Ask postal employees about the Postal Service’s Pay-for-Performance (PFP) program and you’ll hear a wide range of opinions as to why they think the program is not working. Many believe the program is unfair and can be subject to manipulation,
The IBM Center for The Business of Government, Dr. Carl DeMaio, president of the Performance Institute, Dr. David Norton, president of the Palladium Group and co-founder of the Balanced Scorecard Collaborative, and organizational performance guru Jay Schuster cited the Postal Service’s PFP program as a model because it links individual contributions to organizational success. According to Postal Service officials, the PFP program’s foundation is a balanced scorecard of objective, independently verifiable measures of service, employee engagement, and financial performance. Performance indicators are measured at national, district, business unit, and individual levels. In its 2010 Comprehensive Statement of Postal Operations and Annual Report, the Postal Service stated the PFP program continued to drive organizational achievement as measured by a 2.2 percent increase in Total Factor Productivity (TFP) in 2010 compared to 2009.This marked the ninth year of positive TFP growth since 2000. The current PFP program evolved over a 12-year period and became the only basis for annual salary increases and lump sum awards for executive and administrative employees beginning in 2004. In implementing its PFP program, the Postal Service joined the ranks of many private sector firms where pay for performance is a standard feature for management and executives.
Loading ...In September 2010, many readers commented on our blog about the Postal Service’s PFP program. Comments expressed various opinions and perspectives about the program. Some said the PFP program is “broken” because it’s easy for postal management to manipulate. Others say PFP would be a great thing if the goals were reasonable and within the control of the manager. Many suggested scrapping the program altogether for a variety of reasons. For example, some said established goals are unrealistic and are changed often throughout the year so you end up chasing a moving target; others that the reporting system has no accountability factor and results are falsified; and still others that the ratings are changed or manipulated even when goals are achieved so that you get less of a raise.
The OIG plans to initiate a review of the Postal Service’s PFP program. We would like to hear more about your thoughts on the subject.
This topic is hosted by the OIG’s Human Resources and Security Audit Team.
35 Comments
Leave a Reply
PFP is a waste of everyone’s efforts. Higher management uses PFP to hold our pay hostage base on performance measures that we don’t even control. And in the end can use it against us in a RIF situation.
Give me back my COLA and my step increases.
Like or Dislike:
2 
0
Sirs, I have been a postal employee for 30+ years as a carrier and have also worked on the managerial side both before and during my postal employment.
The PFP Program, on paper, could be used as an effective tool to enhance productivity in any workplace environment.
However, and this is the balance point, it has to be implemented and unilized with objectivity, responsibility and, most importantly, accountability.
This is where the Postal Service fails. There is no visible accountability that the USPS holds ti’s managers and administration to at seemingly any level. Without honesty and integrity how does anyone establish goals? How can paperwork (ie the numbers, which emloyees have grown to hate) be used to establish financial parameters when they are inaccurate from the bottom up and then, by logic, the top down?
What kind of and where can the “foundation” be established if no one is checked for veracity and held accountable?
My opinion is that the the system is fraudulent from the bottom up as the reporting figures are frequently “made to fit” and there is no accountability system in place for management.
Human nature being what it is mandates accountability and the USPS seems to feel it can bypass this segment of managerial philosophy.
I have seen much “bypassing” of regulations in 30 years and consider it the ongoing effects of having a monopoly and the negligence of Congress.
We are a backwater in terms of the advances that business has made, not recognizing, or maybe not wanting to, that we have taken a wrong turn down a dead end alley.
