download Chapter 6 in PDF format (179k)
Chapter 6: Aligning People with Progress: Building a 21st Century Postal Service Workforce Source: Postal Commission Final Report on USPS
Table of Contents
• Introduction
• Background
• The Postal Service Pays More than 76% of its Revenues to Employees
• Improve, Rather than Overhaul, Tools Available to Manage Workforce
• Toward More Constructive Collective Bargaining
• A New, Time-Sensitive Approach to Arbitration
• Making the Collective Bargaining Process Work Better
•
Comparability
Must Cover Total Compensation
•
Compensation Premium Debate Requires
Independent Resolution
•
Comparability Analysis Should Bind
Labor Negotiations
•
Addressing Significant Retiree
Benefit Obligations
• Postal
Service Owes the Public Complete
Transparency
•
Taxpayers, Not Ratepayers, Should
Finance Military Pensions
•
Building an Incentive-Based Culture
of Excellence
•
Reducing Grievances
•
Pay-for-Performance Incentives
•
Executive Compensation
•
Rein in Workers’ Compensation Liabilities
•
Management Ranks Need to be Thinned, Too
•
Conclusion
•
Chapter 6 Recommendations*
• Dissenting Statement of Commission Report by Commissioner Norman Seabrook
As valuable as the Postal Service is to the nation, its ability to deliver that value is only as great as the capability, motivation and satisfaction of the people who make the daily delivery of the mail to virtually every American home and business possible. Their desire to make the modernization of the nation’s postal network a success, along with their willingness to make possible the Postal Service’s ambitious goals to rein in costs while improving productivity and service, will in no small part determine the success or failure of the entire transformation endeavor and, ultimately, the fate of universal service at affordable rates.
A new collective bargaining process that brings management and employees together and places a premium on constructive and timely resolutions, more businesslike flexibility that permits the Postal Service to address mounting benefits liabilities, and a new commitment to making all employees vested in the enterprise—all these steps can help bring under control the extraordinary costs of the Postal Service’s national employee base. This result can be achieved without turning to ratepayers or sacrificing the Postal Service’s commitment to compensating its employees comparably to the private sector.
If the Postal Service proves capable of focusing its mission and purpose, its workforce must be no larger than necessary and committed to facing the realities of declining mail volumes and revenues. In this area, its strategy must be two-fold: minimizing the risk to taxpayers and ratepayers, and realigning the workforce to the realities of a leaner Postal Service without sacrificing service. A lean, motivated and strategically deployed workforce is essential to this equation.
Equally important is the potential of technology, even amid such a challenging transition, to propel the Postal Service to a new standard of excellence. return to Table of contents
|
Chapter 6 Recommendations* W–1. Developing an Appropriately-Sized Workforce. As the Postal Service works meet the challenges of the 21st century, it must develop a world-class workforce appropriate to fulfilling its universal service obligation. Fortunately, the Postal Service will soon be presented with a unique attrition opportunity with some 47% of current career employees eligible for retirement by 2010. The Postal Service is urged to take full advantage of this attrition opportunity and to exercise maximum discipline in its hiring practices in order to rightsize and realign its workforce with minimal displacement.W–2. Collective Bargaining: Process Improvements. The collective bargaining process should be retained. However, the collective bargaining process should be improved to create additional incentives for the parties to reach negotiated settlements, and, when the parties fail to reach a negotiated settlement, to ensure that arbitration awards are made within a reasonable period of time. In particular, the collective bargaining process should be as follows: • Basic process. A negotiation process, beginning 90 days prior to the expiration of an existing agreement, followed by a 30-day mandatory mediation process and, if mediation fails, an immediate 60-day interest arbitration process.• Mandatory mediation and "Med-Arb." The 30-day mandatory mediation process would be conducted by a mediator who would become a member of the arbitration panel should mediation fail. The purpose of the mediation process would be to either reach a negotiated settlement or to narrow the range of issues to be submitted to interest arbitration.