Vice President of the United States

AL GORE

Serving the American Public:

Best Practices in Downsizing

SEPTEMBER 1997

Benchmarking

Study Report
Vice President of the United States

AL GORE

Serving the American Public:

Best Practices in

Downsizing

Benchmarking

Study Report

SEPTEMBER 1997
i

Vice President of the United States

AL GORE

CONTENTS

STUDY PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

SECTION 1: LEADERSHIP STRATEGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

SECTION 2: COMMUNICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 3: ADVANCE PLANNING AND PREPARATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

SECTION 4: EXTERNAL AND INTERNAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SECTION 5: SETTING STRATEGIC DIRECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

SECTION 6: IMPLEMENTATION: TRANSLATING STRATEGIC

DIRECTION INTO ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

SECTION 7: PERFORMANCE EVALUATION AND REPORTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

APPENDICES

A. DOWNSIZING RESOURCES ON THE INTERNET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

B. TRAINING AVAILABLE TO FEDERAL MANAGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

C. GOVERNMENT RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

D. AGENCY CONTACTS AND OTHER SOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
iii

STUDY PARTICIPANTS

BENCHMARKING STUDY PARTNERS

BENCHMARKING STUDY SPONSOR

Bell South

Bethlehem Steel Corporation

Canadian Government

City of Charlotte, North Carolina

Defense Mapping Agency

Delta Air Lines

Department of Energy

Department of Labor

GTE Government Systems

Office of Personnel Management

Social Security Administration

State of Washington

U.S. Information Agency

National Performance Review

BENCHMARKING STUDY ORGANIZERS

Wilett Bunton, NPR Benchmarking Team Leader

Lori Byrd, NPR Benchmarking Team

Dolores Livingston, NPR Benchmarking Team

Linda Nivens, NPR Benchmarking Team

BENCHMARKING STUDY TEAM LEADER

Ron Massengill, Department of Defense

BENCHMARKING STUDY TEAM MEMBERS

Girtha Burks, Department of Energy

Loren Casement, Department of Commerce

Craig Conlin, National Aeronautics and

Space Administration

Philip Demarais, Department of Defense

James Ellis, Department of Defense

Susan Lehotsky, Internal Revenue Service

Maynard Malabey, Social Security Administration

David Murray, Department of Education

Robert Page, Department of Veterans Affairs

Robert Warren, Department of Defense

Lewis Waters, Department of Energy

Lette Weinrich, Social Security Administration
1

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

When the history of the United States during the final 20 years of the 20th

century is reviewed, one issue that will be seen as defining the American

workforce for the period is downsizing and the loss of the perceived “social

contract” of lifelong employment in the public and private sectors with a

single employer. According to a March 1996 series of articles in the New York Times, “The

Downsizing of America,” more than 43 million jobs have been lost in the United States since

1979, affecting nearly one-third of all households. 

Whether it is called downsizing, rightsizing, delayering, reduction in force, redundancy elimination, or any of a host of other terms, the expectation of lifelong employment with one

employer has now become the exception rather than the rule. Both in the federal government

and the private sector, the loss of that sense of security—combined with the familiar scenario in

which the number of employees is reduced but the amount of work remains unchanged—can

have devastating effects on the remaining employees, otherwise known as the “survivors.”

Providing improved service with fewer workers is the hallmark of a successful downsizing. A

smaller federal government from which the American people obtain improved service is the

essence of the Clinton Administration’s goal of a government that “works better and costs less.”

To help achieve that goal, it is important to review and learn from the experiences of organizations that have downsized—and recognize that downsizing does not always achieve the

intended results.

The fundamental reasons for downsizing in the federal government, and also among state

and local governments, are different from those cited by organizations in the private sector.

Private sector entities must reduce costs to remain competitive in an increasingly global

economy and to maximize the returns of their shareholders. Public sector downsizings are

primarily driven by budget reductions and technology improvements that allow fewer workers

to do the same amount of work. The most recent—and the largest ever—federal workforce

EXECUTIVE SUMMARY
SERVING THE AMERICAN PUBLIC:

2

reduction stemmed from President Clinton and Vice President Gore’s decision to reinvent the

federal government by making it smaller and more efficient. Despite these different motivations

for downsizing, the reactions and needs of the workers are the same across both public and

private sectors. For this reason, much can be learned from the experiences of private—and

public—organizations that have downsized in recent years.

STUDY FINDINGS

Following are some of the highlights of the Downsizing Study Team’s findings from our investigation of benchmarked organizations: 

Senior leadership plays a vital role in downsizing. We found that successful downsizing

resulted when senior leadership became involved early on in the process and continued to

participate actively, remained visible and accessible, and was perceived by employees to be their

source of communications concerning major downsizing actions.

Overcommunication is impossible during downsizing. We found that honest and open

communication of what was happening to the organization during the downsizing is what

employees most want from their organization’s leadership. Moreover, the communication flow

must be two way, with management listening to employees as well as the converse.

Planning for downsizing begins with getting the right people together. This includes senior

leadership, human resource executives, and labor representatives; all of whom play key roles in

strategic downsizing planning.

Information not normally required in an organization’s day-to-day operations becomes

critical during downsizing. For example, management requires information for planning and

monitoring the staff reduction, and employees need information to help them decide on a

course of action. Most of this information is supplied internally by human resource offices;

additional information can be obtained from other organizations that have successfully downsized.

Successful planning for downsizing includes the development of business plans from various

departments within the organization. Requiring each department within an organization to

develop a business plan helps ensure that the managers of those departments are involved in the

planning; it also builds support for the effort.

Identification of work processes that will not be needed in the future organization is vital

to the success of the downsizing action. This identification effort also helps protect those

processes that are key to the organization’s future from being affected by the downsizing.

Incentives such as early retirement and buyouts work well and are popular with employees.

Early retirement incentives allow employees to retire with either full or reduced pension benefits

at an earlier age than normal; buyouts provide a lump sum payment to employees in exchange
BEST PRACTICES IN DOWNSIZING

3

for their leaving the organization voluntarily, regardless of whether they are eligible for early or

regular retirement.

The use of multiple strategies and techniques to accomplish goals for downsizing helps to

leverage the outcome. Our partners found that not all downsizing strategies worked exactly as

planned, with some not working well at all and others exceeding expectations. The concurrent

use of multiple strategies, therefore, helps ensure the success of the downsizing process.

Organizations that have successfully downsized provided career transition assistance to

both separated and surviving employees. Among the services provided are career counseling,

personal counseling, career/skill and career transition training, relocation assistance, outplacement assistance, resume––writing assistance, access to office equipment, paid time off, child

care, financial counseling, and access to job fairs and to Internet job placement sites. 

Monitoring progress is a chief component of successful downsizing. Those organizations that

took the time to periodically review their procedures, learn from their mistakes as well as their

successes, and incorporate what was learned from these periodic assessments into their downsizing procedures found that they could minimize adverse impact in ongoing downsizing

processes and complete future downsizings in a more streamlined fashion.

SUCCESSFUL DOWNSIZING DEPENDS ON THE SURVIVORS

A key conclusion of this report is that the success or failure of a downsized organization

depends on the workforce remaining after the downsizing. A well-planned and -managed downsizing process, which the survivors perceive as having been fairly and humanely administered,

promotes trust and faith in management and in the future of the organization among these

employees and empowers them to provide improved service.
5

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

INTRODUCTION

Americans don’t like big government much, and we

want less of it wherever possible. But we also expect

much from our government and have high aspirations

for it.

Vice President Al Gore

While it is generally accepted

that Americans want a smaller

federal government, it is also

true that they expect a lot from

their government. The Federal Workforce

Restructuring Act of 1994—which requires that

federal employment levels be reduced by 272,900

during fiscal years 1994 through 1999—combined with budget-cutting measures, changing

work processes, evolving technology, and

eliminations of functions and programs will

ensure a smaller workforce. The challenge federal

managers face is organizing, training, and

empowering that smaller workforce to deliver to

the American people the services they want and

deserve. At the same time, the downsizing

process should maintain the dignity of the

departing workers and the morale and productivity of the surviving workers. 

WHY IT IS IMPORTANT THAT

DOWNSIZING BE SUCCESSFUL

A distressing 80 percent of downsizers admit that the

morale of their remaining employees has been mugged.

These sullen, dispirited, hunkered-down folk, lest we

forget, are the very people who are supposed to

revitalize your enterprise and delight your customers.

Ronald Henkoff in Fortune,

January 10, 1994

Providing improved service with fewer

workers is the hallmark of a successful downsizing. A smaller federal government from

which the American people obtain improved

service is the essence of the Clinton Administration’s goal of a government that “works

better and costs less.” Unfortunately,

downsizing has often been used as a one-shot

method to achieve the singular goal of

reducing payroll costs. When this is an organization’s approach, undesirable outcomes

usually result. 

In researching downsizing efforts in both

the public and private sectors, our team found

numerous examples of negative impacts on

employee productivity and morale and on

customer service and product quality. Furthermore, downsizing does not always achieve the

intended goals. A leading human resource

consulting company survey of restructuring

practices among 531 large companies,

conducted in 1993, revealed that although

well over half of the companies surveyed

achieved their goal of reducing costs and

expenses, less than half achieved their goals of

increased profitability, productivity, and

customer satisfaction.
SERVING THE AMERICAN PUBLIC:

6

The American people cannot reasonably

expect improved service from a demoralized

workforce—one that has witnessed colleagues

summarily dismissed by what are seen as

unfeeling and unsympathetic managers and

that lives with uncertainty about future reductions. Nor should the American people expect

improved service from a workforce whose

numbers have been reduced but for whom the

way work is done and the amount of work to

be done remain the same. Process improvements that compensate for workforce reductions often require systems modernization and

increased automation. Therefore, long-term

savings often depend on what can be a substantial upfront capital investment. 

Used as a tool in an overall reengineering/

restructuring strategy, downsizing has been

successfully accomplished in both private and

public sector organizations. However, those

successful organizations recognized downsizing

for what it is: a management tool that must be

used with other management tools to achieve

the goals of reduced costs and improved

service.

SUCCESSFUL FEDERAL

GOVERNMENT DOWNSIZING:

THE GOOD NEWS

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.

President Bill Clinton

Our study found a number of best practices

associated with downsizing within the federal

government. On September 12, 1995,

President Clinton issued a memorandum

requiring all executive branch agencies to

develop career transition assistance programs

to help their employees affected by reductions

in force (RIFs) find other employment. Specifically, agencies must establish:

• programs to provide career transition

services to the agency’s surplus and

displaced employees;

• policies for retraining displaced

employees for new career opportunities;

and

• policies that require the selection of a

well-qualified surplus or displaced

internal agency employee who applies for

a vacant position in the local commuting

area before selecting any other candidate

from either within or outside the agency.

Although the Federal Workforce Restructuring Act of 1994 targets reductions over the

1993-99 period, some agencies began reductions prior to that time. Our literature search

revealed numerous mentions of best practices

associated with downsizing within the federal

government.

• The Priority Placement Program is an

automated system in use within one

federal agency that matches employees

who are scheduled to be separated with

vacant positions for which they are qualified. Created in 1965, the program has

placed over 100,000 employees. Supervisors reported in a survey that almost 99

percent were satisfied with the employees

placed with them through this program.

• The same agency developed an

automated registry that provides resumes

of federal personnel and their spouses to

some 14,000 registered employers upon

request. Approximately 900,000 resumes

a year are referred to employers.

• This agency also developed an electronic

bulletin board of employer want ads

available for viewing by displaced

personnel at sites worldwide. The agency

is now examining the possible expansion

of these programs to the federal sector at

large.
BEST PRACTICES IN DOWNSIZING

7

In another example of federal best practices

in the area of career transition, the Office of

Personnel Management (OPM) makes several

resources available to all federal agencies. For

example, The Employee’s Guide to Career

Transition, dated January 1996, describes new

career transition services that are available to

help affected federal employees find jobs both

within and outside the federal government. 