Like or Dislike:
2 
0
Problems with Pay for Performance
• Not tied enough to the success of the business
• Budgets are a high percentage of calculation and budgets are unrealistic based on expectations
• Budget adjustments are often made based on flawed, unsound, or unproven assumptions such as some BPI calculations
• PFP goals, targets, and methodology are never provided or explained until after the start of the fiscal year and those trying to attain the goals often start off in the hole because of this (untimely)
• PFP targets are not “SMART goals” because “exceptional performance” is often mathematically unattainable
• Based on the acceptable error rates of mail processing equipment sustained exceptional performance is mathematically impossible
• Weather and other factors that are not within the control of Postal personnel play a greater role in performance than anyone is willing to admit
• NPA goals and core requirements often to not align with an employee’s particular job functions
• Ratings are manipulated and arbitrarily reduced to avoid high raises
• Some job positions have ridiculous core requirements that cannot be measured
• Communication skill is entirely too subjective
• The percentage of your corporate goal and unit goal is arbitrary and once the core requirements are factored in on top of that, exceptional contributor is almost impossible to attain
• It is difficult, if not almost impossible to access a really poor employee, in a good office, a non-contributor rating (which they may deserve)
• Really hard working employees do not get what they deserve if they happen to be in a poor unit or office
• It has been known to sometimes drive the wrong behaviors
• When you chase a 1000 rabbits, you will catch none – the system has been overcomplicated with too many targets
• EAS gave up their COLA increases for PFP and it has continually been mis-characterized by many as “Bonuses”
• NPA reports and calculations lag too far behind the monthly cycles
• VOE will never have accurate or true results as long as it is a part of the NPA calculation and therefore is a waste of both time and money
Like or Dislike:
0 
0
As a supervisor I tried to give one of my employees a rating of 9 which is a contributor … I spoke to my manager and the plant manager prior to submitting it for their approval. They both agreed with my rating and they approved it on his PFP. During the approval process someone higher up in the Area Office, who does not even know this employee, lowered his rating to a 6 No one in this building was ever notified that this rating was reduced. This employee ended up getting a lower PFP score than the other employees in this department. This employee goes above and beyond of what is expected of him. How can I justify and expect this employee to continue to perform when they are denied what I feel was a fair rating. This is not Pay for Performance but Pay for what someone in the Area Office wants to give you.
Like or Dislike:
1 
1
The PFP is not a fair system. For example: We were all give the same goals -get the mail out by 2:00 for XX percentage of the time. Our manager decided to cut hours that year, which was not one of our goals for PFP. He raped the workforce down to minimal, without enough employees to operate the machines. At the end of the year he had saved 200,000 man hours, but this left no employees there to get the mail out on time and we did not make our goal. No one got a raise, except, of course him. He was praised and promoted.
Like or Dislike:
2 
0
The goals for PFP do not reflect real, meaningful performance – just look at PMG Potter’s $119,000 bonus while the Postal Service lost billions.
Or all the effort made to raise EXFC scores to achieve goals without actually providing good service. Extra effort is made to get out originating mail, but little effort is made to get out delayed mail or just delay the first class mail by marking it as ‘non-committed.’ Just because a customer paid the postage with a permit does not give management the right to delay processing the mail.
Like or Dislike:
1 
0
Is there a better system other than PFP? I do not know but same happened all over where when you achieve something, ratings are being lowered. On the other hand, lazy people in district and administrated offices get the higher rating because they keep sending emails with cc to the postmasters and as a supervisor/manager we work for their goals. At the end we do not achieve any of the goals because of no control over resources but the ones sitting in cubes made theirs because we were forced to be in compliance. I can go on and on….. I think OIG should interview volunteers in the field and keep anynomous on their papers. They will hear alot more.
Like or Dislike:
0 
0
9 Essentials for a Successful PFP Program
1. Employees have a direct impact on their bonus.
The majority of PFP programs base an employee’s bonus on factors that they cannot control. The highest impact PFP programs directly reward the employee on their individual performance.
2. Daily reporting.
Daily reports give employees, supervisors and managers vital performance information. An employee should know where he or she stands on a daily basis.
3. Production goals are set at a fair, achievable level.
Setting production goals is a critical aspect of rewarding. Production goals need to be achievable and motivating.
4. The PFP Program does not reward the status quo.
There should not be an increase in employee pay without an even greater increase in productivity.
