U.S. Office of Personnel Management
Office of Merit Systems Oversight and Effectiveness






                        TABLE OF CONTENTS

 
   I.     Executive Summary. . . . . . . . . . . . . . . . . . .1

  II.     Introduction . . . . . . . . . . . . . . . . . . . . .5

 III.     Study Results. . . . . . . . . . . . . . . . . . . . .9

     A.   Expected Outcome 1 . . . . . . . . . . . . . . . . . .9

     B.   Expected Outcome 2 . . . . . . . . . . . . . . . . . 19

     C.   Expected Outcome 3 . . . . . . . . . . . . . . . . . 25

     D.   Expected Outcome 4 . . . . . . . . . . . . . . . . . 28

     E.   Expected Outcome 5 . . . . . . . . . . . . . . . . . 34
                      I.  EXECUTIVE SUMMARY

This study provides information on how a cross section of federal agencies planned and
carried out the downsizing process during the period 1994 through 1996 and what results
were achieved in terms of impact on the workforce, the organization, and the mission.  This
information is being shared with appropriate stakeholders so that future downsizing activities
can benefit from the experience of previous downsizing efforts.

In a September 11, 1993 White House Memorandum on Streamlining, the President set an
initial goal to reduce the Executive Branch civilian workforce by 100,000.  This was later
increased to 252,000 by a National Performance Review (NPR) report released in September
1993, and further increased by Congress and the Administration to 272,900 in March 1994. 
These cuts were incorporated into Public Law 103-226.  The President encouraged agencies
to take positive planned actions to reduce the workforce and to use reduction in force as a last
resort.  The requirement within the federal government to downsize yet minimize involuntary
separations is an important part of the President's initiative.  Equally important is the need to
improve mission results while establishing agency practices that conform with existing laws
and regulations and support the merit system principles to assure that employees receive fair
and equitable treatment and that the workforce is used efficiently and effectively.  When these
merit system principles are observed in downsizing, results should reflect five expected
outcomes.  In summary, our findings on each of these expected outcomes follow.

EXPECTED OUTCOMES

Agencies plan strategically to achieve budget and staff reductions in the most effective
manner for both the workforce and the organization.

     Budget reductions, and in some instances base closures, drove most agency
     downsizing decisions.  The majority of installations in our sample took an across the
     board approach to downsizing rather than using strategic measures that would have
     required more time to execute than the short term budget targets allowed.  Some
     agencies were more successful than others in achieving a balance between immediate
     budget objectives and the longer term reinvention goals of the National Partnership for
     Reinventing Government (formerly known as NPR).

     Agencies were able to achieve sizable cuts in their workforce without resorting to
     massive reductions in force by using a variety of available tools.  Agencies reported
     that the use of buyouts and early retirement were the most successful tools to
     downsize while minimizing adverse impact on the workforce and mission
     accomplishment.

     Employees remain uncertain of their future and where they fit in the strategic vision of
     the downsized organization.  Continuing two way communication is needed in the
     post-downsizing environment to make sure the workforce understands and supports
     the agency's strategic direction.

     Communication was an important initiative at each downsizing site we visited. 
     Agencies used a variety of techniques, including the use of newer tools such as E-mail
     and the internet.  Agencies generally lacked a feedback mechanism to evaluate the
     effectiveness of their communication.  Not only do agencies need to communicate
     early and often, but they also need to continually assess how the information is
     perceived and interpreted by the workforce.

Strategies are employed to help surplus employees find other jobs.

     Agencies had effective programs in place to help surplus employees find other jobs
     both within the federal government and in the private sector.  Several examples are
     highlighted in the body of the report.  Geographic mobility is a key factor for surplus
     employees seeking to remain in the federal Service.  Although installations provided
     surplus employees assistance to deal with the emotional trauma of career transition,
     many employees did not view the agency efforts as extensive or beneficial.

     Agencies have implemented governmentwide and agency-specific priority placement
     programs, and, by a rate of two to one, employees surveyed believed that existing
     regulations facilitated the placement of surplus employees.  More stringent priority
     placement methods are not needed at this time.

Affected employees are properly and effectively transitioned into new assignments or
organizations.

     Few agencies in our sample initiated specific measures to help workers fit in when
     placed in a new position within the organization.  In many cases, survivors were
     transitioned into positions within proximity of their old positions or within the same
     organization.  Most managers and supervisors surveyed did not recognize the need for
     any special assistance after they were placed.  Positive benefits resulted in those study
     sites which did provide special efforts to make survivors feel welcome and fit in.

Mission accomplishment and customer service are enhanced through improved utilization of
available resources.

     The study results confirm that agencies have been highly successful in achieving FTE
     reductions across the federal government.  Agency efforts to empower employees,
     reinvent work processes, and improve customer service are a continuing work in
     progress.  However, the study results reveal that employees have reservations that the
     intended benefits have been achieved.  This feedback reinforces the need for agencies
     to continue to communicate the nexus between streamlining actions and results in cost
     savings, operational improvements, and better customer service.

     Strategic mission planning will become even more critical to mission accomplishment
     and customer service in downsized organizations.  The principal methods by which
     agencies surveyed expect to continue to meet mission requirements with a smaller
     workforce are, in priority order, streamlining, reinvented work practices, and
     reorganizations/consolidations. 

     When management and employees work together cooperatively to get through the
     difficult process of downsizing, prospects for positive outcomes are much greater.  A
     majority of the installations surveyed indicated that labor and management either
     coordinated or jointly participated in the downsizing process.  Even in cases where
     limited activity was reported, they shared information.  Generally, managers and
     supervisors reported that informal or formal labor management partnerships made a
     positive difference in agency efficiency and worker satisfaction during downsizing.

Agency policies and practices for downsizing are consistent with Office of Personnel
Management rules and regulations.

     Agency policies and practices are in compliance with rules and regulations designed to
     protect employee interests and rights associated with the downsizing process.

     Employee performance is taken into account in the reduction-in-force process;
     however, employees are concerned that ratings are inflated to enhance retention
     standing.  They also question the fairness of the performance appraisal system overall.

     The number of grievances and appeals is small in comparison to the amount of
     downsizing in the surveyed installations, and most are determined by the reviewing
     authority to lack merit.

     Agency success in achieving workforce reductions, while minimizing the need for
     reduction in force (RIF), prevented disproportionate impact on women and minorities
     in the federal workforce.  The percentage of both minorities and women in the
          workforce increased slightly during the period of the study.                       II.  INTRODUCTION

The U.S. Office of Personnel Management (OPM) is required by title 5, U.S.C., Section 1104
to carry out an oversight program.  The purpose of this program is to ensure that agencies
exercise their delegated personnel authorities in accordance with Merit System Principles
(MSP's) and the applicable laws and regulations that support these principles.  These MSPs
provide a set of values for making human resource management (HRM) decisions, and if
followed, result in predictable outcomes. 

OPM's review of downsizing for fiscal years 1994 through 1996 was conducted in two phases
from June to October 1997.   Phase I of the study was conducted between June 9, 1997 and
August 13, 1997.  Phase 1 included distribution of Human Resource Offices  (HROs) surveys
and questionnaires.  Onsite visits to 15 HROs was the central point of the second phase of the
study which was conducted between September 3, 1997 and 
October 31, 1997.

ENVIRONMENT

On September 7, 1993, Vice President Gore sent to the President a letter with the initial 6-month study which now encompasses the basis for the NPR.  Within that letter, the Vice
President outlined a long-term commitment to change; a vision of a government that works
for people, cleared of useless bureaucracy and waste, and freed from red tape and senseless
rules.  The President embraced this initiative, stating:

    "Our goal is to make the entire federal government both less expensive and more
    efficient, and to change the culture of our national bureaucracy away from complacency
    and entitlement toward initiative and empowerment. We intend to redesign, to reinvent,
    to reinvigorate the entire national government." 
    