Also, to prevent human resource specialists

and managers from becoming overwhelmed by

the tasks required in downsizing, and

recognizing that needed skills and expertise

may not be resident in each agency, OPM has

developed a suite of downsizing services available to federal agencies on a reimbursable

basis. These include:

• development of an agency-specific downsizing planning document,

• development of an agency-specific career

transition program,

• technical assistance in RIF planning,

• development of an agency outplacement

program,

• career center design assistance,

• individual career counseling, and

• planning and conducting job fairs.

While the development of a career

transition assistance plan is important, our

study found that career transition assistance is

only one element of a downsizing plan. Downsizing plans should also include—among other

elements—assessments of the current and

future organizational structure, current workforce skills and competencies, and future

workforce needs; and a communications plan.

THE STUDY DESIGN

We owe a special thanks to the people who have really

made reinventing government work. The real heroes

of reinvention are the men and women of the federal

government at every rung on the ladder, the folks who

work where the rubber meets the road. They have

buckled down and made the downsizing process

possible, and now they need our support. We will

provide it to them as they take their talents and

training to other parts of the federal government or to

the private sector.

Vice President Al Gore

Why a benchmarking study on downsizing?

Downsizing has become entrenched in

American culture during the 1980s and 1990s.

It is difficult to pick up a newspaper or magazine or tune in to a television news program

that does not mention the topic in some way.

Examples of successful downsizing among

public and private sector organizations are not

hard to find. Unfortunately, examples of

unsuccessful downsizing are just as easily

found. 

Our study, and other studies on downsizing, found that many of the same elements

that contributed to one organization’s

unsuccessful downsizing, such as poor

planning and communication, can repeatedly

be found in other organizations’ experiences.

The opportunity to learn from these organizations’ experiences by identifying both best

practices and lessons learned is significant and

should not be overlooked by either public or

private sector entities. This, combined with a

new perspective on downsizing as one of many

management tools that must be used together

for effective and successful organizational

restructuring and reengineering, makes the

benchmarking study process particularly

appropriate for this topic.

Benchmarking consortium. This study is one

of a series of benchmarking studies chartered

by Vice President Gore’s National Performance

Review. The President’s Management Council,

made up primarily by the Deputy Secretaries

and their equivalents from the major federal

departments and agencies, identified several

potential topics for benchmarking studies.

Eight federal agencies joined together in an

interagency team to study the topic of

downsizing.

Selection of partners. The team conducted an

extensive literature search from which a substantial number of downsizing best practices
SERVING THE AMERICAN PUBLIC:

8

were identified. The literature search was also

used to develop a list of prospective partners

consisting of organizations that have taken an

active and positive role in minimizing the

adverse effects of decisions to downsize. A

questionnaire to guide our data collection was

sent to our prospective partners. We obtained

a mix of federal agencies and state and city

governments, as well as a foreign government

and several private sector companies—all of

which had been recognized for best practices

in some area of downsizing. 

Based on availability, the team met with

several best-in-class organizations. It was clear

to us from the start that there was no single

example of downsizing that could be used by

all federal agencies. We recognized, however,

that a considerable number of best practices

associated with downsizing could be used by

organizations to contribute to their success.

To help us examine downsizing processes at

our own agencies, the team then took on the

task of developing a model of federal

government downsizing.

DOWNSIZING MODEL

One of the team’s first tasks was to look at

how downsizing has been conducted within

our own agencies. We found that most

agencies relied on experience and lessons

learned from previous downsizing experiences

—rather than external benchmarking—to deal

with current situations. The experience with

restructuring and downsizing and the availability of written plans, procedures, and guidelines for downsizing processes varied greatly

among agencies. This makes the development

of a single, precise model of downsizing in the

federal government impossible. However,

based on the review of processes associated

with downsizing within our own agencies, the

team members developed a “generic” model of

downsizing within the federal government.

The figure on the following page depicts that

model, which is described in the narrative

below.

Receive notice. Notice that an agency will

undergo downsizing may come in varying

forms, including budget reductions or mandatory specified reductions in the number of

employees, and from a variety of sources

including Congress, the Office of Management and Budget, elsewhere within the executive branch, or internally as the result of

agency reengineering/reinvention processes.

Assess impact. Once it is acknowledged that a

reduction is likely, most agencies assess the

impact of such cuts by:

• converting dollar cuts to full-time equivalents (FTEs),

• reviewing agency mission and goals to

determine the best ways to continue to

meet them in a restructured/downsized

environment,

• preparing estimates of where best to

apply FTE reductions (whether by

program or location), and

• determining appropriate target date(s).

Implementation plan. The degree to which

downsizing implementation strategies are

applied is driven by the magnitude of the

mandated reductions. Modest reductions are

almost always accomplished by pro rata reductions across the affected agencies and are

generally accommodated through attrition.

Large workforce reductions, on the other

hand, require planning involving multiple

concurrent activities—including strategic planning, labor-management relations, communications, and human resources.

Strategic planning. The impact of downsizing

should be incorporated into the organization’s

strategic plan to maintain a consistent understanding of the future of the organization and

how it will get there. The degree to which this

has been done among the agencies represented

in our study varies greatly. When numeric

goals are established for downsizing—as was

done in the Federal Workforce Restructuring

Act of 1994—it appears that downsizing drives
BEST PRACTICES IN DOWNSIZING

9

the strategic planning process. However, when

combined with targeted supervisory ratios and

reductions identified by the National

Performance Review to specific occupational

groups, the goals actually represent workforce

planning (decisions on what the future workforce should look like) at the highest level of

the executive branch. 

Labor-management relations. Organizations

with unions secure union involvement as early

in the planning process as possible, and that

involvement continues throughout the downsizing process. The union is an important

participant in gaining employee acceptance of

the changes that will be necessary as a result of

the required cuts.

Communications. Communication—early

and often—among management, employees,

customers, and affected communities is a key

ingredient in successful downsizing. The

implementation plan should identify how this

will be accomplished.

Human resources. The element involving the

greatest use of resources in downsizing is the

process for handling human resources. Typical

activities in this area include:

• a workforce demographics review, to

include retirement and other loss projections and assessments of the age,

diversity, and skills of the workforce;

• assessment of available options to avoid

involuntary separations, such as hiring

freeze, buyouts, early retirement,

retraining, and relocations;

• detailing FTE reductions by year,

location, program, occupation, position,

and person; 

• conducting RIFs;

• providing career transition/job placement

assistance;

• providing assistance for survivors of

downsizing; and

• ensuring that an adequate retraining

program is in place.

Functional reviews and process

reengineering. Although some agencies

conducted functional cross-cutting reviews in

their efforts to reengineer processes, we found

that, at most agencies, this has been done after

the fact as a reaction to downsizing instead of

ASSESS

IMAPCT

PLAN

TRIGGER

APPLY HR

MECHANISMS

REENGINEER

WORK

MAJOR

PROGRESS

Communicate

• Employees

• Managers

• Community

• Administration

• Congress

Obtain Input

• Strategic Direction

• Customer Requirements

• Union Involvement

DOWNSIZING

PROCESS MODEL
SERVING THE AMERICAN PUBLIC:

10

employing reengineering in the planning

process. 

Monitoring. Most agencies include

monitoring systems in downsizing plans, either

in the form of preexisting reviews or reviews

designed specifically to assess progress in

achieving downsizing goals. Some agencies

produce reports that can then be used as

guides for future downsizing activities.

Wherever the workforce reduction allows,

human resource options are reviewed with

annual budget preparation. A reassessment is

done of the requirement for RIFs, and FTEs

are reallocated among suborganizations.

ORGANIZATION OF THIS

REPORT

In producing this report, our intention is to

provide a compendium of best practices from

which federal government agencies and other

organizations can choose when developing

their strategic, business, and implementation

plans for downsizing. For convenience, we

have organized this material into seven areas,

albeit with some overlap:

• leadership,

• communication,

• advance planning and preparation,

• external and internal information needs,

• strategic direction,

• implementation, and

• performance evaluation and reporting.
11

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

Today, more than ever before, senior

leadership’s most challenging role is

to become managers of change.

Responsible leadership prepares its

personnel for change by providing clear and

concise reasons for change as early in the

process as possible through open, accurate

communication. While acknowledging the

negative aspects of downsizing, leaders should

present this change as an opportunity to institute needed improvements within the organization.

INVOLVEMENT OF SENIOR

LEADERSHIP

Senior leadership plays a vital role in downsizing. While the methodologies they used

differed, organizations that have downsized

successfully all sought to achieve organizational goals and objectives with no appreciable

loss in quality or quantity of service. Senior

leaders in all of our benchmarking partners

and other organizations researched were

involved in the planning that occurred for

their downsizing actions. It was the degree to

which their participation continued during the

implementation of the downsizing plan that

set certain organizations apart. 

We found that successful downsizing

resulted when senior leadership became

involved early on in the process and continued

to participate actively, remained visible and

accessible, and was perceived by employees to

be their source of communications concerning

major downsizing actions. A high level of

involvement, perceived interest, and concern

on the part of senior leadership had a positive

impact not only on those who were eventually

separated but on the survivors and their families as well. 

Where downsizing was effectively implemented, senior leadership was able to foster a

commitment to the organization by imparting

the necessity for the downsizing, the future

direction of the organization on a strategic

level, and the survivors’ role in helping the

organization get there. Senior leadership saw

—and conveyed—a direct correlation between

efficiently managing the downsizing process

and maintaining the viability of the

organiztion.

Senior leadership must recognize that

employees consider a destabilized environment

to be potentially threatening to their careers,

and that uncertainty surrounding their job

future causes them to look elsewhere for

opportunities. Moreover, experience has shown

that in a destabilized environment, the best

employees go first—which causes a significant

drain on the workforce at the very time those

personnel are needed most. 

SECTION 1:

LEADERSHIP STRATEGIES
SERVING THE AMERICAN PUBLIC:

12

INVOLVEMENT BY HUMAN

RESOURCE MANAGERS

If the only factor organizations had to pay

attention to when they downsized was how

many fewer employees would be on the payroll

next year compared to this year, then the

whole process would be much simpler. Senior

leadership would just have to agree on the

numbers and then turn the process over to the

human resource manager who, in turn, would

either enforce and monitor a hiring freeze or

conduct a reduction in force. 

Effective and successful downsizing,

however, is not that simple. In fact, the process

can be quite complex and multifaceted—and

human resource managers play an integral part

in its success. 

In our literature search and among our partners, we found an almost universal conviction

that, unless an entire organization is being

closed down, straight-across-the-board

personnel reductions are inadvisable. Such

reductions can cause critical programs, vital to

the organization’s future, to suffer while

leaving other programs overstaffed. To avoid

such outcomes, successful downsizing means

workforce planning. Notably, these basic questions must be answered:

• How will attrition be managed?

• How is the workforce distributed in the

target organization?

• What are the skills needed for the new or

targeted organization?

• Does the current workforce have those

skills and competencies?

• Can the current workforce be trained to

acquire those skills?

• Is some recruitment necessary to acquire

future skills that are needed?

The precision with which an organization

can answer these questions—most of which

fall within the realm of responsibility of the

human resource manager—largely depends on

the clarity of the organization’s strategic vision

and the quality and quantity of information it

possesses about its current workforce. It also

heavily depends on the organization’s human

resource information systems.

INVOLVEMENT BY MANAGERS AT

ALL LEVELS

Senior leadership at our benchmarking partners used a vast array of innovative downsizing

techniques and tools to ensure that the organization’s downsizing goals were met. However,

these leaders usually are too far removed from

face-to-face contact with employees to ensure

that downsizing is done humanely—and therefore, is ultimately successful. Involvement is

needed throughout the organization. As one

partner representative said, “Managers at all

levels need to be held accountable for—and

need to be committed to—managing their

surplus employees in a humane, objective, and

appropriate manner. While Human Resources

is perceived to have provided outstanding

service, it is the managers’ behavior that will

have the most impact.”

OVERCOMING ORGANIZATIONAL

TRADITION

One of the greatest obstacles for senior

leaders, as the managers of change during

downsizing, is to overcome organizational

tradition—that is, to challenge the “way things

have always been done.” It is very difficult for

employees to understand why their jobs are

being eliminated or their work processes

changed dramatically when they are doing as

good a job—if not better—than they have

always done. This can be especially true in

public sector downsizings caused by budgetary

reductions or a change in the political climate. 

