Summary: Testimony was given concerning reductions in force (RIF) in the federal government. GAO noted that proposed 1985 regulations take into consideration the last three annual performance ratings in granting additional service credits for performance. GAO noted that: (1) many weaknesses occur in the objectivity and accuracy of performance appraisals; (2) the new RIF regulations may put added stress on appraisal systems; and (3) written performance standards often do not contain objective criteria for measuring employee performance. GAO found that: (1) when all quantifiable costs were considered, six out of eight RIF were not cost-effective; (2) attrition tended to be a cost-effective strategy when the rate of attrition in the jobs affected by the RIF was high; (3) the result of RIF to the retirement system may be long-term savings, but the extent of the savings depends on factors that cannot be accurately predicted; (4) new RIF regulations limit the number of grades an employee can be reduced; and (5) women and minorities were disproportionately affected by RIF overall. GAO believes that: (1) RIF should not be considered to be an agency's most cost-effective way of saving money or reducing personnel levels; (2) attrition or furlough may be feasible and more cost-effective; (3) the limits placed on downgrading will tend to cause higher graded employees to be separated; and (4) there is no clear answer as to whether a governmentwide placement program would be effective.
