Combinatorial Auction Theory Applied to the Selection of Surface Warfare Officer Retention Incentives

Abstract

Abstract : The purpose of this project is to investigate the potential retention and cost impacts of offering combinations of retention base incentives to members of the Surface Warfare Officer (SWO) community. The SWO community has experienced the lowest junior officer retention rate of all Unrestricted Line Officer (URL) communities since the early 1990s. The community is required to maintain at least 275 junior officers annually, in order to fill operational Department Head billets, in support of sustaining maritime mission requirements. Due to numerous community dissatisfiers, however the SWO community has been unable to produce the required force strength of 275 Department Heads Introduction of a monetary bonus was the SWO community's answer to addressing its critical junior officer retention rates. Nonetheless, retention rates are still critically low and are viewed negatively by many junior officers, because the monetary bonus does not address the reasons junior officers are dissatisfied with the community. Several non-monetary incentives have been identified by junior SWOs as possible tools to increase retention rates. This project will build a Combinational Auction Model to include both monetary and non-monetary incentives to determine how combinations of incentives can be used to offer the greatest value to retained officers, at the least cost to the Navy's SWO community.