One of our partners attributed its success in

overcoming the power of tradition to consistent and committed leadership. This organization’s leaders made it clear from the start that

this was to be a serious, long-term effort.

Consistency was the key in overcoming the
BEST PRACTICES IN DOWNSIZING

13

“this is just another management initiative”

attitude. 

Senior leadership should demonstrate commitment to change and—more importantly —

remain consistent in its communications during

downsizing. This will help overcome any

employee denial of reality and combat traditional

attitudes toward organizational change. 
15

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programs, flexible working arrangements,

the training and education allowance,

and other topics relevant to downsizing.

A substantial portion of each brochure is

devoted to commonly asked questions

and answers.

• One partner distributed “An Employee’s

Guide to Reduction in Force,” which

thoroughly describes the process to

employees, explains their rights, and

includes a section of tips for employees.

THE ROLE OF SENIOR

MANAGEMENT

Senior management should explain to

employees why the downsizing is necessary.

Our partners told us that one of the most

important roles for senior leadership in downsizing is to establish effective communication

about the process. Employees want to know

what is happening, even if it is bad news—and

they want to hear it from the top. A full and

open explanation of the reasons behind the

downsizing helps prevent feelings of unfairness

and promotes the sentiment that the downsizing is a shared experience. 

One important benefit of having senior

leadership explain the reasons for downsizing

to employees is that it helps dispel rumors—

which are almost always worse than reality.

SECTION 2:

COMMUNICATION

Overcommunication is impossible during organizational change.

A Benchmarking Partner

Our partners found that honest and

open communication of what was

happening to the organization

during the downsizing is what

employees most want from their organization’s

leadership. Some of the best practices employed

by our partners to communicate this

information include the following.

• One partner developed and disseminated

a one-page RIF facts handout which

provided the reasons for RIFs; advised

employees as to what they should be

doing (for example, ensuring that their

seniority dates were correct on personnel

records); and explained what would

happen during the RIF process.

• Another partner ensured open communications with employees by using every

communication mode (e-mail, bulletin

boards, town hall meetings) available to

announce all incentive and reorganization/consolidation options.

• One partner distributed to its employees

a series of brochures entitled “People in

Transition: Knowing Your Options.”

These brochures describe incentive
SERVING THE AMERICAN PUBLIC:

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frequency of “all-staff ” meetings from

monthly to weekly. A survey conducted

within that organization revealed that 84

percent of the respondents wanted information updates at least weekly or

biweekly. Over a third said they wanted

to be “swamped” with information and

would take responsibility for sorting out

and interpreting it themselves.

COMMUNICATION SHOULD BE

TWO WAY

Our partners stressed the importance of

listening to employees and actively seeking out

their ideas during the downsizing process.

Such two-way communication helps ensure

that employee concerns are aired—and that

employee suggestions are heard.

Many of our partners cited employee input

as an important factor in the success of their

downsizing actions. Employees frequently

contribute ideas on how the organization

should be restructured and how to increase

productivity as well as ideas on what assistance

should be provided to employees seeking new

jobs. Our partners told us that provisions

should be made for employee ideas to be

submitted both confidentially and in open

forum meetings where they could be discussed

by employees and management. 

Employee suggestions can benefit an organization and empower the employees. For

example, one of our partners established teams

that included employees from all levels of the

organization. One team was authorized to

challenge any of the practices, policies, and

procedures of the organization and to recommend changes. The team came up with

suggestions representing $2.8 million in

savings in one year. These suggestions included

negotiating a new contract for long distance

telephone call rates, which resulted in a 30

percent reduction of these costs.

Another benefit is that it demonstrates to the

eventual survivors that senior management is

aware of what is happening, is in control, and

is concerned about the impact of its decisions

on employees. This communication also

provides senior management with an opportunity to stress to the survivors that the result of

the downsizing will be a healthier

organization.

Our partners implemented this best practice

in a variety of ways. Town hall meetings were

particularly effective as were smaller group

meetings, depending on the size of the organization. These latter work particularly well

because they allow employees to ask questions

of senior leadership and vent their frustrations.

Larger organizations use videos and written

communications. These tools are also effective,

although they do not allow for direct two-way

communication between senior leaders and

employees.

Senior leadership should remain visible and

accessible during the downsizing. Besides

continuing periodic town hall and smaller

group meetings between senior leadership and

employees, our partners used numerous means

to promote accessibility and visibility of senior

leadership throughout the downsizing process. 

• Employee information hotlines—

whether using phone or fax numbers or

e-mail addresses—proved to be very

effective. Generally, these services were

supported by promises from senior leadership to get answers back to employees

within a short time frame—48 hours, for

example. 

• One of our partners increased the

frequency of publication of its existing

employee newsletter from weekly to daily

so that the latest developments and

employee questions and answers could be

disseminated in an official forum. 

• Similarly, a 175-employee organization

undergoing shutdown increased the
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Much has been written about strategic planning. How to do it successfully has been the

subject of many publications, including a

recent National Performance Review benchmarking study report, Serving the American

Public: Best Practices in Customer-Driven

Strategic Planning. Our purpose here is not to

suggest how to do strategic planning, but to

emphasize that strategic planning is essential in

creating a shared vision of the future of the

downsized organization. Should the organization be smaller? Perhaps, but it should also be

more focused and more customer-oriented.

The strategic planning process has the power

to turn what might otherwise be a brutal

amputation into a regeneration.

LESSONS LEARNED

We found numerous examples of the price

organizations have paid when they did not

sufficiently plan for downsizing:

• Organizations have suffered from downsizing “success.” Appropriate numbers of

people leave, but the organization fails to

retain some of the best minds in areas

where it takes years to develop expertise.

Thus, there are too many people in

certain divisions and not enough in

others.

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

SECTION 3:

ADVANCE PLANNING

AND PREPARATION

Our partners believe that something

is wrong if a description of the

future state of an organization can

be summed up in the single word

“smaller.” Implementing downsizing without

reviewing the fundamental mission, processes,

services, and products of the organization can

result in fewer people available to do the same

amount of work. In addition, the work performed may not be work that has value for the

organization or its customers. This review of

mission, process, output, and customers is

strategic planning. It answers the question

“What should the organization look like three

to five years from now?” 

This insistence on the importance of

strategic planning is also found in the literature. For example, the General Accounting

Office, in its August 1996 report Federal

Downsizing—Better Workforce and Strategic

Planning Could Have Made Buyouts More

Effective, concluded that unintended results of

downsizing can be prevented by adequate

strategic and workforce planning. The report

states that “Such planning would have helped

agencies to clearly define the agency’s mission

and identify the workforce mix needed to

successfully accomplish that mission. Such

planning would have increased the likelihood

that employees with the needed skills and

training were retained.”
SERVING THE AMERICAN PUBLIC:

18

• Morale is lowered when there is no

clarity regarding the reasons for the

downsizing. Everyone needs to have the

same clear understanding of the environment.

• When budget is the only driver behind

downsizing, denial can take hold.

Managers and workers will resist change

while they wait for revenue to pick up or

for the results of the next election.

• A common mistake is to assume that

each part of the organization has an

equal share of excess staff; hence, the

organization may make erroneous acrossthe-board cuts in personnel. 

• Productivity and quality often suffer

when there is no change in the way work

is done—i.e., the same workload is redistributed among the survivors, rather than

rethought and reconfigured.

• When a key portion of the workforce is

lost, so too are valuable contacts, knowledge, and experience. Organizations that

eliminate people they later need can face

costly increases in overtime, temporary,

and contract work—expenses that can

exceed the savings created by job cuts.

PLANNING: AN INCLUSIVE

PROCESS

We asked our partners which persons

within their organizations were involved in

planning downsizing actions. The results are

displayed in the chart at the bottom of this

page. All of our partner organizations included

top management and the human resource

executive in this planning; most included

union representatives as well. These personnel

were also cited as the three key players in

strategic downsizing planning in a June 1995

study conducted by a nonprofit, nonpartisan

organization. That study found that more and

more, the human resource executive is

becoming a full business partner in modern

organizations and has developed competence

in business as well as in human resource

specializations. As an example, the director of

personnel for one of our partner organizations

reports directly to top management and is

considered part of the executive staff. Human

Community Reps

Other Stakeholders

Employees

1st Line Supervisors

Union Reps

Middle Managers

HR Manager

Top Mgmt

0 1 2 3 4 5 6 7 8 9 10 11 12

Number of Partners

2

3

4

6

8

10

12

12

INVOLVEMENT IN DOWNSIZING PLANNING
BEST PRACTICES IN DOWNSIZING

19

sizing planning from the outset. This partner

emphasized that any lingering issues from past

problems between labor and management be

resolved so that all of their combined energies

could be focused on working together on the

downsizing. This partner’s advice to

management of other organizations was to

“Make your peace with them now.” 

resource executives are relied on to integrate

the human element into an organization’s

strategic planning for downsizing. 

One of our partners stressed the importance

of the labor representative in preventing and

resolving conflict during downsizing; this organization also noted the importance of labor’s

involvement at the strategic level of down-
21

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

SECTION 4:

EXTERNAL AND INTERNAL

INFORMATION

S

everal types of information not normally

required in an organization’s day-to-day

operations become critical during downsizing. Management requires information for planning and monitoring the staff

reduction. Employees need various information

to help them decide what course of action they

should take. The source of all this information

for our benchmarking partners is primarily

internal, and the burden for providing it falls

mostly on their human resource offices. However, several of our partners tap external sources

for information in the form of other organizations that have successfully downsized.

EXTERNAL INFORMATION AND

BENCHMARKING

Our partners recognize the advantages of

learning from other organizations that have

completed downsizing processes. To exploit

this learning opportunity, they benchmark

externally with other organizations and internally so that follow-on downsizing efforts

within their own organizations can benefit

from prior experiences.

For example, when establishing a career

transition center, one of our partners used

competitive benchmarking to design an

extremely effective career transition program

based on the experience of a large organization

that had undergone extensive downsizing.

Another partner benchmarked organizational

structures in developing its plan for reducing

management layers. Still another partner

benchmarked the programs other organizations used to provide incentives to encourage

employees to retire.

One of our partners used internal

benchmarking. Specifically, this organization

made special efforts to ensure that the results

of specific downsizing actions were documented so that best practices and lessons

learned could be shared with sister organizations. Another partner held regular debriefings

of personnel officers after major downsizing

actions were completed. These debriefings

were used to make changes in the process and

to help develop a list of lessons learned from

dealing with downsizing-related problems. As

a direct result of these briefings, this organization developed a question and answer report to

be used by the next unit affected by the organization’s downsizing.

INTERNAL INFORMATION

Organizations require several types of

internal information in preparing to downsize,

including data for management planning and

information for employee decisionmaking. 
SERVING THE AMERICAN PUBLIC:

22

Management needs information for

planning and monitoring purposes. For

example, organizations preparing to downsize

need extensive demographic data on their

entire workforce. This personnel information

might consist of data by organization or data

on positions, pay grades, years of service,

retirement eligibility, age, gender, and diversity

of employees. These data must be assembled

and analyzed, first to forecast normal attrition,

and, second, to establish a baseline against

which progress can be tracked.

Data on the numbers of employees that

would normally be expected to resign or be

terminated must be gathered and analyzed as

well as data on the number of employees

eligible for normal or early retirement. Predictions must be made as to the number of

employees expected to retire or accept other

incentive packages. The quality of this information will greatly affect the organization’s

success in planning for the number and cost of

incentives to induce employees to leave or take

early retirement.

Some of our partners also developed an

inventory of employee skills so that management could make informed decisions about

organizational structure and staffing. This

inventory included a solicitation of interest

category to account for employees’ desires to

use those skills.

Management also needs information on the

impact downsizing has on minorities, women,

people with disabilities, and older employees.

A seniority-based layoff or RIF strategy, such

as that required by regulations covering federal

workers, affects these groups disproportionately. The impact on them should be

projected and monitored during the downsizing to help avoid a disproportionate impact

if possible. If unavoidable, managers will at

least have facts available to help them in

dealing with potentially adverse publicity.