                                           President Bill Clinton
               Remarks announcing the National Performance Review
                                                    March 3, 1993

President Clinton's mandate to create a government that works better and costs less provided
agencies with new direction - to decrease the cost of their workforce.  As part of the
revolution to improve government, agencies were also challenged to set customer service
standards that provide the highest quality service possible to the American people; to
empower employees to make decisions; to aggressively seek ways to not only produce more
efficiency within the agency, but also be more effective; and to streamline organizations and
reduce administrative control positions.

Streamlining is embedded in the premise of the NPR to provide for a government that costs
less.  However, the concurrent economic, political and military realities are driving agencies to
not only streamline, but to downsize.  This results in the outplacement of employees.

The workforce reductions and budget constraints have tightened the job market within the
federal government.  This, coupled with the downsizing efforts of private industry, makes the
job-hunting process for surplus employees rarely quick or easy.  In a September 12, 1995
Presidential Memorandum, President Clinton directed the heads of departments and agencies
to provide career transition assistance to support employees as they search for other
employment.

EVALUATION PLAN

Agencies that conducted reductions in force (RIF) and agencies that downsized but avoided
RIF were included in the study to ensure a proper balance of both perspectives.  Geographic
dispersion was also a factor to gain insight into specific issues encountered when placing
employees and downsizing at various locations in the United States.

A two-phase approach was used for this study.  The first phase was a dissemination of a
survey document to HROs, asking them to share their experiences with downsizing.  The
HRO survey incorporated questions geared to determining the cause of the downsizing,
strategies used, and impact on employees and the mission.  As an additional part of the first
phase, HROs were asked to distribute questionnaires to their workforce.  The questionnaire
was used to measure effects on the organization and on individuals from downsizing activities
with the focus on trends, successful practices and perceived barriers.

Phase II of the study included onsite visits to 21 installations, including 15 HRO's.  Onsite
activities involved interviews (both individual and focus groups) and limited records review. 
The interviews with HRO staff, nonsupervisory employees, top installation managers, line
supervisors and union representatives followed up on issues identified as a result of phase I
analysis.  The interviews provided an opportunity to clarify and expand on issues and obtain
examples or anecdotal information to illustrate the respective viewpoints.

DATA SOURCES

The Office of Personnel Management (OPM) used a variety of methods and sources to gather
preliminary information for this study.  These included research of OPM Mainframe Systems
such as the Central Personnel Data File (CPDF), Government and agency Internetsites and
Bulletin Board Systems, previously issued OPM, General Accounting Office and Merit
Systems Protection Board reports, and newspapers and business magazines with topical
information.

Phase 1 of the study included a dissemination of surveys to 75 HRO's; 71 or 97 percent of the
surveys were returned.  As part of phase one, 1,170 questionnaires were distributed by the
HROs to a sample of the managers, supervisors and employees within the HRO serviced
population.   The number of questionnaires distributed was determined based on our desire to
gain a nationwide perspective of downsizing/RIF and not an agency specific perspective.  An
agency specific perspective would have required a much larger sample, which would have
been prohibitively expensive.  A total of  551 or 47 percent were returned.

A variety of other sources of information were considered in the report.  These included: A
review of each HRO's headquarters and local policies, interviews (individual and focus
groups), and records review.

Each onsite visit ended with a closing briefing.  The purpose of the study and the fact that the
onsite visit is for the purpose of contributing to a Governmentwide study containing aggregate
data and information was emphasized during each closing briefing.  No installation level
reports were issued.
                  THIS PAGE INTENTIONALLY BLANK                       III.   STUDY RESULTS

MERIT SYSTEM PRINCIPLES

     "All employees... should receive fair and equitable treatment in all aspects of personnel
     management without regard to political affiliation, race, color, religion, national origin,
     sex, marital status, age, or handicapping condition, and with proper regard for their
     privacy and constitutional rights."

                              title 5, U.S.C., section 2301(b)(2)

     "The federal work force should be used efficiently and effectively."

                              title 5, U.S.C., section 2301(b)(5)
EXPECTED OUTCOMES

When an installation complies with the MSPs in RIF and downsizing:

     Agencies plan strategically to achieve budget and staff reductions in the most effective
     manner for both the workforce and the organization.

     Strategies are employed to help surplus employees find other jobs.

     Affected employees are properly and effectively transitioned into new work      assignments or organizations.

     Mission accomplishment and customer service is enhanced through improved
     utilization of available resources.

     Agency policies and practices for downsizing are consistent with OPM rules and
     regulations.

FINDINGS

EXPECTED OUTCOME 1 - Agencies plan strategically to achieve budget and staff
reductions in the most effective manner for both the workforce and the organization.

Conclusion.  Most agencies have been faced with the need to downsize their workforces as
a result of budget reductions.  Due to the exigencies of the budget, agencies generally
resorted to the most expedient manner of downsizing rather than employing morestrategic
measures that would have required more time to execute than the budget allowed.
The mandate of the President and the Congress as expressed in the federal Workforce
Restructuring Act of 1994 was taken seriously by the agencies.  Agencies moved quickly to
downsize to meet budget and full-time equivalent reduction goals.

     In 1994, the beginning period of this study there were 1,836,253 federal employees
     and in 1996, the ending period of this study there were 1,713,982 federal employees. 
     During the 1994-1996 timeframe, the governmentwide federal employee strength was
     reduced by 122,271.  Strength in our study population decreased by 31,545.  Of this
     decrease, 17,911 were Department of Defense (DoD); 13,634 were non-DoD
     employees.

     Urgency to meet staffing levels drove most agency downsizing decisions.  The
     majority of installations took an across-the-board approach to downsizing, with little
     or no regard for the long term impact on the ability to carry out the mission,
     considering such factors as core responsibilities and skills balance.  Of the 21 sites
     visited during the study, 13 indicated budget reductions had the most influence on the
     downsizing approach.  This finding is reinforced by the questionnaire results which
     showed only 27 percent of the workforce agreeing that "The installation's
     downsizing/reduction was well thought out in terms of how employees would be
     impacted" and only 22 percent of the workforce agreeing that "the installation's
     downsizing/reduction was well thought out from the perspective of how the work
     would continue to get done."  Agencies reported that timing was a critical factor in
     determining how "strategic" the downsizing process could be accomplished.  The
     more lead time the agency had, the better they were able to manage the process to
     maximize cost savings and avoid adverse impact on employees.

     The longer term requirements of the HRO apparently were subsumed by the shorter
     term budget reduction targets.  Essentially, there were two initiatives tracking at the
     same time:  the need to reduce the size of government; and the need to reinvent the
     government to put customers first, cut red tape, empower employees to get results,
     and cut back to basics.  Ideally, reinvention would "shape" the future workforce, but
     realistically the immediate dynamics of the budget became an overriding consideration
     for many agencies.

     Still, some agencies were more successful than others in achieving a strategic balance
     between immediate budget objectives and HRO initiatives.  For example:

         Remembering the terrible impact of the RIFs in the early 1980s on the
          workforce and productivity, the Department of Labor (DOL) utilized a
          comprehensive strategy of workforce planning in connection with the
          development of its annual budget submission.  This involved comparing the
          current workforce with that needed to support anticipated HRO mission and
          function changes, analyzing the difference, and planning for actions needed to
          change or modify the workforce with minimal adverse impact, i.e., succession
          planning, retraining staff, targeted recruiting, encouraging attrition where
          needed.

         In OPM, the Director was personally involved in the Redesign Task Force to
          define core mission and skills needed in the streamlined OPM.  OPM's vision,
          values, and core functions were established with the NPR recommendations in
          mind.  All directives were reviewed.  There was more than a 60 percent
          reduction in supervisors.  More emphasis was placed on the team concept
          (some self-directed), employee empowerment and customer service.

     The federal government is obviously much leaner as a consequence of several years of
     downsizing.  The following profile of federal workforce trends tracking several key
     statistical indicators provides further insight on the effects of the downsizing and
     potential future issues for strategic workforce planning.

