Abstract : Military personnel evaluation systems are effective at identifying top performers, but struggle to differentiate between average records. Each service has a different approach to evaluation, appropriately reflecting the underlying philosophy and culture of the service. The basic purposes of these evaluation systems break down into two essential themes: to provide information for decisions on promotion, retention, and assignment; and to provide feedback to the individual. The problem common to all of these systems is inflation of ratings, either directly manifested through inaccurately high scores or indirectly through exaggerated language and maladapted processes. While the problem of inflation has been well studied in the fields of organizational behavior and industrial psychology, a simpler approach using economic incentives for behavior can aid understanding. This paper offers three scenarios to explore the dynamics of these behavioral incentives and to manage inflation: a quota system, a pass/fail system, and a rater cost system. Ultimately, the cost approach offers the greatest potential for improving personnel evaluations and making them more useful to the military services.