Employees need information to help them

chart future directions. Providing the information needed by employees to assist them in

finding new jobs proved to be a challenge for

our benchmarking partners. These information needs are great; moreover, they are almost

always time sensitive. Job openings usually

have a short window of opportunity during

which an employee must act. Similarly, the

availability of training courses must be known

far enough in advance to plan for the required

time commitment. To be useful, such information must be provided in a structured manner.

PROVIDING THE INFORMATION

We found that the burden of providing

information required during downsizing fell

primarily on human resource offices. In fact,

the workload increase for these offices caught

many of our partners by surprise. How they

handled the added workload, and best practices we found being used by our partners

related to external and internal information

provision, are described below.

Develop a human resource information

system. Several of our partners are developing

human resource information systems so that

staffing actions can be taken electronically.

Although most of these systems were in the

planning stages at the time of our study,

planned capabilities include integrated

personnel and payroll databases and on-line

staffing. Some of these systems will let managers access databases containing employee

skills and training and personnel records and

policies. Although useful at all times, the

ability to access human resource information

easily and flexibly is especially critical during

downsizing. Accurate and timely information

ensures that actions taken are equitable and

fairly administered.

Recognize and plan for the increased workload for the human resource staff occasioned

by downsizing. Our partners consistently

spoke of the dramatically increased workloads

experienced by their human resource staffs

during downsizing. In addition, we found that

human resource offices need time to adjust to

the shift from their typical main task—

hiring—to the work required by downsizing—

the laying off of large numbers of people. One
BEST PRACTICES IN DOWNSIZING

23

Survey employees early in the downsizing

process to assess their progress in obtaining

new jobs and to assess the utilization of

career transition services. Several of our partners used surveys to collect data from

employees on the degree of utilization of career

transition services and to assess their progress

in finding a new job. One of our partners

conducted a written survey well into a downsizing but approximately six months prior to

the anticipated closure of an office. The survey

revealed, surprisingly, that many employees

were still “in denial” and were not making use

of the career transition services available to

them. The survey probably should have been

conducted much earlier in the process so

management would have had more time to

assist the employees.

Use downsizing-related data to effect needed

organizational changes. Changing demands

for services or improvements in workplace

technologies can cause an imbalance of

employees in different departments or offices

within an organization. Some of our partners

saw downsizing as an opportunity to effect

changes required by these and other factors.

For example, using workload data to project

the growth rate for various types of services,

one partner found that demand for some

services would continue to grow while budget

realities demanded a reduction in personnel

costs over the same period. The availability of

reliable data allowed the organization to avoid

across-the-board personnel reductions, target

and justify reductions in those areas where

demand for services were decreasing, and

reengineer work so that service levels could be

maintained in the future.

of our partners said that as one of their lessons

learned, the personnel within their human

resource office would be among the last to be

affected in any future layoffs. Another partner

advised that alternative sources of support—

possibly from elsewhere in the organization—

be identified to assist in employee career

transition activities in order to reduce the

human resource staff’s workload. A majority of

our partners at least considered outsourcing

career transition activities.

Inventory current employee skills and assess

employees’ potential to acquire new skills. As

part of its downsizing guidelines, one of our

partners included an assessment of those

employees being displaced from their jobs to

determine skills, education, background, and

abilities. These assessments were conducted by

the human resource and training offices. The

human resource office then tried to match

these employees to available jobs elsewhere in

the organization. Any necessary training was

determined. 

The downsizing literature contains

numerous recommendations to assess

employees’ potential to acquire new skills.

Organizations use both formal and informal

methods to conduct such assessments. Formal

methods often require the services of an

outside contractor; informal methods—

conducted by the employee and supervisors—

are equally effective and less costly. These skill

assessments are useful in placing employees in

existing positions, and are also helpful in identifying which employees have the skills or aptitudes that will be needed by the organization

in the future.
25

Vice President of the United States

AL GORE

SECTION 5:

SETTING STRATEGIC

DIRECTION

The importance of planning for downsizing, as discussed in section 3 of

this report, was emphasized by our

partners and in our review of the

literature. Our partners used their downsizing

plans—developed in conjunction with their

organization’s overall strategic plan—and external and internal information to set a strategic

direction for downsizing. That strategic direction was the path toward which our partners

aligned activities and resources to accomplish

their downsizing goals. What follows are the best

practices they used to convert their downsizing

plans to strategic direction.

Use innovative techniques to communicate

the downsizing plan to employees. It is vital

that employees understand the downsizing plan

and have the opportunity to ask questions

about it. In some large organizations, a letter or

memorandum from senior management may be

the only practical method for communicating

the downsizing plan to employees. However,

various innovative communication techniques

might also be used to inform employees about

future plans. For example, the plan could be

introduced to all employees at an off-site

location. Not only does this provide the advantage of getting the same information to

everyone at the same time, but it also emphasizes the importance of the plan. Moreover, it

allows for two-way communication. 

One large organization mobilized its

internal public relations capabilities to

communicate the downsizing plan and keep

employees updated. It published a weekly

faxed newspaper, ran an electronic bulletin

board, broadcast a weekly in-house TV show,

and convened four meetings attended by

nearly 2,000 employees. Another large organization, which found itself in the position of

having to transform an entrenched corporate

culture, developed a plan and then extracted

from it short and simple vision and value statements. These statements were widely printed

on everything from banners to coffee cups to

communicate them to employees.

Require business plans from each department within the organization to show how

the downsizing plan will be implemented.

Our partners emphasized the importance of

developing business plans based on the downsizing plan, as well as the importance of

holding departments responsible for meeting

targets established in these plans. Requiring

each department within an organization to

develop a business plan helps ensure that the

managers of those departments are involved in

the planning; it also builds support for the

effort. The partners also noted that departments should be given the authority and

freedom to restructure based on their future

missions.
SERVING THE AMERICAN PUBLIC:

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Identify work processes that will not be

needed in the future organization so that

positions associated with these processes can

be targeted for elimination. This activity

works best when decisions on the elimination

of positions are made by teams of managers

and employees. Among our partner organizations, such teams were made up of employees

from a cross-section of departments within the

respective organization. The employee

representation on these teams gave the downsizing plan as a whole additional credibility

with all employees. Identification of work

processes not needed in the future organization

also protects those processes that are key to the

organization’s future from being affected by

the downsizing.

Several of our partners formed teams of

managers and employees to develop the

business plans. Their experience was that

involving employees improves morale, builds

trust between managers and employees, and

makes the entire team more knowledgeable

about the organization. One partner’s best

practice in obtaining employee involvement

was the formation of two managementemployee teams—one to revise the

organization of the department and one to

develop innovative ideas for how the work of

the department should be done. Employees

were invited to volunteer to serve on these

teams via a memo from the human resource

office; the memo also provided a mechanism

for employees to submit ideas in confidence.
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Vice President of the United States

AL GORE

SECTION 6:

IMPLEMENTATION:

TRANSLATING STRATEGIC

DIRECTION INTO ACTION

How the actual downsizing process is

managed will have more direct

impact, and leave the longest

lasting impression, on both the

employees being separated and the survivors

than any other phase of the process. The ease

with which the process is accomplished is determined by the effectiveness of the strategic and

workforce advance planning and can be measured—at least in part—by how little the organization’s workflow is disrupted. 

In our study we looked for best practices in

the management of the downsizing process,

especially those that would support the remaining employees (survivors). We found that

the organizations in which survivors felt welltreated were the same ones that treated their

separated workers well. These organizations

recognize that how survivors feel about the

organization is in large part based on how they

saw their former co-workers treated as they

were being separated. Moreover, these organizations understand that the downsizing techniques and tools they use require constant

monitoring, and sometimes frequent adjustment, if they are to be successful.

DOWNSIZING TECHNIQUES AND

STRATEGIES

Many of the following techniques and

strategies were commonly used by our partners

as well as by other organizations undergoing a

downsizing. We surveyed our partners on their

use of these techniques and their evaluation of

the effectiveness of each method. The results

of this survey, and the best practices we found

associated with these techniques, are presented

below and in the chart on the following page.

Attrition. Attrition is the normal reduction of

the workforce caused by employees leaving the

organization for reasons of retirement, death,

or resignation. A hiring freeze, either total or

partial, is a human resource management

strategy used by nearly every downsizing organization. This strategy may be sufficient in

itself if normal attrition is substantial, and the

downsizing required is modest and can take

place over an extended period. 

Our benchmarking partners described this

method as being relatively painless and effective. They remarked, however, that the probability is high that workforce imbalances will

develop if there is no plan to guide either

internal redistribution of employees or limited

hiring.

Early retirement and buyout incentives.

While not all of our partners offered these incentives, among those that did, they were rated

among the most effective downsizing techniques

used and were very popular with employees.

Early retirement incentives promote

additional attrition by allowing employees to
SERVING THE AMERICAN PUBLIC:

28

retire with either full or reduced pension benefits at an earlier age than normal. These incentives work well for those organizations able to

offer it to their employees. For example, one

partner organization offered a program that

either reduced the required minimum retirement age by five years or added five years to

length of service; this program accounted for

about 49 percent of the organization’s

voluntary separations. Similarly high rates of

employee acceptance were found among other

partners.

Buyout incentives consist of offering a lump

sum payment to encourage employees to leave

voluntarily; such incentives encourage attrition

of those who are eligible/not eligible for either

early or regular retirement. 

There is little doubt that buyouts are effective incentives. In 1994 and 1995, almost half

of the federal government’s reduction of jobs

since the passage of the Federal Workforce

Restructuring Act involved buyouts. The

buyouts were also effective in preventing RIFs:

only 6 percent of the total reduction during

1994-95 involved involuntary separations.

Early retirement and buyout incentives

require funding. In general, this funding

comes from savings resulting from hiring

freezes. Our partners reported using other

techniques as well both to help fund the

programs and to prevent resource imbalances.

One partner created a “job bank,” into which

all vacant positions across the organization

were placed. Departments had to review their

need for replacements and request them from a

committee whose task was to ensure that highpriority vacancies were filled, while

maintaining the job bank at a designated level.

With few exceptions, each vacancy could only

be filled by another employee of the organization; this created another opportunity for

review and elimination of a position.

Management accountability was a key

feature in the funding of incentive programs

for another partner. This partner established

“payback” periods for both its buyout (one

year of salary) and early retirement (two years

of salary) programs. There is a central fund for

both programs, although each department

within the organization is expected to absorb a

small percentage of the cost. Managers were

informed that their investment in downsizing

costs for these incentive programs must allow

for the payback time frames and that these

Involuntary Separation

Attrition

Early Retirement

Buyout

0 1 2 3 4 5 6 7 8

Number of Partners Rating Technique as Very Effective

3

5

6

8

EFFECTIVENESS OF DOWNSIZING TECHNIQUES
BEST PRACTICES IN DOWNSIZING

29

Another partner offers a program known as

“Leave With Income Averaging” both to

reduce its budget for employee salaries and to

help employees better balance their work and

personal lives—and, in some cases, to help

them move toward new careers. Employees can

take leave without pay for between five weeks

and three months within a year. Pay is

averaged out over the year to reflect the

reduced time, but their pension and benefit

payments as well as insurance coverage

continue at the old levels. An interesting variation available to one partner’s employees is

“Pre-retirement Transition Leave,” by which

employees who are within two years of full

retirement eligibility can reduce their work

week by as much as 40 percent. Pay is reduced

accordingly, but their pension and benefit

payments and insurance coverage continue at

previous levels. The employee must agree to

resign at the end of the leave period of up to

two years.

Another partner has a very flexible policy

on employees’ use of leave without pay.

Employees may take such leave one day a week

or just about any desired way with no effect on

their seniority date. 

The partners’ experience has been that

when employees understand all the facts about

leave without pay, they will avail themselves of

it. Some employees, for example, will take

such leave to finish their education. And, in

one organization, several people voluntarily

reduced their hours so no jobs would be lost.

Other flexible work arrangements. Several

partners offer a variety of flexible working

arrangements to their employees. They regard

these programs as important tools for their

managers, enabling them to maintain high

levels of service while meeting their workforce

adjustment requirements and providing

choices to employees—and thereby empowering them to better balance their work and

personal lives. The programs include telework;

part-time employment; flexible work hours;

variable work week; job sharing; and a variety

of leaves with and without pay including

education leave, maternity leave, paternity

time frames would be reviewed in future

audits.