         Vice President Al Gore's NPR Report on Transforming Organizational
          Structures dated, September 1994 recommended reduction of the costs
          associated with management control structures by one half over a five-year
          period.  The specific groups targeted for reduction are:  personnel
          administrators, budget staff, financial management which includes accountants
          and auditors, and acquisition specialists.

         The nonsupervisory strength of positions in the targeted group in 1994 was
          166,267; in 1996 the total strength was 157,918.  Financial Management and
          Acquisition Specialist positions are targeted for the most reductions; however,
          the results are far from the stated goal for 1999.  Personnel and Budget
          positions are also lagging.  However, several large agencies are actively
          engaged in consolidation efforts that should produce streamlined structures for
          these services in the near future.  Examples include the Department of
          Veterans Affairs (VA), the Department of Army, the Department of Air Force,
          and the Department of Commerce.  The following table depicts the
          governmentwide progress in meeting the targeted reductions for the specified
          positions.


Table 1
                  NATIONAL PERFORMANCE REVIEW 
                      TARGETED REDUCTIONS
                                


TARGET GROUP
NONSUPERVISORY 
STRENGTH
1994             1996
TARGETED
DECREASE
1994 to 1999
ACTUAL
DECREASE
1994 to 1996
ACTUAL 
DECREASE 
1996 to 1997


Personnel Administrators
    29,580          26,595
14,790
2,985
1,305


Budget Staff
    15,180          14,656
7,590
524
209


Financial Management
including Accountants
and Auditors

     57,336         54,665


28,668

2,671

3,130


Acquisition Specialists
    64,171          62,002
32,085
2,169
2,720


         An analysis of governmentwide workforce trends by PATCO category shows
          where most reductions have occurred in the permanent workforce.  (See table
          below.)   While each category reflects a general decrease, the greatest
          percentage decrease occurred in clerical occupations.  This is not unique to the
          federal government.  With advances in technology producing new labor-saving
          techniques, a large reduction in clerical work is occurring in both the public
          and private sectors.  Many agencies faced with reductions made the conscious
          decision to invest their more limited resources in mission-direct positions.


Table 2
                 GOVERNMENTWIDE WORKFORCE TRENDS


1994
Governmentwide
Strength
(Perms)
1996
Governmentwide
Strength
(Perms)
 PATCO
Category
     1994
Strength by   
Category  
(Perms)
1996
Strength by
Category
(Perms)


     1,836,253       
 1,713,982
Professional
Administrative
Technical
Clerical
Other white collar
Blue collar
     421,745 
      508,277  
      348,197  
      234,469  
        44,114  
    279,331
403,277
504,113
328,831
192,557
  42,950
242,156


         Governmentwide data on the grade level distribution of the federal workforce
          (see table below) reflects that the number of positions GS-11 and below has
          declined.  The most significant decline is at the GS-1 to GS-7 grade range,
          while the number of GS-12 through 15 positions has actually increased slightly. 
          Governmentwide average grade statistics for permanent and temporary
          positions (see Chart 1) reflect a marginal grade level increase over the study
          period which is consistent with the general trend over the past 10 years.


Table 3
               GOVERNMENTWIDE GRADE DISTRIBUTION
                                
                                
                          FISCAL YEAR
                          GS-1 TO GS-7
                         GS-8 TO GS-11
                         GS-12 TO GS-15
                                
                                
                              1994
                            507,419
                            405,293
                            532,893
                                
                                
                              1996
                            450,964
                            380,288
                            533,141
                                
                                
                                
         As part of the initiative to streamline management control structures, the NPR
          established a challenging, governmentwide goal of increasing the supervisory
          span of control to 1-to-15 over the same 5-year period.  For the period 1994 to
          1996, the governmentwide supervisory ratio showed a modest increase in the
          permanent workforce from 1:6.5 to 1:7.4 (See Chart 2).  In actual number,
          more nonsupervisory positions were cut than supervisory positions, but it is
          important to view this data in the proper context.  In 1994, supervisors
          constituted 13% of the total workforce.  However, supervisors accounted for
          35% of the positions eliminated.  Thus, 1 of every 3 permanent positions
          eliminated during 1994-1996 was a supervisory position (43,841 out of
          122,271 positions).  Taking into account the normal supervisor to employee
          ratio, supervisory positions proportionally were downsized twice as much as
          non-supervisors.

     Encouragingly, 53 percent of the managers, supervisors, and employees contacted in
     our study indicated that downsizing or reduction has caused the installation to look at
     new ways to do business.  Initiatives such as the Government Performance and Results
     Act (The Results Act) are driving a more strategic approach to agency mission
     accomplishment, budgeting, and staffing.   This requires a different way of looking at
     the role of the government and how best to carry out government service.  The cited
     trends in the makeup of the federal workforce provide a blueprint for future agency
     efforts to reshape their workforce in the most efficient and effective manner. 

Conclusion. Using a variety of available tools, agencies were able to achieve sizable cuts in
their workforces without resorting to massive RIF.

     In response to the President's 1993 Memorandum on Streamlining, which instructed
     agencies to take positive planned actions to reduce staff and to use RIF as a last resort,
     installations implemented measures which stressed the use of voluntary approaches to
     downsizing, as opposed to involuntary separation approaches.

     The availability of Voluntary Separation Incentive Pay (buyouts) and Voluntary Early
     Retirement Authority were key factors in agencies' ability to downsize while
     minimizing adverse impact on the workforce and continuing to carry out the mission. 
     Human Resource Officers considered the use of buyouts and early retirement as the
     most successful tools to downsize and avoid RIF.

     The following chart reflects the scope of
     agency downsizing in relation to the
     manner in which it was achieved.

         For FYs 1994, 1995, 1996:
          Voluntary Early Retirements
          (VERA) total 57,163; Voluntary
          Separation Incentives (VSIP)
          total 99,079; RIF Separation
          Actions total 26,644.

         The fact that so few RIF actions
          occurred is a strong testament to
          agencies' resolve to downsize in a humane manner.

     In rank order, the following strategies employed by our study participants were rated
     on the criteria of being either highly successful or successful in minimizing downsizing
     impact:


Table 4
                SUCCESSFUL DOWNSIZING STRATEGIES
                                
                                
                              RANK
                            STRATEGY
                           PERCENTAGE
                                
                                
                                1
Buyout
79 


                                2
Early Retirement
72


                                3
Hiring Freeze
42


                                4
Directed Reassignment
34


                                5
Spending Moratorium
30


                                6
Termination of Temps
26


                                7
Change to Lower Grade
25


                                8
Reimbursable Detail
19


                                9
Voluntary LWOP
16


     Although buyouts are commonly thought of as providing the greatest "incentive" for
     employees to leave federal employment voluntarily, it is interesting to note that nearly
     as many agencies reported early out authority as the most helpful tool.  Actions that
     could be taken independent of an external approval authority tended to be rated
     toward the lower end of the spectrum in terms of their success.  However, in the
     totality it appears that the combination of internal management actions coupled with
     the additional flexibility provided through buyouts and early retirement were the keys
     to agencies' overall success.

Conclusion.  Having endured staff reductions, employees are very uncertain of their
future and where they fit in the strategic vision of the downsized organization.  Clarifying
the vision will be key to advancing employee morale and productivity in a post-downsizing
environment.

     Few managers or employees contacted in our survey felt that they are adequately
     involved in agency decision-making on downsizing and the anticipated impact on
     future mission accomplishment.  Consequently, they are uncertain about the future
     direction of the organization and how they will fare as individual employees.  The
     following data highlights the issue.

         Only 33 percent of managers/supervisors responding to the questionnaire
          indicated that their installation involved the employees in the development of
          strategic/operational plans in support of agency mission.  This raises the
          issue of how much of a "stake" they feel they have in the future success of the
          organization.

         Only 27 percent of managers/supervisors responding to the questionnaire
          indicated that they knew where the installation is going and how it will get
          there.  These are people in decision-making occupations who should know
          what is happening.  Rank and file employees responded at even lower levels. 
          Only 18 percent of employees responded affirmatively to this question.

