An analysis of the retention effect of using lump sum payments for the U.S. Marine Corps selective reenlistment bonus program
By: Ross, David L.
Contributors: Naval Postgraduate School (U.S.)
Publisher: Naval Postgraduate School; Available from National Technical Information Service
Published: 2000
Place of publication: Monterey, Calif; Springfield, Va
Language: eng
Number of pages: 82
Description: This thesis examines the estimated effects on enlisted retention in the Marine Corps of changing the Selective Reenlistment Bonus (SRB) payment method to lump sum. The thesis surveys the literature on personal discount rates (PDR) and on models of enlisted retention. The thesis analyzes the potential effect of the payment method on retention of Zone A eligible personnel using a range of PDRs and retention elasticities estimated by the Center for Naval Analyses. The NPV of a lump sum payment was compared to that of the current payment method using the actual SRB multiples for each USMC Occupational Field. The results indicate Zone A first-term Marine retention will increase between 6. 8 percent and 11.7 percent if the SRB payment were made in lump sum. The effect of switching to a lump sum payment was also analyzed using the Annualized Cost of Leaving (ACOL) model. The ACOL model estimates reinforced the estimates predicted by this thesis. Finally, a Monte Carlo simulation was run in Microsoft Excel to estimate the probabilities of attaining a given number of Marines across all Occupational Fields. The Monte Carlo simulation runs show an increased probability of obtaining a given number of first-term Marines by changing the SRB payment method to lump sum.
Notes: Thesis advisor(s): Mehay, Stephen L. ; Warner, John T.

"March 2000."

Thesis (M.S. in Management) Naval Postgraduate School, March 2000.

Includes bibliographical references (p. 77-79)

Approved for public release, distribution unlimited.

Also available online.

System requirements: Adobe Acrobat reader.

Mode of access: World Wide Web.

US Marine Corps (USMC) author.

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