can adjust quickly when the need arises.
Looking at military pay strategically is especially important today, Emmerichs says, because “the external environment is changing dramatically.” With the stability of the Cold War gone, the military soon might need “to attract, retain, and motivate people in different ways” than the current system allows.
Emmerichs, 50, is an expert on the current maze of pay and allowances, bonuses, and special pays. A former Air Force officer and systems analyst, he served for a decade on the staff of the House Armed Services Committee and gained both credit and blame for masterminding the 1986 restructuring of military retirement. He was Deputy Assistant Secretary of the Army for military personnel management before accepting his appointment to the QRMC.
The current pay system evolved “without a lot of strategic direction to it,” Emmerichs says. Though it clearly works, there may be better alternatives. One possibility, Emmerichs concedes, is a straight salary system. And certainly the QRMC will review the disparity in allowances between single and married members. “Are we an institution or are we an occupation? That’s a fundamental value that needs to be addressed,” he says.
Another question is whether persons who leave service voluntarily short of retirement should receive some pension benefit like that guaranteed to most other American workers. The services have opposed any change that would diminish the pull of 20-year retirement, the key to force management during the Cold War. “But,” says Emmerichs. “earlier vesting might be easier to think about now,” given that “we’ve had early retirement as part of the drawdown package.”
Whatever changes the QRMC recommends, Emmerichs says one will be grandfathering—that is, protecting current members from any drop in compensation. Grandfathering, in fact, makes significant change “more feasible,” he says. “You can move more gradually; you can test out the effectiveness of different ideas.” And if current members like the changes, he continues, “we can move much more rapidly” by offering them a choice between the current package and a new combination of pay and benefits. That’s “as fair a mechanism of transitioning as one can come up with,” Emmerichs concludes.
But the key feature of any new pay system must be flexibility, Emmerichs says. “If we see ourselves moving toward this or that environment, we need to conform our human resources management system so it will work in that environment.”
Emmerich’s staff is developing as many as five detailed scenarios of what the world might look like, with specific goals for a compensation system in each. Next will come a menu of options for accomplishing the goals and, later, a vision of various pay systems, including core principles and values. Building this “intellectual capital” will occupy much of the study group’s time through December.
A final report will be sent to Secretary Perry and President Clinton next June. Emmerichs hopes to see action on the recommendations soon thereafter. “I would argue we have to make some immediate movement” along whatever path the administration selects, he says.
Congress has required a Pentagon study of military compensation every four years since the 1960s. Results have been mixed. Some QRMCs proposed major overhauls that, in the end, merely gathered dust. Others recommended more modest changes that either were ignored or, in time, enacted into law. Emmerichs disputes the notion that quadrennial reviews are generally a flop. “There have been an awful lot of recommendations adopted," he says. Last year, Congress approved cost-of- living allowances for those serving in the continental United States, a monthly payment to persons assigned to high-cost stateside areas. This year, the armed services committees have endorsed a minor reform to Variable Housing Allowances. Both changes were recommended by the 7th QRMC.
The 8th QRMC’s expansive goal will be a “harder nut to crack,” Emmerichs concedes. “This isn’t just a recommendation. . . . This is an outline, a blueprint, that over time needs to manifest itself in action.”
The military is changing faster than at any other time in a half century. It needs, says Emmerichs, a compensation system that can keep pace.