So much of a federal employees pay is locked into "benefits". This includes ridiculous "Cadillac" health care plans. Reduce the max amount that employees can receive for health care. Make the health plans differ in cost. If you smoke or are overweight, you should pay more than an employee making an effort to lower their cost by being healthier.
Federal Employees get 13 sick days a year. Decrease those sick days by 2 or 3 a year.