• on Mar 24th, 2014 in Labor | 7 comments

    When long-term, experienced workers leave companies, they take their know-how with them. It’s called “brain drain” and it happens at organizations of all sizes and kinds, most notably companies with a large number of baby boomers getting ready to retire and industries that are restructuring. The newspaper industry comes to mind, as does manufacturing, as does the U.S. Postal Service.

    Since 2004, the Postal Service has reduced the number of career employees by more than 200,000, primarily through attrition, early retirement incentives, and some contractual changes. This is part of its ongoing effort to right-size its workforce to better match the number of employees with a declining workload. Many of those who left were seasoned workers who took with them a wealth of experience and knowledge essential to running a vast and complex organization.

    Given that nearly 31 percent of current employees are eligible to retire now, and Postmaster General Patrick Donahoe plans to shrink the workforce by 10,000 positions in fiscal year 2015, it’s likely this brain drain will continue for a number of years. Is the Postal Service adequately prepared for this loss of institutional knowledge? What more could it do to ensure it has a comprehensive approach to collect, maintain and disseminate this information?

    Our recent audit, Postal Service Knowledge Management Process, looked at the subject and determined the Postal Service could do more. Notably, by mimicking the best practices of eight large organizations we reviewed, including the General Services Administration and Walmart, the Postal Service would be able to ensure important knowledge and expertise stay within the organization. These practices include conducting exit interviews aimed at gleaning key information; designating a knowledge management officer; developing knowledge maps that offer visual representations of the organization’s pockets of expertise; and conducting mentor-based training.

    Are you concerned about the flight of human capital from the Postal Service? Do you think it should do more to preserve the knowledge of its most experienced workers? What are your ideas for the Postal Service to retain and share valuable knowledge and expertise? 

  • on Jun 6th, 2011 in Labor | 24 comments
    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.

    The U.S. Postal Service employs approximately 40,000 maintenance craft employees to work in a variety of assignments. Some of these assignments, such as maintenance mechanics, require specific training at great cost to the Postal Service. For example, one training course lasts 13 days and costs $3,325 per employee.

    Should employees receiving specialized training sign contracts to remain with the Postal Service for a specified period so that the cost of providing the training can be recouped? Should employees who received training be permitted to leave for more lucrative positions in the private sector as soon as they are certified without compensating the Postal Service? Should such restrictions apply to all Postal Service employees who receive specialized training?

    This blog is hosted by the Office of Audit's Network Processing team.
  • on Feb 22nd, 2011 in Labor | 35 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] A [/dropcap]sk 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. 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.

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