         Only 24 percent of the employees surveyed agreed with the question "I feel my
          future with the installation is certain."  Downsizing obviously has a
          destabilizing effect; however, three of every four employees foresee a possible
          career transition down the road, even though many have survived earlier
          downsizing activity.

     HRM officials felt more strongly that the agency had taken proper steps to define core
     mission and identify needed employee skills in a downsized organization than did
     managers, supervisors, and employees.  In fact, 80 percent of the HROs contacted felt
     that the installation had taken adequate steps to define future expectations.  The
     divergent views of HROs and those outside the personnel arena on this issue are most
     likely attributable to the different perspectives.  Naturally, HRO officials will be
     viewed by the outside workforce as being in the decision-making loop.  Also, the HRO
     function inherently exposes personnel staff to decisions on issues that affect human
     resource outcomes that are not generally shared with the overall workforce.  What this
     finding indicates is the importance of early communication and having as much
     dialogue as possible with the general workforce about what is happening, the reason,
     and the likely short and longer term impacts.  If this does not occur on the front-end, it
     is clearly important in the post-downsizing environment that agencies take the time to
     ensure that the workforce understands the agency's strategic direction.  The failure to
     take such action could exact a heavy toll on employee attitudes, morale, and
     organizational productivity.

Conclusion.  Sound and sustained communications are key to establishing trust and
understanding of downsizing goals and objectives among the workforce.  Application of 
this "lesson learned" can help influence a calmer workforce environment even in the
midst of a downsizing exercise.

     Even under the most positive circumstances, effective communications are difficult to
     establish and maintain.  Finding the right balance is difficult to achieve; and it is
     challenging to get agreement among individuals that communications are sound since
     individual expectations and satisfaction levels often differ.  Although some employees
     will never believe they were sufficiently informed, it is vital on an issue as emotionally
     charged as downsizing that agencies do an extensive job of communicating firsthand
     with the workforce.  This avoids conjecture or misperceptions that damage morale or
     cause unwarranted turnover that may be disruptive to the mission.

     Communication was an important initiative at each downsizing site.  Agencies used
     various techniques to communicate with their workforce, including the use of newer
     tools of communication such as internet and E-mail.  The perception of the quality of
     the communication differed between the HRO staff and the workforce.  A combined
     41 percent of the workforce responded via the questionnaire that the installation was
     good at communicating information; while 83 percent of the HRO survey participants
     indicated that management communicated with employees.  HROs are often the
     communicators of this information so a more favorable assessment on their part is to
     be expected.  Agencies generally lacked a feedback mechanism to evaluate the
     effectiveness of their communication.  Consequently, assumptions were made that the
     workforce was receiving the intended messages, which may have been erroneous.  As
     a case in point, one installation published information using E-mail which was not
     accessible by much of the heavily industrial workforce.

     Most agencies communicated with their workforces through traditional methods such
     as agency newspapers, staff meetings, personnel briefings, and unions.  A few agencies
     used more advanced technologies such as video broadcasts, websites, and local area
     networks to discuss downsizing activities.  The establishment of a bulletin board for
     questions and answers was an innovative approach applied by several sites in providing
     downsizing information to the workforce.  Other approaches that seemed to work well
     were:

         At the U.S. Information Agency (USIA), the goal was "to over communicate." 
          An agencywide "Communications Team" was assembled to serve as
          clearinghouse for informational issuances.

         National Aeronautics and Space Administration (NASA) headquarters made
          wide use of its internet site (http://www.hq.nasa.gov/office/codef/
          workforce/rs97plan) and posted the workforce restructuring plan, buyout data,
          and other agency workforce information for all to access.  In addition, they
          used their internal television network, NASA Select, to transmit information on
          the downsizing/RIF.

         Wright-Patterson Air Force Base (AFB) also reported using a homepage to
          provide information to its employees.  National Oceanic and Atmospheric
          Administration and NASA established "hotline" mailboxes for questions.

         Throughout the period of downsizing, the DOL emphasized  communicating
          with employees and managers via "Town Hall" meetings with the Secretary, all
          employee memoranda, and published guides (RIF primer and a brochure on
          "Managing in Turbulent Times") to assure employees that they were being
          kept informed of the latest information.  In addition, the latest automation
          technology was used to provide information to the workforce on available
          vacancies (DOL Labornet) and other resources which might be of assistance in
          facilitating employee career management (website entitled, Planning Your
          Future - A Federal Employee's Survival Guide).

     Seventy-six percent of the managers/supervisors and 70 percent of the employees
     responding to the questionnaire indicated that they made it a point to keep themselves
     informed about what was happening in the organization in regard to downsizing/RIF. 
     This self-empowerment is quite commendable and may be a byproduct of aspects of
     the career transition process that place a greater amount of responsibility on
     employees to be personally accountable for their destinies.

     Adding to the problem of communications is a general lack of trust in the information
     being disseminated on downsizing.  Only 27 percent of employees stated that they had
     confidence in the information management was providing about the downsizing or
     reduction in force.  Though results were slightly higher, fewer than half (42 percent) of
     surveyed managers themselves expressed confidence in the information being shared
     apparently from some higher level source.  This dynamic is not altogether unexpected. 
     Workforce downsizing typically generates fear and uncertainty, breeding mistrust and
     suspicion despite the most conscientious efforts to deal with the issue in a forthright
     manner.  The lesson to be learned by agencies is not only to communicate early and
     often, but to assess continually how the information is being perceived and interpreted
     by the workforce.  While this is not a guarantee for success, agencies will be able to
     say authoritatively that what they did met reasonable standards.

EXPECTED OUTCOME 2 - Strategies are employed to help surplus employees find
other jobs.

Conclusion.  Agencies have programs in place that are designed to help surplus employees
in making a career transition, although a smaller federal workforce produces fewer
placement opportunities for surplus employees.

     On September 11, 1993, President Clinton issued a memorandum for the Heads of
     Executive Departments and Agencies on Career Transition Assistance for Federal
     Employees.  The President said, "We owe a tremendous debt to federal employees
     who have devoted their careers to public service.  Because many of these employees
     have been or are likely to be separated from federal service as we downsize the
     government, I have directed the heads of departments and agencies to provide career
     transition assistance to support them as they search for other employment.  It's
     important that we provide these services to the people who have made possible such
     dramatic changes in the federal government."  In keeping with the President's
     initiative, federal agencies implemented varied and broad career transition services.

     In the May 30, 1997 First Annual Report on Career Transition Assistance for
     Displaced Federal Employees, the Office of Personnel Management stated, "The net
     effect of the President's program in its first seven months is that: displaced federal
     employees have access to a broad range of services to assist them in finding other
     employment; agencies have become more proactive in helping their surplus employees;
     and more displaced employees are finding new jobs."  Our current study produced
     many examples of constructive agency career transition efforts.  Agencies developed
     pamphlets and brochures, provided workshops, worked with state agencies and hired
     contractors in order to provide affected employees with as much information and as
     many services as possible.  Highlights of significant agency efforts follow: 

         NASA's Kennedy Space Center (KSC), Florida collaborated with the State of
          Florida in an attempt to keep the technical expertise in the geographic area. 
          Florida's main business is tourism, but the State also promotes gaining
          businesses in white collar, technical industries.  NASA personnel skills are
          highly technical and were used as a marketing tool to garner new businesses to
          the geographic area.  This approach with the state was part of the successful
          career transition approach that yielded no involuntary separations by providing
          job opportunities to NASA employees at various corporations throughout the
          state.

         A contractor was hired to develop a book for employees that were affected by
          the Defense depot closure in Memphis, Tennessee.  The book entitled "The
          Planning Companion" provided information on financial planning, investments,
          legal issues, health and wellness, pensions, retirement, federal benefits, and
          other general information.  The loss of a job is one of the most traumatic times
          in an employee's life.  The development of this book was a proactive response
          to the need of employees for information to make informed decisions.