• Interest arbitration. The 60-day interest arbitration process would be conducted by a three-person arbitration panel comprised of three neutral arbitrators, one having served as the mediator. The interest arbitration process would incorporate the Last Best Final Offer mechanism and a 10-day period during which the parties would have a final opportunity to reach a negotiated settlement prior to the arbitration panel’s final award.W–3. Collective Bargaining: New Subjects. The Postal Service’s pension and postretirement health care plans should be subject to collective bargaining – meaning that the Postal Service and its unions should have the flexibility to develop new plans that are separate and apart from existing Federal pension and retiree health care plans. However, because of concern about the uncertain impact such a change would have on the Federal system as a whole and on other Federal employees in particular, the Postal Service should work with the Department of the Treasury, the Office of Personnel Management, and any other persons or entities deemed necessary to determine the impact separate Postal Service pension and retiree health care programs would have on the existing Federal systems. As a first step: • The Postal Service should be authorized to negotiate Federal Employee Retirement System eligibility requirements and employee contributions;• The Postal Service should be authorized to negotiate the eligibility and retiree contribution requirements for the post-retirement health care component of the Federal Employee Health Benefit Program, specifically for future Postal Service retirees; and• The current statutory requirement that "[n]o variation, addition, or substitution with respect to fringe benefits shall result in a program of fringe benefits which on the whole is less favorable to the officers and employees than fringe benefits in effect on [July 1, 1971]" should be repealed.W–4. Pay Comparability. The 1970 Act should be amended to clarify the meaning of the term comparability, and the new Postal Regulatory Board should be authorized to determine comparable total compensation for all Postal Service employees. In determining comparable total compensation, the Postal Regulatory Board should be authorized to determine the appropriate sector(s) of the private-sector workforce to be used as the basis of comparison. The comparability determination of the Postal Regulatory Board should be enforced as a cap on the total compensation of new employees. In addition, if the Postal Regulatory Board determines that a total compensation premium exists for current employees, it should be authorized to determine the appropriate period of time during which the premium must be eliminated, and to review periodically its initial determination and the Postal Service’s progress in eliminating the premium.W–5. Pay-for-Performance. Performance-based compensation programs are effective tools that, when designed correctly, can be used to align the goals of management and labor and result in improved efficiency and service quality. The Postal Service should undertake a careful study of performance-based compensation programs for both management and represented employees, and it should work with the unions and management associations to design and implement a performance-based compensation program that is meaningful to Postal Service employees and assists the Postal Service in meeting its productivity and service quality goals.W–6. Grievances. The current dispute resolution process must be revised if the Postal Service is to operate in accordance with the best practices of private-sector companies with highly unionized workforces. As a first step, the Postal Service should work diligently with its unions to implement best practice grievance procedures, including those recently implemented by the Postal Service and the National Association of Letter Carriers.W–7. Workers’ Compensation Claims. The Postal Service should be provided relief from the requirements of the Federal Employees’ Compensation Act as follows:• The Postal Service should not be required to pay benefits until after the expiration of a three-day waiting period;• The Postal Service should be allowed to limit benefits to 2/3 of the maximum weekly rate; and• The Postal Service should be allowed to transition individuals receiving workers’ compensation to the Postal Service’s retirement plan at such time as the employee would have become eligible for retirement notwithstanding the injury giving to the workers’ compensation benefits.W–8. Executive Compensation. The current statutory salary cap should be repealed. Further, the Postal Service should be authorized to establish rates of pay for officers and employees at levels competitive with the private sector. Performance should considered as a key component of senior executive pay.W–9. Management Structure. The Postal Service should restructure its management to eliminate redundant positions and geographical divisions and to standardize and clarify job functions. The Postal Service should conduct a review of the management structure, size, and cost to determine whether each component necessary and consistent with the best practices of the private sector, and it should require managers to justify their functions and the size of their staffs.W–10. Accounting for Retiree Health Care Obligations. The Postal Service should review its current policy relating to the accounting treatment of retiree health benefits, and work with its independent auditor to determine the most appropriate treatment of such costs in accordance with applicable accounting standards and consideration of the Postal Service’s need for complete transparency in the reporting of future liabilities. The Postal Service should consider funding a reserve account for unfunded retiree health care obligations to the extent that the its financial condition allows.W–11. Funding Military Service. Responsibility for funding Civil Service Retirement System pension benefits relating to the military service of Postal Service retirees should be returned to the Department of the Treasury.See Appendix C for a complete list of Commission recommendations. |
