The Single Salary System for Military Personnel: A Review of Existing Practices and Literature

The 13th Quadrennial Review of Military Compensation (QRMC) is considering whether the US military should move from its current regular military compensation (RMC) structure to a single‐salary system (SSS) that would eliminate the basic allowances for housing and subsistence (BAH and BAS) and increase basic pay. In this study, we focus on three questions:

     1. What are the potential advantages and disadvantages to the US military of moving to an SSS in terms of pay transparency and equity, incentives and manpower outcomes, and cost?

     2. How might an SSS be designed to meet objectives, including equity and pay comparability, adequate recruiting and retention, and minimal additional costs to the federal government?

     3. What are some important implementation challenges that the Department of Defense (DOD) will face if it goes forward with an SSS for the military?

To provide insight into these issues, we conducted a literature review on the compensation preferences of servicemembers and civilians, a review of US civilian‐sector compensation practices based on a literature review and subject‐matter expert (SME) discussions, and a review of foreign military compensation practices based on discussions with foreign military compensation experts and a review of policy documents provided by our foreign military SMEs. Taken together, the reviews provide a rich set of information about compensation preferences and US federal civilian, private‐sector, and foreign military compensation systems that can inform decisions about whether and how the US military might move to an SSS. The information gathered suggests some key implications for a move to a military SSS, including the following:

• There is a need for compelling evidence to justify a change to an SSS.
• If DOD decides to go forward with an SSS, it will be important to:

• Assess the advantages and disadvantages of using the General Schedule (GS) system as a model.
• Ensure that the new system is viewed as fair by servicemembers and their families.
• Determine to what extent military pay should be benchmarked to civilian pay for similar occupations.
• Determine whether a salary should include a “military factor” that compensates servicemembers for the unique demands of military service.
• Determine whether “cost containment” implies strict budget neutrality or would allow additional budgetary costs to be offset by additional tax revenues.
• Determine whether and how to structure opt‐out provisions.
• Ensure transparency, effective messaging, and leadership buy‐in in the transition to an SSS.

We also include, as appendixes, the three memoranda that review compensation preferences, civilian compensation systems, and foreign military compensation systems.