5. The system should be automated with technology.
The tracking and management of a comprehensive PFP system can be quite complex. This complexity can be greatly reduced by automating the business processes with technology.
6. Productivity constraints are identified.
Some productivity issues are beyond the employee’s control. These issues should be factored into the PFP Program and accounted for so employees remain empowered.
7. Work type variances are incorporated.
It is vital that a PFP Program accurately incorporates the labor requirements for varying types of work. If work projects are just averaged, this can lead to favoritism in the work place. An effective PFP program generates the same bonus for the same amount of effort across all projects.
8. Bonuses are individualized as much as possible.
The PFP Program should bonus the individual or small work team to maximize the effect of the program. Bonuses based on large teams do not motivate the high producers as much, thus lowering the overall effectiveness of the program.
9. Employees are trained on the PFP Program.
It is vital that management and employees understand and embrace the PFP Program. If they do not, then it will struggle to gain traction.
Like or Dislike:
0 
0
Pay for performance is not the solution especially the usps is in the deep financial trouble.
Does our competitor lie UPS and FED ex still trive without such program.
Do you know why? because their supervisor check every container for mistake otherwise they will be removed from the job.
what about the usps supervisor?
I remember the true story about see’s candy nightmare happened somewhere in pacific area.
the usps supervisor forgot to unload the whole truck load of candy from the truck in summerday and made almost $150,000 damage to the usps,but he still have a job and promoted,I am sure you know what i am talking about.
PFP or prp whatever the program will not going to be succeed as long as the management is not held accoutable for their duty and keep getting the bonus even if the organization going to downhill.
my conculusion for the PFP is a disease for the usps the future!.
Like or Dislike:
2 
0
How can you give bonuses to the people who have no productivity? The only way they look good is to motivate the workers below them. For carriers,what incentive do you have to perform better when your reward is an addition to your route? As usual it’s us against them.
Like or Dislike:
3 
0
PFP program has created a serious safety hazard in the lack of prevented maintenance for the postal service.No one wants to spend the necessary money to maintain our equipment or facilities because it may affect thier bonuses.
Like or Dislike:
1 
0
I believe that any of these type of measurements left in the hands of the people it will affect will always be manipulated. Most of the goals are arbitrary. Most of the measurement points go on SPLY (Same Period Last Year) which changes with every day of a new calendar year. (eg. 1st of January is on a different day of the week than last year). I have seen this work in the field where they reduce staff to make the quota this month then can never make the quota again because of permanent understaffing of operations which result in realignment of operations because of this flawed system. I believe that COLA and step increases work best and I believe that Pay for Performance reduces the availability of the Postal Service to replenish some of the fiduciary revenue for our Nation like the original system set up by former Postmaster Generals. The whole reason the Postal Service is here is because it is Constitutionally mandated that the Government provides a safe mailing system for its citizens. All these changes are subtle attempts to make this a Wall Street ran corporation and we all have seen how reputable they are. I would like to see our overages at the end of our fiscal year reduce our Government’s deficits.
Like or Dislike:
2 
0
WHY EVERY TIME I TRY TO VOTE ON ONE OF THE oigS TOPICS THEY SAY I ALREADY VOTED?
pfp CAN AND IS EASY TO FIX. i SAW HOW EASY IT WAS.
Like or Dislike:
1 
1
Integrity in the system is totally missing. This system is not PFP but a way to shift performance or non performance however the AREA finance department wishes. I have documentation showing specific lower performing districts receiving budget savings from high performing districts. The question is Pay for who’s performance. The performance ratings are not equitable when arbitrarily changed by Managers to stop the employees from achieving a rating for a fixed goal. Ratings are changed and the employee is never informed of the change. This system is being manipulated and abused and it is for the gain of the Executives and their operating budgets and total Area performance. I would like to be part of any OIG investigation and can provide specifics if needed. This needs to be addressed. How can I contact the Investigator?
Like or Dislike:
0 
0