Cost-Effectiveness of Alternative Strategies for Cut-Back Management

A recent symposium appearing in Public Administration Review, which explored organizational decline and cutback management, addressed an issue that seems to have grown in importance since the early 1970s.1 Despite the proliferation of organizational cutbacks, however, relatively little is yet known about their dynamics and administration.3 The authors' experience with the State of New York, which underwent a series of organizational retrenchments during this era, suggested that public administrators had come to rely on layoffs as a standard operating procedure for accomplishing reductions in force, or worse, had come to equate the concepts of reduction in force and layoff and, as a consequence, did not even consider alternatives.4 The purpose of this paper is to compare the cost-effectiveness of the two principal strategies for accomplishing a reduction in force; namely, layoff and attrition. The data presented were gathered as part of a research program which provided policy guidance to a state-level, labormanagement committee' mandated to explore and institutionalize alternatives for accomplishing future work force reductions, and to develop action programs to restore more than 10,000 employees laid off in the early 1970s to suitable jobs.