Appendix D: Additional Statement by Commissioner Seabrook
July 30, 2003
President’s Commission on the United States Postal Service
1120 Vermont Avenue, N.W.
Suite 971
Washington, DC 20005
Dear Commissioners:
I have reviewed the final recommendations to the Commission from the Workforce Subcommittee. I agree with recommendations 1, 6, 8, 9, 10 and 11. I disagree with recommendations 2, 3, 4, 5 and 7 for the following reasons:
I dissent from recommendation number 2 because it places artificial constraints on the bargaining process. Management and labor should be free to conduct arms-length bargaining and reach a decision through that process and the existing arbitration process. Cutting the time of the arbitration process to 180 days at the most is a worthwhile objective but is not the answer to the existing arbitration problem. The arbitration process takes too long because management often takes an unreasonable position. Adequate funding of the Postal Service as well as recognition of the financial and other interests of the employees is a better approach. Expediting an unfair process is not the answer.
I dissent from recommendation number 3 for the following reasons: Adding Postal Service pension and the postretirement healthcare plan to the collective bargaining process puts these benefits at greater risk than is the case for other federal employees. The benefits of federal employees in the existing structure grow out of a long history of federal budgetary considerations and legislative initiatives. While the benefits could certainly be improved, this recommendation does not have benefit improvement as an objective. Placing pension and retiree health benefits into a collective bargaining process and then constraining that process by pressuring for settlements within "180 days" creates an environment that may be potentially harmful to active and retired postal workers. I prefer that the benefits for postal workers be considered in the same way as other federal employees.
I dissent from recommendation number 4 because the operationalization of the concept is problematic. Pay comparability is a concept best applied when public employees’ salaries and benefits are not subject to collective bargaining. In a collective bargaining process, pay comparability inevitably enters any determination of salaries and benefits. However the dynamic of the bargaining process where management and labor meet on an equal footing and struggle through to a determination is quite different from an administrative process where "personnel types" organize groups of people into boxes of comparable worth and impose their view of a worker’s value. The former is an equitable approach. The latter is quintessential bureaucracy.
I dissent from recommendation number 5 for the following reasons: Pay for performance is a disguised way in which management can attack the strength of a union by dividing its members. "Pay for performance" as a concept seems unassailable because who could argue that people who perform better should be paid more? In practice, however, such systems are characterized by nepotism, favoritism and horrible morale among the workers. I challenge the subcommittee to demonstrate a successful pay for performance system in any large strongly unionized public organization.
Personnel evaluations, performance evaluations, employee rating systems, etc., all have some value but only as an integral part of an employee management system that includes a strong labor component, which in the final analysis balances the outcome in favor of objective performance.
I dissent from recommendation number 7 because it implies that workers’ compensation abuse is so rampant that a tested and respected system needs to be totally revamped to ameliorate the abuses. If one honestly believes that a worker has been injured and that the work-related injury must be subjected to an equitable process, these recommendations are troublesome. Only when read in the context of widespread abuse do these recommendations become logical. If the subcommittee assumes that there are abuses, the individual abuses should be dealt with in a detailed and aggressive way. However, encumbering an already difficult process by adding reduction in benefit payments and expedited retirements is unfair to the bulk of postal workers who are injured on the job.
In closing, I believe that recommendations 2, 3, 4, 5 & 7 require additional work by the subcommittee. Each of the recommendations focuses on an issue that we thought needed examination. However, the approach to the solution in my view is counterproductive and biased against the worker. The efficiencies enjoyed will be at the expense of the effectiveness of the employee and, therefore, the effectiveness of the organization. Under the circumstances, these issues should be left the way they are instead of changed by the recommendations brought by the subcommittee.
Thank you,
Commissioner Norman Seabrook