Federal managers use outdated and ineffective tools to assess the talent of job applicants, giving rise to the widespread hiring of workers whose skills are poorly matched to their duties, according to a report released yesterday.

The 20-page report by the Partnership for Public Service, a nonprofit group that wants to entice talented people to government service, said bad federal hiring methods lead to lower productivity, increased employee turnover and higher rates of absenteeism. The resulting inefficiency costs the government at least $150 million annually, the group said.

In preparing its report, the group interviewed federal managers and private-sector human resource experts, and reviewed studies of hiring techniques in federal and business workplaces.

Max Stier, the group's president, praised the Bush administration's efforts to address the most common complaint about the hiring process -- that it can drag on for six months or longer -- but said that it is not enough.

"You want to see hiring done fast, but more importantly, you want to see it done well," Stier said in an interview. "And an area that has received virtually no attention to date is how well the federal government is actually choosing talent for the jobs it needs to fill. . . . Unfortunately, what we found is that the federal government predominantly uses the worst means possible for determining the right people for jobs."

Finding the right applicants is increasingly important. As much as half of the 1.8 million-strong federal civilian workforce will be eligible for retirement over the next few years. Agencies have hired an average of more than 100,000 employees in each of the past three years.

At a panel discussion on the report yesterday, Ronald P. Sanders, an associate director at the Office of Personnel Management, said the report provides an important road map for improvement. But he cautioned that there is no one-size-fits-all remedy for the government's hiring problems.

The report criticized agencies for ranking job candidates using systems that award points based on the applicant's self-reported education and work experience. Such systems are vulnerable to applicants who exaggerate their credentials, the report said. They also give little weight to the quality of the work experience or the education, and are poor predictors of performance.

The report criticized the Administrative Careers With America test, which is used in making less than 15 percent of new hires, as being rife with questions that have little connection to job duties. Prospective park rangers, for instance, are asked whether they have ever worked as a professional journalist.

The government adopted the test 23 years ago to settle a lawsuit brought by minority job seekers who challenged the previous written test as discriminatory. Stier said that the test is not working and that agencies have the flexibility to screen applicants in other ways.

Stier's group advocates revamping hiring processes by identifying the skills needed to perform specific jobs, testing applicants on those skills through written exams and role-playing, and conducting "structured interviews" in which all job seekers are asked a set of questions that target certain skills.

Some federal agencies already use such tools, the report noted. For instance, prospective call-center workers for the Internal Revenue Service must field simulated live telephone calls from taxpayers for an hour as part of the application process.

Sanders, the OPM official, noted the higher cost of such tools. He said the best approach might be a blend. Agencies could use the ranking system to winnow the hundreds or thousands of applicants for a given position down to a few dozen, then devise more precise ways to evaluate those who make the cut, he said.

"There are some very powerful tools there," Sanders said. "But you can't use these tools for thousands; you've got to use them for dozens."