The national agreements between the U.S. Postal Service and two of its unions give the Postal Service greater flexibility to use non-career employees for clerk and mail handler duties. The Postal Service pressed for the new employee categories in its separate labor negotiations with the American Postal Workers Union (APWU) and the National Mail Handlers Union, because it wanted greater workforce flexibility in scheduling and aligning employees with the work available. The Postal Service expects this will allow it to reduce labor costs, which currently make up about 80 percent of total costs.
With the APWU, the Postal Service has already begun to utilize the two new employee categories created under their National Agreement, which include postal support employees and non-traditional full-time employees. The provision on new employee categories in the National Mail Handlers Union’s agreement does not take effect until August, but it will allow for similar type of workers to be used. These workers will start at a lower hourly wage and will have limited benefits.
The number of Postal Service career employees has declined steadily over the past decade. As of early 2013 the Postal Service had just over 500,000 career employees, down from 729,000 in Fiscal Year 2003. Recent buyout offers have spurred a wave of retirements and moved the Postal Service closer to its goal of further reducing its workforce by 150,000 employees by 2015. Unlike previous reduction-in-workforce efforts, the Postal Service now has the flexibility to hire part-time employees. By shifting more work to lower-paid employees with less expensive benefits, the Postal Service is hoping to move the needle on its labor costs.
A recent OIG audit report on the use of part-time employees in processing operations found that the Postal Service is increasing its use of these part-time positions, but it has not hired them to the fullest extent allowed by the contract. It could have saved more than $30 million in labor costs last year if it had hired postal support employees up to contract limits.
Time will tell if the new workforce flexibility significantly reduces labor costs. But our early audit work suggests savings are available. What is your experience with the changes in the types of employees and how they are used? Is mail processed as efficiently, more efficiently, or less efficiently using postal support employees and non-traditional full-time employees? Have there been any unexpected effects (positive or negative) of the changes? Has overtime usage increased or decreased as a result of using part-time and non-traditional full-time employees?Read More
U.S. Postal Service employees are covered by the Federal Employees’ Compensation Act (FECA), which provides workers’ compensation benefits to civilian federal employees who sustain work-related injuries or an occupational disease. The U.S. Department of Labor Office of Workers Compensation Programs (OWCP) administers workers’ compensation and provides direct compensation to providers, claimants, and beneficiaries. The Postal Service later reimburses OWCP in what is known as “charge-back billings.”Read More
It happens many times . . . a company invests time and money into training employees only to have them leave soon after the training is complete. Some industries and companies now have contractual agreements requiring employees to repay training costs to their employers if they separate from employment before a specified period. Congress has also passed legislation requiring continued service agreements from government employees who have received extensive training.
These contracts obligate employees to continue working for the agency (or another government agency, depending on their employer’s policy) for a period at least equal to three times the length of the training. If the employee leaves government service before the agreed-upon service time, the agency has the right to require repayment for the amount of time not served.
Private sector industries such as information technology, airline, and trucking are also requiring employees to sign these types of agreements. One company requires employees to sign contracts for training programs that are considered expensive and time intensive. The company uses a formula that equates one month of labor for every $1,000 of costs; for example, a $7,000 course would require a seven month commitment.
Consumer needs for postal services are changing quickly resulting in the U. S. Postal Service developing a plan to right size the workforce. New Postmaster General and CEO Pat Donahoe announced on March 24 that the Postal Service plans to enact the Reduction in Force (RIF) and Voluntary Early Retirement (VER) processes with the goal of eliminating 7,500 administrative, supervisory, and postmaster positions. Additionally, the Postal Service will cut the number of vice president level officers by 16 percent and eliminate the senior vice president position.
Since 2007, the Postal Service has sponsored a number of recruitment and retention initiatives. One initiative identified critical needs in finance, supply management and engineering. Other efforts included the revamping of the Corporate Succession Planning process and the formation of a Leadership Development and Talent Management group in Human Resources.
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.
What’s the best way to encourage good performance? Employers have always struggled with this question. One answer is to pay employees based on how well they perform their jobs. Many private sector employers have adopted pay-for-performance (PFP) programs, and several federal agencies have also experimented with PFP. Some federal PFP programs have operated successfully for many years; others have been more controversial. Last year, Congress terminated a PFP program at the Defense Department. Employees complained that the program was arbitrary and lacked transparency. Clearly, designing a successful PFP program is not always easy.
The Postal Service adopted an annual PFP program in 2003. PFP is the only source of annual pay adjustments for Postal Service non-bargaining employees. Employees and their managers review targets and expectations at the beginning of the year. During the year, managers provide feedback to employees through mid-year performance reviews. Then, at the end of the year, employees receive a rating.Read More