Special and incentive (S&I) pays, including bonuses, are a key element of military compensation that vary because of such factors as occupation, assignment, duty type, and location. In this report, the authors develop a strategic framework for the Department of the Air Force (DAF) to help set S&I pays in a coordinated, comprehensive manner while aligning them with other pays and the DAF's talent-management goals.

A Framework for Setting Special and Incentive Pays in the Department of the Air Force

Motivation, Development, and Analysis to Support the Framework

Beth J. Asch, Patricia K. Tong, Avery Calkins, Rachel Nesbit, Patricia Mulcahy, Gina Oliver, Zhan Okuda-Lim, Perry Firoz, Amy Mahler

ResearchPublished Sep 30, 2025

Cover: A Framework for Setting Special and Incentive Pays in the Department of the Air Force
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Special and incentive (S&I) pays, including bonuses, are a key element of military compensation that vary because of such factors as occupation, assignment, duty type, and location. The Department of the Air Force (DAF) requested that RAND Project AIR FORCE develop a strategic compensation framework for S&I pays. The framework's purpose is to ensure that these pays achieve their intended purposes and that the DAF uses them in a coordinated, comprehensive manner while recognizing their interrelationship with other pays and aligning them with the U.S. Air Force's (USAF's) and U.S. Space Force's (USSF's) talent-management goals.

The authors reviewed existing statutes, policy documents, and literature related to military compensation; convened a panel of experts to identify strategic objectives, key features, and necessary data and models for the framework; and held, discussions with subject-matter experts (SMEs) involved with setting S&I pays from the DAF, USAF, USSF, and Office of the Secretary of Defense.

The authors demonstrate the framework's effectiveness by applying it to one of the DAF's widely used incentive pays: selective retention bonuses. Because the framework highlights the importance of estimating how changes to S&I pays affect desired outcomes, the authors also developed models to estimate the effects of the Assignment Incentive Pay (AIP), which is a pay designed to encourage members to volunteer for difficult-to-fill or less desirable assignments, locations, or units.

Key Findings

  • SMEs primarily viewed S&I pays as tools for addressing recruitment and retention challenges, although SMEs also said that pays, except for bonuses, were not often "turned off or changed."
  • SMEs did not link pays to broader military pay and compensation goals, which include supporting manpower policies and force management, providing flexibility to changes in manpower supply and demand, motivating personnel productivity and performance, and achieving compensation objectives in the most cost-effective way.
  • SMEs reported a lack of data and analytic tools to evaluate the effectiveness of the S&I pays policy, highlighting a gap between the research being conducted and practitioners' access to study results.
  • SMEs described a lack of coordination in setting S&I pays among different DAF fields and components. SMEs were familiar with specific pays in their career fields but were less informed about pays for others, which affected pay-setting coordination.
  • SMEs reported that DAF service members often perceive S&I pays as entitlements, which might inhibit the DAF from reducing pays or turning them off.
  • The authors developed a framework for setting S&I pays built on three key elements that data, models, and analysis support: identifying the purpose of the pay and determining if it should be added, adjusted, or removed; addressing the decisionmaking process, which includes eligibility criteria and potential, more-efficient alternatives; and examining how the pay coordinates with other DAF pays a service member might receive in their career.

Recommendations

  • The DAF should apply the framework the authors created, which lays the foundation for a defensible, evidence-based, and cost-effective approach for setting S&I pays that support the DAF's readiness requirements and are tied to the DAF's talent-management objectives.
  • The DAF should develop an implementation plan that designates its organizations with the authorities to oversee and coordinate the responses to the framework's questions. To address these questions, the organizations should use data, models, and analytic tools that support decisionmaking.
  • The DAF should invest in collecting, maintaining, and processing analytic datasets and surveys, and creating standing arrangements to produce the analytic models and tools required to support decisionmaking.

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Asch, Beth J., Patricia K. Tong, Avery Calkins, Rachel Nesbit, Patricia Mulcahy, Gina Oliver, Zhan Okuda-Lim, Perry Firoz, and Amy Mahler, A Framework for Setting Special and Incentive Pays in the Department of the Air Force: Motivation, Development, and Analysis to Support the Framework. Santa Monica, CA: RAND Corporation, 2025. https://www.rand.org/pubs/research_reports/RRA3172-1.html.
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The research reported here was commissioned by the Assistant Secretary of the Air Force, Force Management Integration and conducted within the Workforce, Development, and Health Program of RAND Project AIR FORCE (PAF).

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