Summary: Issues concerning military compensation and manpower policies were discussed. Primary emphasis was placed on the appropriateness of the President's proposed across-the-board pay raises scheduled to take effect in 1981. This issue is interrelated with several other issues addressed by GAO over the past several years including: (1) instituting a military salary system to replace the pay and allowances system; (2) adopting manpower management models tailored to the needs of individual military occupations and structuring military pay on an occupational basis; (3) problems created by requiring the military to manage against year-end personnel strength figures; (4) questions of whether the objective enlisted force composition properly states the services' actual needs to provide the personnel for a cost-effective force; and (5) reforming the retirement system so that it would work for military manpower objectives. Pay is only a part of the problem, and until these management issues are resolved, the military will continue to experience manpower problems regardless of the short-term solutions it tries to apply. In the services, rank is vitally important and should not be dismissed lightly. It is one tradition that gives military organizations cohesiveness. However, it is time for the armed services to face economic reality. They must compete in the job market against industries that are looking for the same kinds of people they are trying to recruit and keep. This will mean that pay raises must increasingly be targeted to meet shortages of people with specific skills. Across-the-board pay raises may also occasionally be needed, but the services need to manage their personnel structure and pay policies on an occupation-by-occupation basis.