         Wright Patterson AFB's commander established a no RIF policy.  To
          accomplish the downsizing and meet the goal of no RIF, he partnered with all
          the tenant commands to gain their endorsement of the policy which allowed
          sharing of all the available resources of the base.  The placement of surplus
          employees has become an accepted policy for the managers, supervisors, and
          employees at the base resulting in a continuing loyalty of personnel during this
          period of downsizing.

         The Naval Air Warfare Center issued written transition information and also
          varied the publication medium by pursuing training sessions, group meetings,
          one-on-one meetings, and video teleconferencing.  Varying the forms in which
          information is issued increased the likelihood that communication with the
          general population was successful.

         As a result of a base realignment at the Defense Distribution Center in New
          Cumberland, Pennsylvania a number of positions were declared excess.  The
          unions were brought into the process to discuss the potential impact on their
          members and suggested an alternative to RIF for accomplishing the assignment
          of surplus employees under the redesigned structure.  In the procedures
          implemented, employees were permitted to choose positions for placement. 
          RIF retention standing was only applied where more than one employee
          expressed interest in a particular job.  Interestingly, in many cases, employees
          selected a position different from the one they would have been offered in RIF. 
          Although the process was more labor-intensive than implementation of RIF,
          the result was worth the extra efforts.  Employees were more satisfied with the
          results and performed accordingly.  No grievances were filed as a result of this
          process.

         The HRO at Fort McCoy, Wisconsin used RIF Team visits and various forms
          of communication media to inform affected employees of RIF procedures and
          career transition information.  In addition to presenting specific onsite
          downsizing information, which included one-on-one counseling, the HRO staff
          published an employee bulletin with information on RIF processes and
          procedures.  The HRO also issued a Transition Assistance Network package
          that included information on interviewing skills and writing resumes or
          knowledge, skills, and abilities (KSAs) statements; automated job bulletin
          boards; and available outplacement services.

     The growing trend of a federal workforce geographically dispersed from the servicing
     HRO creates an additional challenge for HROs to ensure that career transition services
     are sufficient.  DOL, Department of Army, Defense Logistics Agency, and OPM
     HROs, to name a few, made a concerted effort to provide career transition assistance
     to the offsite workforce.  By using onsite personnel visits, contract services, and
     various forms of communication media such as bulletins, internet, and E-mail, the
     HROs took the additional steps to inform affected employees.  Even with the
     additional effort, employees did not perceive they were getting the same level of
     assistance since the information provided was, at least in part, not face-to-face. 
     Whenever possible, face-to-face contact would appear to help the communications
     process and make employees feel better about the assistance being offered.

     Although agencies are committing a significant degree of time and resources to
     assisting surplus employees, the feedback obtained through the survey questionnaires
     indicates that many employees feel even more should be done.  For example:

         Only 25 percent of employees and 35 percent of managers felt the job
          placement assistance provided to surplus employees was extensive.

         33 percent of employees and 43 percent of managers stated that the job
          placement assistance provided to surplus employees was beneficial.

         21 percent of employees and 24 percent of managers felt that the installation
          implemented effective training to retrain employees for new or changed jobs.  

     It is important to review these responses within the context of the mentality that
     frequently exists in a downsizing environment.  Clearly, agencies have undertaken
     significant steps to minimize traumatic effects upon employees in the process of
     downsizing--this is supported by available data.  However, affected employees
     sometimes have unrealistic expectations of what an agency should be able to do to
     keep them on board or to find them a position equivalent to or better than the one they
     incumber.  During site visits which involved face-to-face interviews with employees,
     they acknowledged, generally, that agencies had taken appropriate measures to assist
     employees.  At only 4 of the 21 sites visited did interviews indicate that more could
     have been done.

     HROs ranked the following services in priority order as being the most successful in
     assisting surplus employees:

     1)   Career counseling
     2)   Priority placement programs:  (Interagency Career Transition Assistance
          Program (ICTAP), Career Transition Assistance Program (CTAP), DoD's
          Priority Placement Program (PPP))
     3)   New skills training
     4)   Waiving qualifications
     5)   Outplacement services
     6)   Reemployment Priority List (RPL)

     Employees agreed that career counseling was the most valuable assistance.  Priority
     placement programs ranked as the next most useful tool.   The ranking of RPLs last
     reflects the fact that this mechanism is used after the employee is displaced from the
     position.  The following table shows RPL hires from FY 1994 through 1996 using
     data from the CPDF.


Table 5
                   REEMPLOYMENT PRIORITY LIST
                                
                                
                          FISCAL YEAR
              TOTAL HIRES: PERMANENT AND TEMPORARY
                                
                                
                            FY 1994
                              917
                                
                                
                            FY 1995
                              840
                                
                                
                            FY 1996
                              828
                                
                                  
     The declining number of RPL placements must be balanced against the overall success
     federal agencies have experienced in downsizing their workforce without resorting to
                            massive RIF.
                                
     In response to the question of whether specific barriers existed to the placement of
           surplus employees, HROs reported the following:
                                
         44 percent identified decreased employment opportunities in the federal
                               government.
                                
         34 percent identified particular physical skills or job qualification requirements.
                                
          19 percent identified the lack of employee mobility.
                                
         3 percent identified the lack of funding for paying relocation expenses.
                                
     Declining job opportunities in the federal government is a consequence of downsizing
     the federal workforce.  However, many agencies reported that employees who were
     mobile were much easier to place than those who were limited to their current
     location.  CTAP, ICTAP, and RPL programs provide selection priority in the local
     commuting area for those persons who cannot be mobile.  While agencies have the
     authority to waive qualifications to place surplus employees, this authority is exercised
     judiciously since it has a direct bearing on future mission success.
                                
     Installations experiencing downsizing are also attempting to provide surplus
     employees assistance to help deal with the emotional trauma that typically occurs with
     such actions.  Nevertheless, many employees do not view agency attempts as extensive
          or beneficial as reflected by the following data.
                                
         61 percent of managers and 49 percent of employees stated that the installation
          provided employees assistance to deal with the emotions of RIF.
                                
         Only 29 percent of managers and 24 percent of employees felt that the
                    assistance provided was extensive.
                                
         41 percent of managers but only 23 percent of employees felt that the
          assistance provided to deal with emotional issues was beneficial.
                                
     Given the intense and traumatic psychological effect of workforce reduction, it is
     predictable that the attitude would exist that agencies should do more to deal with
     employees' emotional issues.  The most obvious relief to removing emotional stress
     would be to avoid downsizing altogether but, obviously, this was not an available
                     option for most agencies. 
                                
Conclusion.  The existing regulatory framework is sufficiently flexible in allowing
agencies to provide placement assistance to surplus employees.  More stringent priority
         placement methods are not needed at this time.
                                
     All of the agencies contacted in the survey had programs to meet established
     regulations for the CTAP, ICTAP, and RPL programs.  Of the 15 personnel offices
     visited, 7 did not have reemployment priority lists because no RIFs had occurred. 
     Agencies have taken measures to inform employees of these programs, and what they
     are designed to accomplish.  Most employees responding to our questionnaire
     reported that they know about priority placement programs.  
                                
     By a rate of 2 to 1, the employees surveyed indicated that existing regulations
     facilitated more than not, the placement of surplus employees.
                                
     HROs view the flexibility inherent under existing regulations as a positive contributor
     to minimizing the adverse impact of downsizing.  These flexibilities include buyouts,
     early retirement authority, grade and pay retention, qualification  waivers and priority
     placement programs.  There were no calls for a governmentwide "stopper list" that
     would mandate the placement of surplus employees.  However, HROs cited practices
     that they felt restricted the placement process.  For example, some DoD HROs felt the
     120 day notice period (applicable to DOD agencies only) for RIF when a significant
     number of employees will be separated should be reduced to 60 days to prevent
     employees from procrastinating in their job searches.  Other DoD HROs felt that 60
     days would be too short.  Downsizing is a difficult business and reconciling the
     sometimes competing interests of various parties is a continuing challenge.

EXPECTED OUTCOME 3 - Affected employees are properly and effectively
transitioned into new assignments or organizations.

