Knowledge that Transforms

Wecompute a sequential equilibrium for the U.S.Army'sTargeted Selective Reenlistment Bonus Program in whichtheArmy offers a bonus, soldiers with a low cost of serving in an undesirable location accept the bonus and are sent to an undesirable location, and soldiers with a high cost of serving in an undesirable location reenlist but decline the bonus.Wefind that this program benefits both theArmy and soldiers, increases retention, increases the number of soldierswho serve in an undesirable location, and better matches soldiers to assignments.We discuss implications of our model on human resource management practices for theArmy in its administration of the bonus program and its application to other large organizations that set wages through a rules‐based mechanism.

We asked two leaders with experience in both military and corporate leadership, Dr. Ervin J. Rokke andWalter F. Ulmer Jr., to describe their perceptions of the differences between these two arenas. Both believe that compared to most corporate entities, the military provides greater opportunities for early leadership, uses participation and feedback to strengthen communications, prioritizes the welfare of subordinates, and emphasizes a foundation of core values.They also note that the transparency of both corporate and military approaches to leadership has led to shared learning and that despite operating in different environments, military and business have much to learn from eachother.