Involuntary separation. Also known as

layoffs or RIFs, involuntary separation was the

least favored technique available to our

partners. Most organizations are forced by

law—in the case of most public sector

employees—or by bargaining agreements to

employ seniority-based criteria in deciding

which employees are to be separated. The

disruption accompanying the “bumping” of

people into lower graded and lower paying

jobs can take years to overcome. Our partners

also cited the practice’s negative impact on

employee diversity, since women and minorities tend to be disproportionately affected by

seniority-based layoff policies. All of our partners provided career transition assistance to

employees, usually with job placement and

training assistance, severance pay, and continuation of benefits such as health insurance for a

period of time. 

Leave without pay. Taking a leave of absence

without pay with reduced benefits, but with a

guarantee of being able to return to the job at

the end of a designated period, appeals to

some employees. It also appealed to some of

our partners whose reason for downsizing was

to cut costs rather than meet a mandated

reduction in the number of employees. 

Two of our partners relied on leave without

pay or temporary leave of absence as major

components of their incentive programs for

voluntary separations. One partner’s program

enabled an employee to take a minimum of

three years’ to a maximum of five years’ leave

without pay. The program includes the right

to return to employment, although not necessarily to the same position. While employees

are on leave they are eligible for educational

assistance, credit union participation, medical

insurance under the Consolidated Omnibus

Budget Reconciliation Act of 1986, continuation of most insurance under group rates,

accrual of length-of-service for retirement plan

calculations, and payment for accrued vacation

at the time leave without pay starts.
SERVING THE AMERICAN PUBLIC:

30

leave, adoption leave, self-funded leave, leave

for care and nurturing of preschool children,

leave for personal needs, and leave for relocation of spouse. The advantages of these

programs—for both employees and

employers—include:

• increased ability to recruit/retain topquality staff;

• increased health, morale, and

productivity;

• decreased absenteeism and turnover;

• a strong and positive impact on the work

environment;

• improved service to clients in different

time zones; 

• increased use of office equipment and

space;

• reduced stress, as the employee is able to

control, predict, and absorb changes in

both workforce and family settings; and

• increased opportunity for employees to

pursue educational advancement, professional development, child care or health

management responsibilities, hobbies, or

personal goals.

Other techniques managers can consider in

lieu of involuntary separation include overtime

restrictions, union contract changes, cuts in

pay, furloughs, shortened work weeks, and job

sharing. 

These types of work changes are most

successful when employees have been extensively involved in the decisions behind their

implementation. Employees may prefer a

“shared pain” approach to downsizing rather

than see their co-workers laid off. The organization benefits because morale remains high.

Some workers considering career changes

benefit because they have more time to pursue

other employment.

IMPLEMENTING MULTIPLE

STRATEGIES

Our partners found that not all downsizing

strategies worked exactly as planned—some

did not work well at all; others exceeded

beyond expectations. The concurrent use of

multiple strategies therefore helps ensure the

success of the downsizing process. All of our

partners used multiple strategies simultaneously. Some partners not only combined

multiple workforce reduction strategies, such

as buyouts and attrition, but also combined

them with multiple process reengineering

strategies. For example, one of our partners

used eight strategies simultaneously to achieve

its downsizing objectives. These included:

• a hiring freeze in conjunction with a

review process to evaluate vacated

positions for elimination;

• a retirement incentive program;

• guidelines for reducing management

layers;

• an assessment of services across the organization;

• establishment of teams made up of

employees from across the organization

to reengineer processes;

• establishment of training as a strategic

resource, exemplified by (1) creating a

training office separate from the human

resource department, (2) retraining

employees transferred into new positions,

and (3) offering all employees training in

stress and change management, customer

service, and working in teams;

• investments in technology—such as

phone mail equipment, local and wide

area networks, and electronic bulletin

boards—to achieve greater productivity;

and

• establishment of a customer service

center to improve service to the public.
BEST PRACTICES IN DOWNSIZING

31

TRAINING MANAGERS FOR

THEIR ROLES IN DOWNSIZING

One of our partners provides the following

guidance in its career transition program handbook: “Train supervisors of affected employees.

In an involuntary downsizing, supervisors who

will be delivering RIF notices should be

trained on HOW to best give support to

RIFed employees. Supervisors should be able

to explain what services are available and

encourage the use of these services.” The focus

of this guidance is to get employees to use the

career transition services available to them as

soon as possible, but the implicit importance

of training managers is an obvious downsizing

best practice. 

We surveyed our partners as to the types of

downsizing-related training they provide their

managers. Almost all of them provide formal

classroom training on issues managers would

be dealing with during downsizing. Most of

our partners also provide written guidance,

generally in a handbook, to which managers

can refer after formal training. One-third of

our partners provide training to managers on

how to deal with violence in the workplace.

Appendix B of this report provides a list of

downsizing-related training available to federal

managers. 

CAREER TRANSITION

ASSISTANCE AND SURVIVOR

SUPPORT

Organizations that have successfully downsized all provide career transition assistance to

both separated and surviving employees. We

surveyed our partners regarding their

transition services; their responses are recorded

in the chart on the next page, and their best

practices are described below.

Provide career counseling to employees to

help them identify skills and abilities and

determine training required for possible

future career paths. One of our partners has

four professional career counselors on staff at

its career transition center. They offer

employees confidential sessions to identify

their interests, skills, values, and preferred

work style as well as to explore their career

options and develop career goals. The counselors also administer and interpret career

assessment instruments that provide samples of

occupations matching employees’ interests,

skills, values, and personality. Some of the

instruments used are the Myers-Briggs Type

Indicator, the Self-Directed Search, and the

Strong Interest Inventory.

Provide personal counseling to employees to

help them vent their feelings, rebuild their

self-esteem, and deal with stress. Some of the

techniques used in partner organizations for

personal counseling include one-on-one counseling with a trained professional, peer counseling, and group counseling. These latter two

are most typical among our partners; professional one-on-one counseling is rarely offered

due to the associated cost. 

Our partners usually provide personal counseling in conjunction with career counseling.

One partner primarily used individual peerbased counseling as it downsized. For this, it

used employee facilitators, who were trained

internally and assigned to employees with RIF

notices on a 1:10 ratio. The peer facilitators

served as employee advocates and coaches on

issues ranging from benefits and rights to

helping employees develop their resumes and

market themselves. Over 90 percent of the

affected employees realized successful transitions (defined in employees’ own terms)

within six months of their separation dates.

Many of the employees and some of the

peer facilitators also participated in the second

type of counseling offered by the

organization—facilitated peer groups. These

groups, which came to be known as “job

clubs,” brought peer counselors’ clients

together to share problems and information,

thus making it possible for employees to

support each other and attain more energy and

creativity than they might have accomplished

individually. 
SERVING THE AMERICAN PUBLIC:

32

The organization also offered, on a limited

basis, a third type of counseling—seminarbased counseling. The goal of this counseling

was the same as in individual peer-based counseling, but was delivered in a seminar format.

Trainers delivering the seminars were also

available for limited individual consultations

on an appointment basis.

Provide career transition training to

employees to prepare them for what to expect

during the downsizing process, to help them

obtain jobs in other organizations, or to

enhance their skills for employment within

or outside the organization. Most of our

partners established a series of workshops or

seminars for employees that were designed to

enhance or take the place of career and

personal counseling. A cross-section of the

titles of these training opportunities illustrates

the wide range of issues considered by our

partners: Dealing With Change, Stress

Management, Starting Your Own Business,

Creating Your Resume, Discovering Your Real

Career, Cut Your Job Search Time in Half—

Networking, Using the Holland Self-Directed

Search, Job Search on the Internet,

Mediation/Conflict Management, Internal

Consulting Skills, Teamwork, and Retirement

and Financial Planning.

We surveyed our partners regarding the

types of training assistance they provided their

employees to enhance their job skills; we also

asked if they had made use of Job Training

Partnership Act (JTPA) funding to help pay

for employee retraining. Their responses are

provided on the chart on the next page.

One of our partners has a program that

allows employees affected by downsizing to

apply, and be given priority, for entry-level

jobs in another area of the organization. These

crossovers between areas would normally not

Child Care Assistance

Services Available to Spouses

Access to Internet Job Sites

Financial Counseling

Time Off to Seek Jobs

Job Fairs

Career Transition Training

Relocation Assistance

Resume-Writing Assistance

Personal Counseling

Career Transition Center

Access to Office Equipment

Outplacement Assistance

Career Counseling

0 1 2 3 4 5 6 7 8 9 10 11 12

Number of Partners Providing Assistance

1

4

5

6

8

9

10

10

11

11

11

12

12

12

CAREER TRANSITION ASSISTANCE PROVIDED BY PARTNERS
BEST PRACTICES IN DOWNSIZING

33

occur due to differing qualifications for jobs in

the respective areas. Under this program, the

employee remains at his or her previous salary

level for two years. 

Another partner provided a training and

education allowance for employees accepting

its version of a buyout. The allowance provides

up to $7,000 over a three-year period and may

be used for a variety of learning activities.

Provide relocation assistance to employees so

they can take advantage of employment

opportunities within the organization at

other geographic locations. A substantial

number of our partners provide this assistance.

While such assistance might seem costly, the

partners noted that compared to the costs of

other options—such as training a new

employee—this is a very cost-effective alterntive.

Establish a career transition center as a base

of services and resources for employees. The

majority of our partners have established a

“one-stop shop” for reemployment services.

Such career transition centers can be established with limited resources. For example, one

of our partners established its center with a

budget of $250,000 per year and just two

permanent employees. All other staffing

needs—including counselors, workshop

instructors, and staffing for a satellite location

transition center—are handled through cooperative agreements with community colleges.

This organization has also developed

partnerships with commercial copy centers as a

cost-effective way to provide services that

would normally be available only in a staffed

career transition center. These satellite facilities

in commercial copy centers provide employees

affected by downsizing with computers,

copiers, and other office equipment. Consulting services at these facilities are provided by

community colleges or, for financial counseling, by the organization’s financial institution. Since June 1993, this organization’s

career transition center has provided services to

over 3,000 clients at an average cost of $258

per client.

Provide outplacement assistance to help

separated employees locate new employment.

All of our partners provide outplacement assistance to separated employees. This assistance

takes many forms, from help in locating

listings of vacant jobs to central pools of

displaced workers for whom the employer

attempts to find positions. Many of the best

practices in this area involve large

Obtained JTPA Funding

Paid, Non-Specific Training (GED,etc.)

For Jobs in Other Organizations

For Jobs in Same Organizations

0 1 2 3 4 5 6 7 8

Number of Partners Providing Training Assistance

3

4

6

8

TRAINING ASSISTANCE PROVIDED BY PARTNERS
SERVING THE AMERICAN PUBLIC:

34

organizations helping employees find employment elsewhere in the organization through

central processing points at which displaced

employees and vacant positions are brought

together. 

For example, one partner created a “RIF

Transition Pool” to provide additional

exposure for displaced employees who want to

remain, or regain employment, with the organization. Names of employees in the pool are

referred when jobs become available. Interested

offices must review the list of qualified candidates from the pool after considering any

existing RIF register and the organization’s

own internal promotion candidates. This

program has placed over 500 employees since

it began in April 1993.

Similarly, another partner attempts to find

new jobs for RIFed employees through its

Priority Placement Program, an automated

referral program that assists its employees

worldwide. The program has been in operation since 1965 and has placed over 140,000

employees. The skills of employees being separated or downgraded are matched with vacant

positions in locations where the employee has

indicated a willingness to work and is eligible

to register. Normally, registrants whose qualifications match job requirements must be

offered the job. 

Provide resume-writing assistance to

separating employees. We found several innovations among our partners in providing this

form of assistance to their employees. Most of

our partners include resume-writing assistance

as a component of the services provided by their

career transition centers. Almost all use commercially available off-the-shelf software to help

employees create their resumes. Several partners

have offered seminars and workshops that have

specifically dealt with resumes. Our partners

cited one-on-one advice on, and critique of,

employees’ resumes by career counselors as a

very important part of counseling services.