Conclusion.  Employees affected by downsizing are frequently placed into new jobs or
organizations without proper training or assistance to help ease the transition.  Few
agencies initiated specific measures to help workers fit in when placed in a new position or
organization.

     The placement of a surplus employee into a new job or organization in the federal
     service is essentially only the beginning of a successful career transition.  Once placed,
     the employee must acclimate to a new employment situation.  Adapting to new
     organizational values, different leadership styles, changed duties and responsibilities,
     or more challenging performance expectations often requires major adjustments by the
     employee and can prove quite stressful.  How effectively agencies plan for and follow
     through in supporting employees undergoing these adjustments will in large measure
     dictate whether it is a success or failure for the employee and the agency.  The survey
     revealed that while agencies are doing a good job of minimizing displacements,
     adequate attention is not being devoted to the next step of ensuring a smooth
     transition of the surplus employee into another federal job.

     Most managers/supervisors surveyed did not recognize that survivors needed any form
     of special support or assistance after they were placed, not even orientation and
     training to assume their new duties and responsibilities.  In most cases, survivors were
     transitioned into positions within proximity of their old positions or within their same
     organization.  This accounted for the feeling by managers/ supervisors that orientation
     and training was not needed.  Slightly less than half of the installations where onsite
     visits were conducted indicated that they provided orientation and/or training to assist
     employees in this situation; apparently few installations assess the need for such
     training.  When asked if the installation had 
     implemented effective training to retrain employees for new or changed jobs only 24
     percent of managers and 21 percent of employees responded affirmatively.  This is an
     area that would benefit from additional agency attention.

     Yet managers/supervisors expressed frustration with having fewer fully trained and
     experienced staff to do the work as a result of downsizing and the inability to use them
     to train newly assigned employees.  Cross-functional teams were used by a few
     agencies as a strategy to deal with skills shortage.  In the technical and trade functions,
     safety was a concern in development of cross-functional teams and was addressed in
     the need for additional training.  Even when modifications and waivers of
     qualifications were used, some agencies did not place a high priority on retraining. 
     Overall, installations which did not implement effective retraining limited the success
     of using qualification waivers to place employees.

     While the surviving workforce feels fortunate to have jobs and employees are strongly
     committed to doing a good job for the organization, some feel that the across-the-board approach taken by many agencies in downsizing caused a diminution of needed
     skills.  This is compounded by the concerns expressed by both managers and rank and
     file employees that they do not have a strong vision of where the agency is headed. 
     The conglomerate message conveyed is uncertainty over organizations' future ability
     to carry out their mission effectively.   This is reflected in the following questionnaire
     feedback.

         Only 13 percent of employees and 23 percent of managers feel that the right
          person is assigned to the right job.

         Only 33 percent of employees and 43 percent of managers feel that the
          restructured installation has communicated its new strategic vision.

         Only 21 percent of employees and 24 percent of managers felt that installations
          implemented effective training to retrain employees for new or changed jobs.

     The study revealed few active agency interventions to address concerns related to
     skills imbalances and training needs.  Only 4 of the 15 HROs visited indicated that
     training is accorded a high priority as a consequence of downsizing and considering
     future mission requirements.  These four installations reported positive results,
     indicating that the placement of a high priority on training does make a positive
     difference in the success of career transition and organizational performance.  For
     example, Tooele Army Depot considered training as a high priority to such an extent
     that it became a condition of employment for the employee.

     Less than half of the installations visited indicated that they planned a specific strategy
     to assist survivors' transition into a new position.  Those that did focused more on
     counseling and Employee Assistance Program (EAP) kinds of assistance, mainly to
     deal with the emotional aspects of survivor transition.  For example, U.S. Geological
     Survey (USGS), Bureau of Indian Affairs, Pearl Harbor Navy Base, and DOL
     provided survivor counseling, stress management and EAP services.  Some
     installations expressed concern with violence at the workplace.  Memphis Defense
     Depot hired a full time social worker to address this issue, and no workplace violence
     occurred throughout the base closure process.

     Only 33 percent of manager/supervisors and employees indicated in their questionnaire
     responses that employees assigned to new positions or organizations as a result of
     downsizing were made to feel welcome.  A few study sites stand out for their
     additional efforts to make survivors feel welcome and fit in.  Two study sites had
     official greeters assigned to welcome new employees and one study site fully equipped
     the desk of newly assigned employees.  Examples:

         NASA and Navy Warfare Center (NWC) provided orientation for newly
          placed employees and assigned "greeters" who gave new arrivals a warm,
          personal welcome.  Pearl Harbor Navy Base and DOL ensured proper
          orientation was given and provided managers and supervisors with a checklist.

         KSC, NWC, and Defense Distribution Central assigned mentors to help newly
          assigned employees get acclimated to their new assignments.

         KSC and OPM used team-building exercises.

     Employees who are surplus or displaced through no fault of their own often are faced
     with the stigma of being labeled as an unwanted commodity.  Most surplus employees
     are talented, high performing employees with valuable skills and abilities.  Federal
     agencies can dispel unwarranted negative perceptions of surplus employees and
     expedite the transition process by undertaking "mentoring" and other novel
     approaches to make the employee a part of the new team.  This constitutes a  win-win" situation for all concerned.

EXPECTED OUTCOME 4 - Mission Accomplishment and Customer Service is
enhanced.

Conclusion.  While downsizing has been effective in achieving immediate budget and staff
reductions, agency efforts to empower employees, reinvent work practices, and improve
customer service are a continuing work in progress.

     The study results confirm that agencies have been highly successful in achieving full-time equivalent reductions in response to the realities of significant budget reductions
     across the federal government.  The question of whether or not these reductions have
     increased agencies' ability to accomplish the mission or enhance customer service
     through improved utilization of available resources elicits a mixed response from the
     federal workforce.

     The ability to deliver agency services with a shrinking workforce and budget is
     fundamental to successful agency operations in today's fiscal environment.  The NPR
     stresses putting customers first, empowering employees, cutting red tape, and getting
     back to basics as techniques for agencies to follow.  Our study reflects that many
     agencies are actively engaged in these processes, institutionalizing changes that are
     intended to result in long term benefits.  Examples:

         OPM identified its core functions, resulting in the privatization of
          governmentwide training and investigations activities.  In privatizing the
          investigations program, OPM established the Federal Government's first
          Employee Stock Ownership Plan.  This initiative has been highly successful,
          resulting in the placement of approximately 700 employees in the investigation
          unit and $15 million in tax-savings to the American people in the first year. 
          Over 5 years, the savings to the Government are projected to total $73.5
          million.

         NASA, KSC focused on customer service enhancement, using contractors to
          assume many functions of the center that previously were performed by career
          federal employees.  Besides reducing costs, NASA reports that employees feel
          a greater sense of empowerment and capacity to accomplish the mission.

         DOL is transforming its mission from one of enforcement to more of a
          customer protection model.  Industry clients are now treated as customers. 
          Instead of DOL dictating standards, some of which industry has contended in
          the past were unreasonable, protection standards are now established with
          industry input and agreement.

         The recommendations set forth by the USGS Geologic Division's National
          Review Committee are in keeping with the objectives set forth by the HRO. 
          By regionalizing, as recommended by the Committee, management of the
          Geologic Division's programs has been placed closer to the users of the
          Division's information and to the scientific staff.  Establishment of teams to
          replace branches accommodates the need to conduct multidisciplinary studies
          and the integration of work with other parts of the agency.  The work has been
          streamlined and/or reinvented, the number of management and supervisory
          positions has been reduced, and through the team structure, employees are
          more involved in determining how mission will be accomplished.

         Wright Patterson AFB reported that alternative work approaches, quality
          management techniques, and work simplification have all played a role in
          fulfilling standing commitments with a reduced force.

         With the integration of the broadcasting of the Voice of America, U.S.
          Information Agency (USIA), International Broadcast Bureau (IBB) reported
          that broadcast overlap with Radio Free Europe and Radio Liberty has been
          eliminated and the efficiency has been improved.  IBB continues to broadcast
          in the same number of languages with fewer employees.

