consortiums

PROJECT 6

DISTRIBUTION AND ASSIGNMENT

Mark Van Boening
School of Business Administration
University of Mississippi

Proposed Grant $100,445

Abstract:
Assigning approximately 55,000 Sailors a year requires nearly 300 detailers in the Bureau of Personnel. The detailers and individual Sailors, based on the Navy’s needs and the Sailor’s preferences, negotiate the vast majority of personnel assignments. This “enlisted detailing” mechanism is often time-consuming and

inefficient, i.e., while this process favors the Navy, it contributes to reduced retention rates and vacant billets, particularly in less desirable jobs.

In an effort to increase retention and induce individuals to volunteer for less desirable jobs, the Navy has adopted numerous incentive systems, such as selected reenlistment bonuses and reduced sea-shore rotation. Under the bonus system, a fixed all-or-none bonus is offered to individuals in pre-determined ratings to induce reenlistment. The results have been mixed; highly skilled individuals continue to abandon their Naval careers in favor of the private sector. Further, the Navy may be losing highly skilled Sailors who, while not eligible for a bonus under the existing incentive structure, could have been induced to reenlist if offered a bonus.

In the private sector, employers and employees can also negotiate on various job attributes. These include bonuses, office location, support staff, vacation time and promotions. Many firms use these incentives to compensate employees for negative job characteristics. For example, an employer might offer increased vacation time to compensate an employee for separations from family as a result of work related travel.

A significant body of research has used laboratory markets to test basic theories of supply and demand, resource allocation and profit maximization. In general, previous research has used prices as the means to facilitate market exchange of a hypothetical good. Unlike previous work, the proposed research uses a novel implicit pricing mechanism to efficiently allocate the labor. The objective is to identify a mechanism such that Sailors are efficiently allocated across jobs: placing the right sailor in the right job at the right time.