Conduct job fairs to bring interested

employers together with separating

employees. A majority of our partners use this

technique to help their displaced employees

find new jobs. One organization conducted a

two-day job fair with 200 private sector

employers that had immediate or future hiring

needs. While the impact was positive for both

employees and employers, our partner noted

that one of the key benefits was the increased

positive perception of public sector skills on

the part of participating employers.

Provide access to office equipment to

employees seeking new employment. All of

our partners provide this service to their

employees, usually at career transition centers.

Typically, they provide access to computers,

printers, copiers, fax machines, and typewriters

as well as provide long distance telephone calls

and faxes. For employees in sites where there is

no career transition center, the example

described above—where a partner teamed with

commercial copy centers—is an innovative

best practice. 

Many of our partners noted that providing

this equipment in an office-like setting at

career transition centers gave separated

employees a place to go every day, if they

wished, and it made the transition period

between their old and new jobs less traumatic.

Provide paid time off for employees to seek

new employment. The majority of our

partners allow employees who have been notified that their jobs are to be eliminated to take

time off with pay to go on interviews or otherwise pursue job leads. They recognize that

arranging interviews and preparing for them

are stressful enough without the added burden

of arranging time off and expending leave

time—time that, in organizations that pay the

employee for unused leave, the employee may

be trying to save. Providing paid time off also

improves morale for the entire workforce,

including the survivors, by demonstrating

concern for employees being separated.

Provide child care assistance to employees

while they search for new employment. Our

study revealed that this service is rarely

provided to separating employees. Only one of

our partners provides this service. However,

child care assistance removes a large barrier to
BEST PRACTICES IN DOWNSIZING

35

a parent seeking new employment. A representative of one of our partners said that its

employees formed informal groups to provide

mutual assistance in this area.

Offer career transition services to employee

spouses. This too is a fairly unusual practice,

although four of our partners indicated that

their career transition services were available to

employee spouses. These services are especially

important in cases where an employee is being

relocated and the spouse is employed—a situation that is certainly not unusual in today’s

two-career families. In some cases, the spouse

may have the skills needed for available jobs

and can better take advantage of the outplacement services than can the employee. This

requires viewing job loss as a loss to the whole

family, not just to the employee.

Offer financial counseling to all employees

during downsizing, not just to those being

separated. Half of our partners offer financial

counseling to employees as part of their career

transition services. Some restrict this service

only to those employees who have been

notified that they are being separated.

However, we found that organizations that

provide financial planning and lifestyle counseling have higher acceptance rates for early

retirement offers than those firms that provide

no workshops. Providing financial counseling

to all employees can encourage the acceptance

of voluntary separation incentives, thus

helping organizations—and employees—avoid

involuntary separations.

Provide access to Internet job placement

sites. Most of our partners have, to some

degree, automated the job search process for

their employees affected by downsizing. We

saw an impressive array of creative approaches

including electronic inventories of available

jobs both within and outside of the

organization. These inventories, available

through the Internet, are accessible from

computers at employee workstations or in a

kiosk setting. Some of our partners have

systems that allow users to search for job

opportunities by specific criteria, such as job

group, grade level, and geographic location.

Some of these systems also let users input their

resumes so that information on the individual

employee is available to selection officials.

Most of our partners have either developed

these systems themselves or in conjunction

with an outside contractor; all use off-the-shelf

software.

A Web site on the Internet called “Planning

Your Future—A Federal Employee’s Survival

Guide” has been developed by employees from

several agencies. This site contains numerous

job availability databases as well as information

from OPM’s Workforce Restructuring Office,

including employee guides to RIFs and

buyouts. The Web site address is: www.safety

net.doleta.gov.

One partner provided a demonstration of

an electronic jobs inventory known as “People

and Jobs.” It was developed to help employees

match their skills and career interests with

available job opportunities both within and

outside the organization, and includes the

following features:

• The system was developed with the help

of an outside contractor using off-theshelf software.

• The system is accessible through the

Internet, which allows employees to

access it from their desks.

• Job opportunities can be searched by

specific criteria such as geographic location.

• Job opportunities within the

organization are input by managers;

human resource personnel input job

opportunities outside the organization.

• Employees may submit a resume on-line.

They may also keep their identity confidential; the system can assign a unique

identifier code so that the human

resource office can contact them if

someone is interested in their resume.

There is every reason to expect that the

number of job sites on the Internet will grow

substantially in the near future. Providing a
SERVING THE AMERICAN PUBLIC:

36

emotional commitment to the organization, management also assured survivors

of continued employment.

• Senior managers attended group sessions

to help them understand the nature and

extent of the downsizing.

• Survivors were provided with personal

career counseling to help them evaluate

the impact of upcoming changes on

future career options.

• Survivors were individually counseled on

the types of assistance available to them.

• Survivors were informed of the support

services provided to their laid-off

colleagues.

• Immediately after the layoffs were

announced, survivors met in groups with

senior management. They had the

opportunity to discuss their feelings

about the layoffs and the future of the

organization. Issues raised became the

focus of follow-up sessions.

• Managers increased their informal

contacts with survivors.

• Human resource managers increased

their counseling of survivors.

• Employee assistance programs outside

the organization were made available to

survivors who needed them on an anonymous basis.

Two months after the downsizing, a followup meeting was held to address unresolved

issues and assess progress. The organization

lost only two survivors to other jobs, and

productivity levels were maintained.

way for employees to access this information is

relatively simple and inexpensive, and helps

empower employees to take charge of their

search for employment. Appendix A of this

report contains the Internet addresses of some

of our partners’ systems and other Web sites

our partners have found useful.

Use employees at risk of losing their jobs as

contingent workers to make up a labor pool

for the organization. We discovered a particularly creative approach to avoiding layoffs at

one large corporation. Its workers remain on

the payroll to perform work that was previously done by contractors. The employees

continue working with their same salary and

benefits in temporary assignments. The corporation benefits by retaining talented, highperforming employees, by avoiding severance

pay for these employees, and by reduced

requirements for expensive outside contractors.

Corporate users get the benefit of employees

who are knowledgeable about the corporation

and gain the ability to expand operations in an

uncertain market with decreased risk. The

employees benefit by being able to retain jobs

in the same company. They also have increased

visibility and career development and networking opportunities not previously available

to them.

MANAGING THE SURVIVORS

One organization used a particularly innovative program for handling survivors. This

program featured the following elements: 

• Management stressed clear communication of the reason for the downsizing to

survivors. In attempting to rebuild the
37

Vice President of the United States

AL GORE

SECTION 7:

PERFORMANCE

EVALUATION AND

REPORTING

Our literature search found that the

results of downsizing are often not

what was anticipated or desired.

For example, a leading human

resource consulting company survey of 531

large corporations that had recently undergone

downsizing was published in 1993. That

survey revealed that relatively few companies

achieved the goals they had determined to be

central to their downsizing efforts. Most had as

a goal the reduction of costs/expenses, yet only

61 percent of the surveyed organizations

achieved this goal. And that proportion was

the largest than for any of the other 10 goals

listed. Less than half of the corporations

achieved their goals of increasing profitability,

competitive advantage, customer service,

shareholder return on investment, productivity, and customer satisfaction. Only 21

percent reduced waste and inefficiency, and

less than half improved decisionmaking or

cash flow. Also, 57 percent of the companies

replaced some of the workers they had laid off

within one year of the downsizing. The study

report pointed out that the replacement of

downsized employees does not go unnoticed

by surviving employees, calling into question

the credibility of management regarding the

need for downsizing since it works against the

goal of reducing expenses.

In a 1985 assessment of federal government

downsizing, the General Accounting Office

examined eight RIFs that took place at various

organizations in 1982. The investigators determined that it was important to cost out the

need for a RIF as compared to other alternatives—such as furloughs, early retirements and

attrition—to determine whether a RIF is the

most cost-effective method to reduce the

workforce. While cost savings from wages,

benefits, and overhead were usually determined, some costs attached to RIFs were not

calculated, such as payments in lieu of notice,

severance pay, unemployment compensation,

costs for transfers to other locations, and

contract costs for job search assistance. Other

costs of a RIF that are not always considered

include costs associated with the time and

resources required to process and administer

the RIF, to resolve appeals and grievances, and

to hire and train employees to fill jobs unintentionally left vacant by the RIF.

MONITORING RESULTS

Downsizing, like any other business

procedure, requires careful management. Monitoring progress through periodic in-process

reviews is a chief component of successful

downsizing. Those organizations that take the

time to periodically review their procedures,

learn from their mistakes as well as their

successes, and incorporate what is learned from

these periodic assessments into their downsizing
SERVING THE AMERICAN PUBLIC:

38

procedures have found that they could

minimize adverse impact in ongoing

downsizing processes and complete future

downsizings in a more streamlined fashion.

Below are some best practice case studies

found in our literature search and among our

partners.

Representatives of one of our partners cited

the tracking of their workforce adjustment

activities and the subsequent sharing of this

information across the departments as a key

practice in the success of their downsizing

actions. They review the progress of their downsizing quarterly and publish a widely distributed

report to enable managers to monitor

reductions by the following categories:

• by department;

• by reason (early retirement, buyout, leave

without pay, etc.);

• by occupational group (clerical and regulatory, data processing, program administration, general services, secretarial ,

stenographic and typing, general labor

and trades, and executive);

• by region; and

• by employment equity group (women,

minorities, people with disabilities).

Another partner reviews progress quarterly.

Senior leaders are given statistics on key

indicators for their departments, such as the

effects the downsizing is having on the

diversity of their organizations. 

A representative of another partner advised

that once the downsizing plan was introduced,

the response of the departments within the

organization varied widely. Some departments

responded very favorably, immediately

beginning to develop their internal business

plans and establishing teams to meet their

downsizing objectives. Some departments

moved at a slower pace, avoiding radical change.

Some departments did nothing and waited to

see if the downsizing would really happen. This

partner advised that close tracking of the

progress and achievements of each department

is essential and that the organization should not

count on one strategy working the same way for

every department within an organization.

In our research, we discovered a study on an

organization that had used attrition to reduce

its workforce by 23 percent from 1982 to

1986. Because the effort was not managed or

monitored effectively, in the same period in

which 6,000 total positions were reduced,

8,000 people were hired. Worse yet, the

resulting organization was older, less diverse,

had a higher ratio of supervisors to employees,

and was left with an imbalance of skills. The

organization revamped its workforce planning

efforts and was subsequently cited as a model

organization. Attrition is now managed and

monitored by identifying human resource

needs according to mission requirements and

by making workforce planning part of the

budget planning process. This organization

also uses turnover statistics; demographic and

hiring data; and information collected from

employee exit surveys, climate assessments,

and customer surveys to predict and monitor

attrition.

MEASURING CUSTOMER

SATISFACTION

Regardless of whom a particular organization’s customers are, the techniques used to

monitor and measure the results of downsizing

actions on these customers are transferable to

any downsizing situation. Our partners generally rely on surveys—surveys both of customers of their organization’s products or

services and of their employees going through

the downsizing. One partner’s human resource

office surveys employees and customers twice a

year to determine the effectiveness of service

provision and the attitudes of workers

concerning the downsizing effort. This partner

also surveyed a combined group of

management/employees and citizens to assess

all services provided. The results obtained

determined the relative importance and effectiveness of each service.

Another partner surveyed its employees six

months prior to closing an office to determine
BEST PRACTICES IN DOWNSIZING

39

their concerns and the information and resources they would need in the final six months of

the office’s existence. The questions specifically

asked were as follows:

• Where were the employees during the

transition process? Were their

expectations on the likelihood of

surviving the transition in line with the

probable outcome?

• What issues and information needs could

be expected in the final six months?

• How could career transition services be

better targeted to match the location and

sectors in which staff were seeking

employment?

• How effective was the priority placement

pool which attempted to match vacant

state jobs to displaced workers?

