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SIMULATION-BASED ANALYSIS AND OPTIMIZATION OF THE UNITED STATES ARMY PERFORMANCE APPRAISAL SYSTEM Lee A. Evans April 13, 2018 From 2010 to 2016, the total number of active duty United States Army personnel decreased by over 17%. The Department of Defense uses a variety of instruments to downsize the services, of which the most immediate and impactful is through decreased promotion rates. The Defense Officer Personnel Management Act of 1980 mandates the termination of officers twice not selected for promotion. As such, the promotion rates to the rank of lieutenant colonel (LTC) for 2015 and 2016 were the lowest over the past two decades. Central to each promotion board is the analysis of officer evaluation reports (OERs), the military version of performance appraisals. The biases associated with evaluating employees are well documented, particularly in management literature. These biases can often create a disconnect between the actual performance level of an employee and the management’s perception of the employee’s performance level. The performance appraisal system in the United States Army is a forced distribution system that restricts the number of above average evaluations raters are allowed to give subordinates. This structure, combined with human behavior and system dynamics, creates an additional bias not currently addressed in literature.

Simulation-based analysis and optimization of the United States Army performance appraisal system.