         Department of Energy's Western Area Power Administration (WAPA)
          reported that they had achieved 90 percent of their reorganization goals and
          now have competitive rates with the electric industry.  Decrease in
          construction outlay costs was credited as the highest contributor to this
          accomplishment; staff cost reduction was a distant second.  The construction
          budget had dropped drastically so downsizing simply took care of excesses.

     However, the study results reveal that rank and file employees have reservations that
     the full impact of intended benefits has been achieved.  Managers and supervisors
     more than employees are recognizing the effects of objectives for reinvention of work
     practices and for employee empowerment in their organizations.  This can be
     attributed to the fact that managers and supervisors are closer to the decision-making
     process on matters covered by the initiatives. The following provide additional insight
     regarding workforce perspectives.

         Only 10 percent of employees indicated in their questionnaire responses that
          the downsizing/reduction has produced an organization that is more 

          productive and much better equipped to do its job, i.e., more effective with
          higher quality and lower cost.

         21 percent of employees indicated in their questionnaire responses that
          employees are more empowered to do their jobs.

         USIA managers and supervisors interviewed indicated that the redesigned IBB
          mission has improved products and services, but employees are not as
          convinced, citing that customer service is not as good as it was before
          downsizing.

         NWC, Patuxent River managers and supervisors interviewed felt that
          reorganization has resulted in efficiency gains; supervisory ratios have
          improved and employees feel empowered.  However, employees were more
          reserved, stating that it is difficult to determine at this time if there is any
          improvement.

         WAPA managers said the reorganization has developed a "culture pyramid" to
          promote a vision of a successful, empowered organization.  Employees voiced
          concern over the mission, but said they at least understand the bottom line
          much better.

     Employee feedback reinforces the need for agencies to continue working, even after
     downsizing, to provide the workforce information that will help to establish the nexus
     between the downsizing actions taken and improvements in terms of cost savings,
     operational efficiencies, and customer service enhancements.

Conclusion.  Looking ahead, federal employees foresee that their ability to meet mission
requirements will be impacted as a result of workforce reductions.  Strategic mission
planning will be vital to continue successful agency operations and improved employee
morale.

     The workforce covered by this study conveyed numerous concerns about their
     capacity to continue to carry out the mission having fewer resources, stating it is too
     early to determine if there have been operational efficiencies and cost savings.  Their
     general view is that agencies must be much more strategic in defining organizational
     productivity goals and what it takes to get the job done.  The following data highlight
     these concerns.

         Only 27 percent of managers/supervisors and 31 percent of employees
          indicated in their questionnaire responses that they feel that there are enough
          workers to get the work done.

         An overwhelming 86 percent of managers/supervisors and employees indicated
          in their questionnaire responses that management expects employees to do
          more with less.

         Only 33 percent of managers/supervisors and employees indicated in their
          questionnaire responses that they felt top management analyzed what it wants
          and why in carrying out its downsizing/reduction activity.

         Only 38 percent of managers/supervisors and employees indicated in their
          questionnaire responses that outcome and results measures are used to assess
          the overall performance of the organization (e.g., rates, trends, current quality
          levels, and meeting program objectives).

         Only 36 percent of managers/supervisors and employees indicated in their
          questionnaire responses that they share information and ideas freely with
          management.

     Feedback from the workforce indicates agencies also need to concentrate more on
     identifying customer expectations.

         53 percent of managers/supervisors and employees indicated in their
          questionnaire responses that products, services, and work processes are
          designed to meet customer needs and expectations. 

         Only 42 percent of managers/supervisors and employees indicated in their
          questionnaire responses that customer satisfaction with products and services
          is regularly assessed.  Without having a good sense of what the customer
          thinks about service, agencies lack essential information for setting goals and
          improving processes.

         Only 35 percent of managers/supervisors and employees indicated in their
          questionnaire responses that products and services are continuously improved
          based on what our customers and the public need and want.

     The Results Act will induce agencies to be highly structured in the way that they plan
     their mission, assess outcomes, and measure performance.  The Results Act 

     process should help to educate employees on actions being taken to plan strategically
     for the optimum balance of available resources against mission requirements.

Conclusion.  The principal methods by which agencies expect to continue to meet mission
requirements with a smaller workforce are, in priority order, streamlining, reinvented
work practices, and reorganizations/consolidations.

     Agencies caught in the throes of downsizing employ numerous and varied methods for
     accomplishing the mission with a reduced staff.  HROs ranked the following
     techniques from highest to lowest in terms of their success in meeting mission goals in
     a downsized organization. 

     1)   Streamlining
     2)   Reinventing work practices
     3)   Reorganizations
     4)   Consolidations
     5)   Deregulation
     6)   Employee empowerment
     7)   Reduction of administrative positions
     8)   Delegation of authority

     The top four involve techniques that maximize resource savings along functional
     business lines.  Given the emphasis placed on making government more efficient 
     and effective, and budget reductions, it is natural that these techniques would be
     ranked highest.

     Major agencies are in the midst of activities to review their mission and alignment so
     that they can respond to future challenges presented by smaller government.  DoD is
     embarking on a Defense Reform Initiative resulting in various functions being merged
     or eliminated.  The Department of Housing and Urban Development has reorganized
     and streamlined its field structure.  The Department of Veterans Affairs (VA) is
     shifting its emphasis from inpatient hospital care to a managed care approach which
     focuses on preventive health maintenance and outpatient care.  These are just a few
     examples of how downsizing is requiring that agencies consider new ways to do their
     work.  Seventy-six percent of managers and 62 percent of employees reported that
     downsizing has caused agencies to look at new ways to do business.  Accordingly,
     employees view their involvement in the work as being more challenging than in the
     past.  As agencies streamline their operations and empower employees more to make
     independent decisions, employee involvement and partnerships will obviously be
     critical to bottom line success.

Conclusion.  Whether formal or informal, labor management cooperation is an important
facet of the downsizing process.

     The downsizing process places a great deal of stress on the workforce.  When
     management and employees work together cooperatively to get through this difficult
     process, prospects for positive outcomes are much greater.  

     Many of the study installations engaged the union in a labor-management partnership
     throughout the downsizing process.  Forty-one percent of managers/supervisors and
     employees indicated in their questionnaire responses that the installation's labor-management partnership was involved with the downsizing/reduction at the beginning.

     In our HRO survey, many installations indicated that, while a partnership did not 
     formally exist, this did not adversely impact the level of involvement of labor and
     management on downsizing.  Most installations coordinated because of impact and
     implementation requirements, and others in the spirit of cooperation.


Table 6
PARTNERSHIP ACTIVITY


Type of Activity
Percentage


None or limited (shared Information)
39


Coordinated (union participation/input)
39


Member on Committee (planning, processing, or assisting
with employee communications)

22


     As illustrated above, a majority (61 percent) of the HRO installations indicated that
     labor/management either "coordinated activity or "actively participated" as a partner in
     the downsizing process.  Even in cases where limited activity was reported, at a
     minimum, they were sharing information.  

     While only 27 percent of managers/supervisors and employees indicated in their
     questionnaire responses that there was cooperation between labor and management,
     HRO staff involved with the complexities of processing the downsizing/RIF action
     report a discernable influence of the labor-management partnership on the downsizing
     outcome.  Sixty-three percent of HRO survey respondents indicated that labor-management partnership influenced the downsizing outcome from a marginal to a
     great extent.

     Managers and supervisors interviewed at 15 sites which used informal or formal labor-management partnerships, reported that partnerships did make a positive difference in
     agency efficiency and worker satisfaction in downsizing.  Only two sites indicated that
     the labor-management partnership resulted in adverse impact.  These two sites had
     adversarial labor-management relationships that carried over to bargaining and
     negotiations over the downsizing process.

     The following are positive examples identified in the course of the study:

         KSC managers reported that union involvement helped in the development of
          reorganization plans.  The union, by being knowledgeable about the plans,
          helped the employees in their understanding, thereby keeping the workforce
          calm and more receptive to transitioning to the new organization.