Another partner used a private sector

management company to review downsizing

activities in a number of its offices to determine

the best practices associated with organizational

strategy, human resource management, and/or

process reengineering. The objective of the

review was to maximize the lessons learned so

that they might be transferred to future downsizing and renewal initiatives. The review

methodology included one-on-one interviews

with at least five participants from each office

and a survey of all individuals affected by the

downsizing; focus groups were also used in

some cases.

MEASURES OF DOWNSIZING

EFFECTIVENESS

Our partners stressed that one of the most

important tools in helping them achieve their

downsizing goals is monitoring and measuring

the effectiveness of downsizing techniques and

strategies. Not only does this help when justifying the expense of some of the techniques,

but also when the fairness of the process is

challenged. We found that monitoring

turnover or attrition rates overall, as well as by

grade and occupation, is also critical; in this

way, an organization can assess whether the

right people and enough people are leaving. 

We asked our partners what they monitored

and measured to determine the effectiveness of

their downsizing actions. Their responses

included:

• employee reductions;

• reductions in the number of high-grade

positions;

• increase in the ratio of supervisors to

employees;

• decrease in headquarters positions;

• personnel loss due to attrition versus

personnel loss due to incentive programs;

• demographics of buyout recipients;

• use of buyouts in front-line versus overhead employees;

• decrease in personnel, budget,

acquisition, and auditor positions;

• impact on diversity goals;

• ability to meet budgetary limits;

• ability to continue to accomplish legal

and regulatory mandated programs;

• percentage of employees finding new

positions;

• financial indicators, such as the payback

period on incentive programs;

• reduction in total cost of wages and

salaries;

• meeting authorized budget and FTE

levels;

• number of appeals filed;

• number of voluntary participants in

incentive and career transition programs;

and

• customer service ratings.

Our partners told us that sometimes the

selection of an indicator was all that was
SERVING THE AMERICAN PUBLIC:

40

We have also heard from our partners that

survivors need senior leadership to show them

that the organization has a future and explain

what their role will be in that future. One of

our partners devoted much of its communication effort during the downsizing to emphasize

the purpose of the downsizing; the aim was to

create a healthier company in which the

surviving employees could look forward to

long and rewarding careers. This partner developed stock option and profit-sharing programs

not previously available to emphasize the

survivors’ stake in the new organization. 

Our partners realize that their best

employees, on whom they depend to get their

organizations past the effects of downsizing,

can often easily find employment elsewhere.

They also recognize that demoralized

employees are resistant to the types of organizational change needed after a downsizing. 

To summarize, we found that successful

downsizing resulted when survivors

experienced frequent communication from

management, had a clear understanding of

where they fit in the revised organization, and

were provided with assistance in the guidance

of their future careers with the organization.

needed to ensure that progress would be made

in that area. Their experience shows that “what

gets monitored gets managed.”

THE PRIMARY “CUSTOMERS”

OF DOWNSIZING—THE

SURVIVORS

The success or failure of a downsized organization depends on the workforce remaining

after the downsizing—that is, on the survivors.

We found that a well-planned downsizing that

alleviates survivors’ concerns must include:

• senior leadership being clearly seen by

employees as involved from the onset in

the process and continuing active participation throughout; 

• employees receiving constant and

credible communication; 

• separated employees treated with dignity

and respect; and 

• resources being devoted to support separating employees in their search for new

employment. 
Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

APPENDICES
43

Vice President of the United States

AL GORE

ABSTRACTS

Downsizing—The Meridian International

Institute

www.clearlake.ibm.com/Alliance/clusters/rs/

biblio5b.html

Downsizing Plan for the Commonwealth of

Massachusetts

www.magnet.state.ma.us/gov/downsize.htm

ARTICLES

Downsizing

heisenberg.osat.hq.nasa.gov/codex/News/

downsizing/downsize.shtml

A National Aeronautics and Space Administration

Web site that contains information about

downsizing, career transition assistance, and reduction in force. It also has information from the

Federal Employee Survival Guide along with job

information and contact lists. 

Downsizing Dilemma

www.govexec.com/features/0896s3.htm

Discusses the dilemma that federal managers

currently face—finding the balance between

helping displaced workers with outplacement

services and getting the agency’s work done.

The Downsizing of America

www.nytimes.com/specials/downsize/

A seven-part series from the New York Times about

downsizing in America. Registration is required to

access the New York Times Web site. 

HR Magazine—Damaged, Downsized Souls

www.shrm.org/hrmagazine/0596cov.htm

An article in HR Magazine discussing how to revitalize the workplace after downsizing. It also has

links to other companies’ downsizing and restructuring strategies.

Navran Associates: Downsizing Articles

www.navran.com/Articles/index.html

Navran Associates is a full-service management,

training, and consulting firm. This site contains

articles about downsizing and how to deal with its

survivors.

A Review of History and Results of Downsizing

www.brigadoon.com/~iopsych/downsize.html

A research paper documenting the history of downsizing and its presence in today’s business society. It

also talks about common outcomes and strategies

for effective downsizing.

The Wages of Downsizing

www.mojones.com/mother_jones/JA96/downs.

html

An article discussing the myths of downsizing. It

has links to related sites. 

DOWNSIZING CASE STUDIES AND

GUIDES

Alliance for Redesigning Government

www.clearlake.ibm.com/Alliance/home.html

This National Academy of Public Administration

Web site contains case studies and abstracts

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

APPENDIX A:

DOWNSIZING RESOURCES

THE INTERNET
SERVING THE AMERICAN PUBLIC:

44

Restructuring and Downsizing

www.gov.ab.ca/~pao/downsize

This Canadian government Web site contains

information about downsizing and workforce

reduction strategies performed by the Canadian

government.

Workforce Reductions: Downsizing Strategies

Used in Selected Organizations

www.ilr.cornell.edu/lib/bookshelf/HotTopics/

Downsizing/GAO_downsizing.html

A General Accounting Office case study of how 17

private companies, 5 states, and 3 foreign governments planned and carried out downsizings. It

focuses on successful strategies and approaches that

may help federal agencies implement employment

reductions mandated by the Federal Workforce

Restructuring Act.

JOB AND CAREER LISTINGS

Capitol Online Web

onweb.com/cow/job.html

A job listing site that contains employment opportunities inside and outside the D.C. metropolitan

area. The site has links to job banks across the

country. In addition, it lets users add resumes or

job listings to the site.

Career Builder

careerbuilder.com

A job search Web site that provides personalized,

confidential, and immediate access to the best

employment opportunities on the World Wide

Web.

Career Mart

www.careermart.com/main.html

This site contains job listings along with company

profiles and job fair information.

Career Mosaic

www.careermosaic.com

A job search engine that contains job listings, both

domestic and international, and company profiles.

The site also provides on-line employment

counseling and allows users to add resumes to the

site.

Career Path

www.careerpath.com

Job listings and help wanted ads from across the

country.

regarding downsizing practices and strategies in

federal and state governments.

Effective Downsizing: A Compendium of

Lessons Learned for Government Organizations

www.clearlake.ibm.com/Alliance/clusters/rs/

downsize.htm

This National Academy of Public Administration

Web site shares information from public and

private companies that have undergone downsizing

effectively.

Government Downsizing: Pitfalls and How to

Avoid Them

quasar.sba.dal.ca:2000/profs/jduffy/article1.html

This Canadian government Web site shares information about downsizing pitfalls and strategies for

avoiding them. 

Heartland Policy Study: Thoughts From the

Business World on Downsizing Government

www.heartland.org/rumsfeld.htm

Testimony from Donald Rumfeld before a

subcommittee of the House Committee on

Government Reform and Oversight about

corporate downsizing strategies that could be

applied to the federal government.

Lessons Learned From Nine Corporations

www.ilr.cornell.edu/library/e_archive/glassceilig/

6/6front.html

This Web site shares a report that discusses the

impact of corporate restructurings and downsizings

on the managerial careers of minorities and

women.

OPM Brochure CE-57 (RIF Benefits Guide)

www.rdc.noaa.gov/rif/rifben.htm/

The site contains the Reduction in Force Benefits

Guide, which summarizes benefits provided for

employees targeted for reduction-in-force action.

OPM RIF Guidance

freeway.osat.hq.nasa.gov/codex/News/downsizin/

opmrif.shtml

The Employee Guide to Reduction in Force (RIF)

from the Workforce Restructuring Office, Office of

Personnel Management.
BEST PRACTICES IN DOWNSIZING

45

Planning Your Future—A Federal Employee’s

Survival Guide

www.safetynet.doleta.gov

This site shares information about career transition,

federal and nonfederal employment, retirement,

buyouts, reductions in force, benefits, and

transitional tools.

The Virtual Press—Job Information (U.S.

Federal Government and State Jobs)

tvp.com/jfedgov.html

This site contains job listings for federal and state

governments.

Virtual Resume

www.virtualresume.com

Visitors to this site can add resumes for employers

to search and review for employment. The site also

features tools and resources to assist in writing

resumes and cover letters.

Washington State Job Search

www.wa.gov/dop/mapforsuccess/mapintro.html

This site, maintained by the Washington State

Department of Personnel, provides career

transition assistance covering financial

management, resume skills, interview techniques,

etc.

CAREER TRANSITION COMPANIES

IntelliMatch

www.intellimatch.com/iseek/

IntelliMatch connects job-seekers and employers.

The site also contains employer profiles and career

management and resume-writing tools. 

Transition Management Group/Outplacement

International

www.meer.net/users/tmg/

A transition management group that provides

consultant services to help companies and

employees maintain productivity, morale, and

career growth in times of change.

CareerCity Job Database

www.adamsonline.com

A job listing site for professional, technical, and

managerial positions.

Execunet

www.clickit.com/touch/execunet/execunet.htm

A career management information service and

career advancement networking organization exclusively for executives and senior professionals.

Federal Job Listings

www.usajobs.opm.gov

This Office of Personnel Management Web site

contains job and employment information for the

federal government.

Federal Job Opportunities Board

Use modem to dial (912-757-3100)

A bulletin board of job opportunities in federal

agencies.

FRS: Federal Jobs Central

www.fedjobs.com

A federal job listing site which also contains tools

for resume writing and other how-to resources.

Global Commerce and Information, Inc.

www.global-com-info.com/openings.html

This site contains job listings for California,

Delaware, the District of Columbia, Hawaii,

Maryland, Michigan, North Carolina, Ohio and

Virginia.

Heart/Career Connections

www.career.com/HCC/hcc.html

This site provides job listings from across the

country. It also connects job-seekers and employers

via virtual job fairs where they can carry on realtime private conversations from their home, office,

or school.

Jobs and Careers Online

jobscareers.com/jobs

This site contains job listings by job category.

OPM Mainstreet

Use modem to dial (202-606-4800)

A bulletin board of federal job information.
47

Vice President of the United States

AL GORE

The training opportunities listed here are available

at:

U.S. Department of Agriculture Graduate School

600 Maryland Avenue, SW, Room 122

Washington, DC 20024

Phone: 202-690-4280

Internet: www.grad.usda.gov

For more information on training opportunities,

contact:

• Your training office and your career resources

center

• The Metropolitan Area Reemployment Center

800 North Capitol Street, NW, Suite 660

Washington, DC 20002

Phone: 202-565-6672

• Office of Personnel Management

Workforce Restructuring Office

1900 E Street, NW

Washington, DC 20415

Phone: 202-606-0960

Internet: www.opm.gov

Mainstreet dial-in modem: 202-606-4800 

Also, many business schools and private companies

offer relevant courses.

Alternative Dispute Resolution

This seminar introduces alternative methods of

dispute resolution in the federal sector. It provides

an overview of the legal and procedural

requirements under various laws, including

Executive Order 12871 which mandates alternative

dispute resolution.

Audience Management and union officials who

may be involved with some form of

dispute resolution

Cost: Approximately $275

Length: 2 days

Coping With Stress

Stress-related anxiety and ailments not only can

sabotage the best efforts to be productive, but can

lead to early burnout. Participants will learn how to

improve their quality of life by learning how to

recognize stress signals early and to develop strategies for coping with, reducing, or eliminating the

effects of the stress signals.

Audience: All employees, especially supervisors and

managers

Cost: Approximately $400

Length: 3 days

Delegation Skills

This workshop focuses on the how to’s of

delegating work assignments, the nuts and bolts of

delegation, and how to handle the fear in deciding

what to delegate and to whom.

