Problem: The complexity of the classification system and inflexibility of the personnel regulations makes government operation inefficient. Proposed solution and evaluation: There is strong evidence that agencies given authority to do these things themselves can do better. Using demonstration authority under the 1978 Civil Service Reform Act, several agencies have experimented with simpler systems. In one experiment, at the Naval Weapons Center in China Lake, California, and the Naval Oceans Systems Center, in San Diego, the system was simplified to a few career paths and only four-to-six broad pay bands within each path. Known as the "China Lake Experiment," it solved many of the problems faced by the two naval facilities. It: 1. classified all jobs in just five career paths--professional, technical, specialist, administrative and clerical; 2. folded all GS (General Schedule) grades into four, five, or six pay bands within each career path; 3. allowed managers to pay market salaries to recruit people, to increase the pay of outstanding employees without having to reclassify them, and to give performance-based bonuses and salary increases; 4. automatically moved employees with repeated marginal performance evaluations down to the next pay band; and 5. limited bumping to one career path, and based it primarily on performance ratings, not seniority. Another demonstration at McClellan Air Force Base, in Sacramento, California, involved "gainsharing"--allowing employees to pocket some of the savings they achieved through cooperative labor-management efforts to cut costs. It generated $5 million in productivity savings in four years and saw improved employee performance; fewer grievances; less sick leave and absenteeism; and improved labor-management relations. A third demonstration at more than 200 Agriculture Department sites tested a streamlined, agency-based recruiting and hiring system that replaced OPM's register process. Under OPM's system, candidates are arrayed and scored based on OPM's written tests or other examinations. In USDA's demonstration, however, the agency grouped candidates by its own criteria, such as education, experience or ability, then picked from those candidates. A candidate might qualify for a job, for example, with a 2.7 college grade point average. Agencies could create their own recruitment incentives, do their own hiring, and extend the probationary period for some new hires. Managers were far more satisfied with this system than the existing one. Citation: 1993 National Performance Review, Chapter 1. Keywords: personnel efficiency