         OPM's labor-management partnership was helpful in downsizing the
          Employment Service. The positive impact from the partnership was particularly
          noticeable in the aftermath of downsizing.  OPM's culture has been greatly
          influenced by the desire of management and the union to achieve common
          goals.

         Barksdale AFB reported that union involvement helped with the transition. 
          The union was involved in the transition from the beginning.  The union was
          cooperative and assisted in communication with employees, which aided the
          smooth implementation of downsizing initiatives.

         At Tooele Army Depot, a union representative was a full member of the RIF
          team.  This effort influenced the positive way in which workers accepted the
          results.  The workers felt the RIF process was done in a fair manner because
          the union participated.
     
     EXPECTED OUTCOME 5 - Agency policies and practices for downsizing are
consistent with The Office of Personnel Management rules and regulations.

Conclusion.  Agency policies and practices adhere to federal rules and regulations
governing the establishment and administration of systems designed to protect employee
interests and rights associated with the downsizing process.

     The study assessed the methodology which the agencies used to develop their policies
     and practices in accomplishing downsizing and/or RIF.  Specifically, OPM examined
     the procedures for:  establishment of competitive areas and competitive 

     levels, development of RIF notification letters, and application of veterans' preference. 
     Following are the results:

         Agency policies comply with rules and regulations for establishment of
          competitive areas and competitive levels.  The HROs visited did not employ
          methods or policies which established excessively narrow competitive levels. 
          [Note: the Office of Personnel Management did not review USGS' competitive
          level or competitive area establishment during the onsite visit since there were
          numerous appeals filed that had not been resolved.]

         No instances were found where the methodology established for development
          of RIF notification letters and application of veterans' preference during
          downsizing and/or RIF breached existing rules and regulations.

     With few exceptions, agencies are complying with rules and regulations governing the
     placement of surplus employees.  For the ICTAP, HROs were aware of the overall
     regulations at all of the sites visited.  However, in most of the offices, the complete
     requirements for ICTAP were not met.  Specifically, HROs were not fully complying
     with the requirement for public notice or the additional qualification and application
     information required in the job announcements for the purpose of notifying ICTAP
     eligibles of job opportunities.  These findings mirror the December 1997 OPM study
     finding that 30 percent of DoD and 52 percent of non-DoD agencies were not in full
     compliance with ICTAP requirements.  OPM is currently assisting agencies in
     correcting these problems.  A six-month follow-up study which began in June 1998
     will assess agency progress in this area.

     Fifty-four percent of the managers and supervisors surveyed by the questionnaire
     reported the impression that proper rules and regulations were followed in the
     downsizing or RIF.  In contrast, only 29 percent of employees agreed this was the
     case.  Though this is a noticeable gap, it is pertinent to point out that there are
     procedures for obtaining "due process" in situations where there are employee
     concerns regarding management actions.

Conclusion.  Employee performance is taken into account as a retention factor in the
reduction in force process; however, employees are concerned that ratings are inflated to
enhance retention standing.

     Regulatory requirements for assigning additional service credit for RIF retention
     standing to successful performers are being applied by federal agencies.  However, 

     employees feel that the service credit is of limited value given the way that agencies
     administer performance management.  A combined total of only 21 percent of the 
     questionnaire respondents indicated that the extra RIF credit for ratings above fully
     successful motivated employees to achieve these levels.  Fairness appears to be a
     major concern.  

     When asked if the performance appraisal system is fair, only 28 percent of
     managers/supervisors and 29 percent of employees responding to the questionnaire
     responded affirmatively.  At 9 of the 21 sites visited, those interviewed indicated
     concern over the appraisal process as it relates to RIF.  The following comments made
     during interviews are reflective of the nature of the concerns: "some supervisors tried
     to protect their employees and rate higher than normal;" "quota system was used for
     outstanding ratings;" "outstandings were given on a rotational basis;" "management
     rated to control RIF;" and "ratings went up when faced with downsizing and become
     artificially inflated."  These reactions are typical of workforce perceptions of the
     Performance Management System in the federal government.  OPM issued new
     performance management regulations in 1995 giving agencies greater flexibility to
     design performance management systems most appropriate to the agency's structure,
     including pass-fail systems.  Only one installation included in the study had actually
     implemented a pass-fail system.  Employees there also indicated a concern about how
     it would be used during RIF.

     Review of information in the CPDF for the study period FY 1994-FY 1996, indicated
     an increase in outstanding ratings, a slight increase in minimally successful ratings, and
     a slight decrease in fully successful ratings of permanent employees.  (See Table 7.) 
     The combined percentage of outstanding and exceeds fully successful ratings granted
     in FY 1994 was 71.4 percent.  This total increased to 72.8 percent in FY 1995 and
     73.2 percent in FY 1996.


Table 7
PERFORMANCE MANAGEMENT


FISCAL
YEAR
PERCENT OF 
PERMANENT
WORKFORCE
ATTAINING
OUTSTANDING
RATING
PERCENT OF 
PERMANENT
WORKFORCE
ATTAINING
EXCEEDS
FULLY
SUCCESSFUL
RATING
PERCENT OF 
PERMANENT
WORKFORCE
ATTAINING
FULLY
SUCCESSFUL
RATING
PERCENT OF 
PERMANENT
WORKFORCE
ATTAINING 
MINIMALLY
SUCCESSFUL
RATING
PERCENT OF 
PERMANENT
WORKFORCE
ATTAINING 
UNSATISFACTORY
RATING


FY 1996
38.3
34.9
19.1
.3
.1


FY 1995
35.6
37.2
19.3
.3
.1


FY 1994
32.5
38.9
21.4
.2
.1

                    Note: percentages of permanent workforce not receiving a rating are not included

     The strongest trend is the increase of ratings at the outstanding level.  KSC offered an
     interesting perspective on ratings.  Top managers indicated that they no longer could
     support a workforce of fully successful employees at this unique and highly technical
     agency.  To meet mission needs, with a drastically reduced staff, they felt the
     workforce must be composed of workers that are willing to go over and above the call
     of duty and exceed the normal job requirements.  The latitude agencies have now to
     develop tailored performance systems allow for this type of judgment; however,
     negative employee perceptions will likely persist until it can be demonstrated through
     outcomes that agency systems are effective in distinguishing among levels of employee
     performance.
Conclusion.  The vast majority of grievances and appeals filed regarding agency
downsizing decisions are determined by the reviewing authority to lack merit.

     In comparison to the
     amount of downsizing
     that occurred in the
     surveyed installations
     between FY 1994-FY
     1996, (31,545 positions)
     the number of
     complaints or grievances
     filed (402) is small. 
     (See Chart 5.)

     The majority of
     complaints stemmed
     from voluntary
     separation incentive
     determinations.  This
     was reported by 18 of the 82 HROs involved in the study.  This was followed by
     complaints citing:  performance appraisal (16); competitive level (14); veterans'
     preference (13); competitive area (11); reemployment priority (7); ICTAP/CTAP (3).

     As reported by the HROs involved in the study, only 2 of the 283 complaints decided
     resulted in a reversal of agency action (1 of every 142 complaints decided). (See
     Chart 6.)

Conclusion. Contrary to earlier belief, downsizing has not adversely affected the
representation of women and minorities in the federal workforce.

     In the early days of downsizing
     there was a great deal of concern
     that staff reductions would have
     a disproportionate impact on
     women and minorities under the
     syndrome of "last hired, first
     fired".  The humane way in
     which downsizing has taken
     place in the federal government
     apparently avoided this situation. 
     The voluntary alternatives
     utilized by agencies had the
     effect of minimizing reductions
     in force which could have
     produced devastating results.  The governmentwide minority population increased
     slightly as shown in Chart 7.  The percentage of females in the workforce also slightly
     increased.  In 1994, 43.6 percent of the workforce were females.  This percentage
     increased in FY 1996 to 43.8 percent, even though the workforce decreased an
     additional 57,761 positions.