Audience: All supervisory and managerial

personnel

Cost: Approximately $350

Length: 2 days

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

APPENDIX B:

TRAINING AVAILABLE TO

FEDERAL MANAGERS
SERVING THE AMERICAN PUBLIC:

48

yet workloads are expanding. Leading employees

and work teams through these complicated times

requires an indepth understanding of the dynamics

of change and employee empowerment.

Participants will learn to deal with these changes.

Audience: Experienced supervisors and team leaders

who have an understanding of fundamental supervisory concepts and skills

Cost: Approximately $400

Length: 3 days 

Leadership in a Changing Government/Military

Environment

This seminar prepares participants to meet today’s

challenges and beyond. It presents concepts and

principles required to successfully lead today’s

diverse workforce while helping improve their leadership style to obtain maximum performance and

support.

Audience: Managers, supervisors, and team leaders

with overall accountability and responsibility for successfully achieving a unit’s

or department’s goals and objectives

during times of decreased funding and

personnel

Cost: Approximately $400

Length: 3 days

Organizational Study and Design

Participants will learn practical concepts, principles,

and techniques for planning and designing organizations; and how to design new organizations and

streamline existing ones. 

Audience: Program and management analysts,

personnel specialists, supervisory program

and management analysts, management

auditors, and others who study and

design organizational structures

Cost: Approximately $650

Length: 5 days 

Reengineering in the Public Sector

The National Performance Review challenges

federal agencies to make quantum leaps in their

performance through four ambitious goals: cutting

red tape, putting customers first, empowering

employees to get results, and cutting back to basics.

This course provides the skills and knowledge to

apply reengineering tools in participants’

agencies/organizations.

Effective Leadership Seminar

The role of a manager is expanding and becoming

increasingly important in dealing with the complex

challenges facing organizations today. To be

successful, one must rely on leadership skills. This

seminar examines concepts, techniques, and skills

of leadership with an emphasis on the practical

applications of leadership on the job. Participants

will learn how to develop alternatives for the most

difficult management problems. 

Audience: Supervisors and managers through grade

GS-15 and those with high potential for

such positions

Cost: Approximately $465

Length: 3 days

Interpersonal Communication

It is a recognized fact that to truly succeed one

must be able to work with others. This course will

help participants analyze how they relate to others

and how others relate to them; how they regard

themselves and how to encourage and build

positive self-esteem; how they respond to various

situations; and how to promote a harmonious work

environment.

Audience: Employees who want to increase selfawareness and effectiveness in interpersonal relationships

Cost: Approximately $400

Length: 3 days

Introduction to Supervision

This skill-building course enables employees to

make the transition from worker to supervisor with

confidence and competence. Emphasis will be on

management competencies most needed by government supervisors. Participants will learn the fundamentals of leadership, team building, and conflict

management.

Audience: New supervisors and work leaders or

persons about to assume supervisory or

lead positions

Cost: Approximately $580

Length: 5 days

Leadership: Change, Challenge, and

Empowerment

Rarely have experienced government supervisors

and team leaders faced so many challenges.

Organizations are downsizing, reorganizing, delayering, and reengineering. Resources are shrinking,
BEST PRACTICES IN DOWNSIZING

49

operations in the future. Participants will learn

specific techniques to integrate quality

improvement and strategic planning to ensure

creative and balanced responses to rapidly changing

economic, social, and political environments.

Prerequisite: Current Quality Issues and Concepts

Audience: Senior managers and managers who are

responsible for complying with the

Government Performance and Results

Act 

Cost: Approximately $400

Length: 2 days

Strategic Planning: GPRA- and NPR-Based

Strategic planning helps put organizations back on

the mission achievement track. With the opportunity to step back and analyze their situations and

needs, managers and executives will discuss formulation and implementation of goals for their organizations.

Audience: Managers and others concerned with

organizational planning

Cost: Approximately $395

Length: 2 days

Time Management

Managing one’s time is critical to professional and

personal success. This course will provide

techniques

for analyzing time usage, establishing priorities, and

developing plans for improvement, thereby

enabling

the accomplishment of more real work each day.

Audience: Employees who want to plan their time

more effectively

Cost: Approximately $300

Length: 2 days

Audience: Supervisors, managers, and key personnel

involved in reengineering

Cost: Approximately $300

Length: 2 days

Situational Management: Contingency Models

and Applications

This seminar offers a comparison of contemporary

models of management styles. Participants will be

involved in the determination of their own styles—

primary and secondary—and the effective use of

their styles given particular situations. In this time

of complex organizational issues, it is important

that all supervisors, managers, and executives optimize their management skills directed at achieving

agency goals and objectives.

Audience: All pre-supervisors, supervisors,

managers, executives, and professionals 

Cost: Approximately $395

Length: 3 days 

Strategic Planning

This course provides a knowledge of the strategic

planning process consistent with the guidance set

out in the Government Performance and Results

Act and the goals of the National Performance

Review.

Audience: Supervisors, managers, analytic staff

Cost: Approximately $350

Length: 2 days

Strategic Planning for a Customer-Focused

Government

This workshop enables senior managers to

anticipate forces—downsizing, deregulation, decentralized decisionmaking, budget reductions—that

are likely to influence their missions, resources, and
51

Vice President of the United States

AL GORE

This appendix lists useful federal publications and

other resources on downsizing and related topics

for organizations seeking to improve their

downsizing processes.

PUBLICATIONS

Adjusting to the Drawdown. Department of

Defense, Defense Conversion Commission,

Technical Report, 1992.

Career Transition: A Resource Guide. Office of

Personnel Management.

Career Transition Handbook for the Washington,

DC, Area. Office of Personnel Management.

Closing Your Base. Department of the Air Force,

Air War College, 1993.

Costs/Savings Models of Selected Downsizing

Tools. Office of Personnel Management.

The Daily Buyout: Current Developments in

Federal Downsizing. Office of Personnel

Management.

The Downsizing of an Army Organization: An

Investigation of Downsizing Strategies, Processes,

and Outcomes. Department of the Army Research

Institute for the Behavioral and Social Sciences, 1994.

Early Retirement Under the Civil Service

Retirement System. Office of Personnel

Management.

The Employee’s Guide to Buyouts. Office of

Personnel Management.

The Employee’s Guide to Career Transition.

Office of Personnel Management, Workforce

Restructuring Office, 1996.

The Employee’s Guide to Reduction in Force

Procedures. Office of Personnel Management.

The Employee’s Guide to RIF Separation

Benefits. Office of Personnel Management.

Federal Downsizing—Better Workforce and

Strategic Planning Could Have Made Buyouts

More Effective. General Accounting Office,

GAO/GGD-96-62, 1996.

Guide to Responsible Restructuring. Department

of Labor, Office of the American Workplace, 1995.

Interagency Placement Program. Office of

Personnel Management.

Interagency Placement Program: Registration

Instructions and Forms. Office of Personnel

Management.

A Meta-Analytic Study of Downsizing: Behaviors

and Attitudes Prevalent Among Survivors (Thesis).

Department of the Air Force Air University, Air Force

Institute of Technology, 1994.

New Directions: Improving Transition Assistance

for Federal Employees Affected by Downsizing.

Office of Personnel Management.

Organizational Downsizing: Individual and

Organizational Implications and Recommendations for Action. Department of the Army

Research Institute for the Behavioral and Social

Sciences, 1991.

Vice President of the United States

AL GORE

Vice President of the United States

AL GORE

APPENDIX C:

GOVERNMENT

RESOURCES
SERVING THE AMERICAN PUBLIC:

52

Reduction in Force Planning: A Practical Guide

and Checklist. Office of Personnel Management.

Restructuring Information Handbook. Office of

Personnel Management.

RIF Avoidance Strategies and Tools. Office of

Personnel Management.

Voluntary Early Retirement Guidelines (FY 96).

Office of Personnel Management.

Workforce Reductions—Downsizing Strategies

Used in Selected Organizations. General

Accounting Office, GAO/GGD-95-54, 1995.

OTHER RESOURCES

Interagency Career Transition Assistance Plan.

Under the Interagency Career Transition Assistance

Plan implemented February 1996, federal agencies

are required to select a well-qualified displaced

employee from another agency who applies for a

vacant position in the commuting area before

selecting any other candidate from outside the

agency. This program allows for active

participation by employees because they target

specific positions for which they are qualified and

in which they are interested and then apply directly

to the appropriate agency.

Metro Area Reemployment Center. Recently

opened in the District of Columbia, the Metro

Area Reemployment Center is intended as a model

for providing career transition services to federal

employees nationwide. The goal of the center—a

joint venture of the governments of Maryland,

Virginia, Washington, D.C., and the Interagency

Advisory Group of Federal Personnel Directors—is

to ensure that federal employees in the area receive

the same level of career transition services, regardless of their employing agency. Funding was

provided by the Department of Labor through the

Job Training Partnership Act. Services provided

include:

• resume and job application preparation,

• on-line job search and software services,

• transition counseling,

• retirement and financial planning,

• career transition library,

• self-assessment tools, and

• workshops and seminars.

Center clients are federal employees with a

Certificate of Expected Separation or a Reduction

in Force notice and federal contract employees with

equivalent notices. The Center augments—but

does not replace—services provided by individual

agencies through their career transition centers.

Reemployment Priority Lists. Within the federal

government, agencies maintain Reemployment

Priority Lists which provide priority consideration

for hiring “RIFed” employees over other outside

applicants for open positions. This program is

maintained locally on a commuting area basis.
53

Vice President of the United States

AL GORE

APPENDIX D:

AGENCY CONTACTS AND

OTHER SOURCES

Many individuals and organizations can provide

valuable assistance as you and your organization

move forward in improving your downsizing

process. Listed below are phone numbers,

addresses, and e-mail locators (where available) for

the organizations represented in this study and

some other helpful points of contact.

BENCHMARKING STUDY TEAM

Department of Commerce

Loren Casement

Phone: 202-482-1580

E-mail: lcaseme1@doc.gov

Department of Defense

Office of the Undersecretary of Defense

(Comptroller)

Ron Massengill

Phone: 703-697-1196

E-mail: massengr@ousdc.osd.mil

Department of Defense

Civilian Assistance and Re-Employment (CARE)

Division

Philip Demarais

Phone: 703-696-1799

E-mail: philip.demarais@cpms.osd.mil

Department of Defense

Office of Economic Adjustment

Robert Warren

Phone: 703-604-2400

E-mail: warrenrj@acq.osd.mil

Department of Defense

Office of Assistant Secretary of Defense (Force

Management Policy) Community Support Policy

James Ellis

Phone: 703-614-3260

E-mail: ellisj@pr.osd.mil

Department of Education

David Murray

Phone: 202-401-8545

E-mail: david_murray@ed.gov 

Department of Energy

Girtha Burks

Phone: 202-586-5284

E-mail: girtha.burks@hq.doe.gov

Department of Energy

Office of Worker Transition

Lewis Waters

Phone: 202-586-4010

E-mail: lewis.waters@hq.doe.gov

Department of Labor

Linda Nivens

Phone: 202-219-7357

E-mail: lnivens@dol.gov

Internal Revenue Service

Susan Lehotsky

Phone: 202-874-6411

E-mail: susan.lehotsky@ccgate.hq.irs.gov

National Aeronautics and Space Administration

Craig Conlin
SERVING THE AMERICAN PUBLIC:

54

Department of Veterans Affairs

Robert Page

Phone: 202-273-5137

E-mail: pagebob@mail.va.gov

OTHER SOURCES

National Performance Review

Wilett Bunton

Phone: 202-632-0150

Internet: www.npr.gov

Inter-Agency Benchmarking and Best Practices

Council

Internet: www.va.gov/fedsbest/index.htm

Office of Human Resources and Education

Phone: 202-358-1180

E-mail: craig.conlin@hq.nasa.gov

Social Security Administration

Maynard Malabey

Phone: 410-965-1452

E-mail: maynard.malabey@s3abc8.ssa.gov

Social Security Administration

Lette Weinrich

Phone: 410-966-8235

E-mail: lette.weinrich@s3abc8.ssa.gov
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