In mid-2017 the U.S. Navy announced changes in its promotions policy to allow sailors to spend more time in their current rank before being forced out of the navy because of the post-World War II "up or out" policy prevalent throughout the American military. What up or out meant was that if you were not promoted within a certain number of years (of your last promotion), you had to leave. That meant capable, often very capable sailors and officers with jobs that had little opportunity for promotion were often forced to leave because of this rule. Over the last 60 years the military, including the navy, has adapted by retraining many of these veteran and capable NCOs (sergeants and petty officers) for other jobs where there were shortages. But whenever there were major reductions in military personnel it was common for a lot of very competent NCOs and officers to be “up or outed” and the navy want to avoid doing it again.
But sometimes that was not possible and after 2001 this became a major problem for the navy and air force because they were actually downsizing while the army and marines were expanding. The navy now allows sailors more time to find another career field they can train for and get promoted before they are hit with “up or out.” The latest change means junior petty officers (NCOs in ranks E-4, E-5 and E-6) get a break. E-4s can now spend ten years in that rank instead of the current eight before they are forced out. For E-5 it goes from 14 to 16 years and E-6 it goes from 20 to 22 years. The sailors benefitting from this are veterans with records of good performance, especially when it comes to supervising other sailors.
Since 2003 the U.S. Navy has been seeking other solutions to this problem, especially at a time downsizing and changing technology. Early on in this process the navy knew it was forcing out veteran sailors and officers and eventually that was recognized as a serious problem. According to the feedback the navy was getting, the system was not always getting rid of the worst performers, or retaining the true keepers. At first the navy responded by adding more screening (to make sure the right people got to stay) and more warning (so excellent sailors in overmanned job areas could decide whether they wanted to retrain for a more-in-demand job, or just leave). At the same time the navy was also raising its standards for new sailors and officers. In short, it's been more difficult to get into the navy, and to stay in. But for over a decade the emphasis has been on more accurately evaluating those who should stay long term.
The core program in this initial effort was "Perform To Serve" (PTS). This was instituted in 2003 and keeps evolving. PTS was originally an effort to get rid of people the navy didn't need (not possessing skills still in demand) or want (disciplinary or physical fitness problems). Initially only first term sailors, seeking to reenlist, had to endure PTS, and basically had to reapply for their jobs. After a few years, junior NCOs also had to do so, including those with 10-14 years of service. About 90 percent of those NCOs who applied kept their jobs. But among the other ten percent there were often people worth keeping. The screening system was found to be flawed, and the navy lost another good sailor who was not allowed to reenlist.
The basic cause of the downsizing and PTS is that changing technology has caused shortages in some jobs, surpluses in others and the elimination of many because of automation. The PTS program allows sailors in overmanned jobs to take aptitude tests to see if they qualify for training in another job. Some sailors can't make the cut, and have to leave. Others may score low on the aptitude test, but have excellent leadership skills. Since NCOs don't do a lot of the actual work, the leadership talents are much more important. For a long time the navy was not checking for this.
After 2008 navy began conducting a review of all its senior NCOs (Chief Petty Officers with 20 or more years of service). Initially about 97 percent were judged fit to continue serving, leaving about 150 a year forced to retire. But the army, with twice as many senior NCOs, only forced 30-40 a year while using a similar program. The navy believed that the main reason for this was the fact that, because so many army NCOs have been in combat in the last decade, and under a lot of stress, the ones who were not up to the job had already left, and some questionable sergeants still in service were cut some slack.
The navy was different from the army in other ways. While officers command the navy, and the ships, it's the "Chiefs" who run the navy where the work is actually done. Those chiefs with over twenty years’ service (and thus eligible for retirement at half pay) are considered the most essential. But it was always known that some of these senior chiefs were just coasting, and not living up to their responsibilities. Thus review boards were established to measure the performance, over five years, of all the most senior chiefs. Anyone with disciplinary problems, or low performance evaluations, would be in danger of not being "continued" (allowed to reenlist). Eventually chiefs who don't make the cut were forced into retirement immediately. Retirement can cost some chiefs a lot of money, because those with less than 30 years’ service, will lose out on the 75 percent pay you get when you retire at 30 or more years. You get half pay if you leave after 20 years. The navy did not set any quotas for how many chiefs to boot, they just wanted the low performers gone.
Aside from wanting to improve the quality of the senior NCO force, the additional retirements make it possible for more qualified chiefs to get promoted, and for junior NCOs to become chiefs. Because of the recession, more senior chiefs are putting off retirement, and promotions to chief have slowed. The new review of the chiefs also motivates many marginal chiefs to operate more effectively.