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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The concept of a pay for performance system is a great idea, but the way the Postal Service has implemented it has totally ruined it.

I am a postmaster in a level 11 office, and as it stands for FY11, I only have control of 10% of my NPA score-SOX. The other 2 I have no control over.

The revenue categoy has all of the level 11-16 postmasters lumped by POOM group. Last year my revenue was over plan by double digits, yet it was not reflected in my score. Why would a PM put forth extra effort knowing that they are not going to get credit for their hard work?

The other parameter-Total workhours to plan is unfair to a small office PM. The planned workhours for my office is 45x52-10 holidays. That is the minimum number of hours that I can use. By using this minimal number of hours, I can only be a contributer. The only way I can get a 15 for this is if I close my office for 8 hours a week, which we know is impossible.

The rest is the District numbers, which a small office has little control over- Like VOE scores and EEO. Both have nothing to do with a small office.

A small non-delivery office should have the following parameters, drilled to the office level, not the district or poom:
-PO Box rentals vs. SPLY (PO Boxes are the bread and butter for a small office)
-Retail revenue vs. SPLY (while factoring in rate changes). This will show if a PM is doing a good job in selling service to their customers
-TOE to plan
-Voice of the customer score. There are a lot of nasty PMs that the customers cannot stand who provide poor service.

As it stands now, PFP is doing the opposite of what it is supposed to.

isn't IBM Center for The Business of Government running the VOE?

when managers ONLY care about how much their PFP will be service suffers!!

do away with the PFP and get back to servicing the public!!!!

I am a front line supervisor for the USPS. (Customer Service/Delivery).

PFP runs contrary to every Generally Accepted Business Practice.

It rewards "Making numbers" over "providing Service" and that ultimately leads to both decreasing performance numbers as well as diminishing service.

Please allow me to explain.

First of all, performance goals are simple. "Beat SPLY." (Same period last year). The bar is set from last years budget and to heck with whether conditions change,
For example, A diminished workforce due to attrition. Exceptionally bad weather. A rash of injuries.
None of those factors are controlled by management.
To "make the numbers" thus becomes synonymous with reducing service to curtail delivery.

It also breeds a suicidal business model. Under present circumstances, supervisors and Postmasters ARE HAPPY when mail volume is light. (They'll make their numbers that day). When volume is heavy, they walk around in a sour mood. (Overtime, bad numbers).

Imaging the following two examples of this behavior happening in, say, a Pizza Parlor.
1) "How's business today Jonny?" Jonny says "GREAT! Look at this place! It's totally empty! I can save a lot of money by sending the workers home early tonight! I'll achieve my PFP goals today!" Or:
2) "How's it looking tonight Jonny?" Jonny replies "MISERABLE! All the tables are full of customers and there's a line all the way around the block waithing to come and eat here! I'll have to pay overtime today! There goes the PFP numbers!"

This is EXACTLY the same way postal managers think. It is also the exact opposite of basic business practices. It is unsustainable, destroys worker morale, and actually encourages decresed service.
Are we a business, or are supposed to be providing a service to our nations patrons?
United States Postal SERVICE."
The answer to that question is in our name.

Scrap PFP and just give us EAS employees 1.5% and a full COLA instead, unshackle us from this idiotic business model, and let us serve our Country's residents.

The people only want their darned mail, prefereably before dinner time.
Regards, EAS Ct.

The process stinks and is easily manipulated. This becomes really problematical when the results can be used against EAS during a RIF.

The program needs to go. Not only did my supervisor meet and exceed all of his objectives, the PM agreed, but gave him all 3's (non contributor) and one 4. As long as PM/MPOO/DM, etc do not like the person there are doing the review for, they will all lose. You could far exceed all of your goals, be able to back it up and prove it and because the PM has a beef with you, you get the shaft. The PM claims that he didn't receive a PFP raise either, but he happens to be buddy buddy with the MPOO, who I'm sure cut him a check out of the MPOO's slush fund. After all, that slush fund can be used for any reason without explanation.

Disgruntled in Granger

PFP creates tyrants. Do you realize that employees are being abused, all day, every day, verbally and mentally by supervisors trying to "make their numbers"? TE carriers are scared to death to take a lunch break and even bathroom breaks. They rely on an empty bottle. Employees are being yelled at and humiliated in front of other employees. My son, who is a 204b, received a VOE survey at his office. His boss wanted to sit down with him and fill it out. That is private. Supes are breaking the contracts and don't care about grievances. PFP causes quite a bit of resentment and hostility because they are the ones who actually do the work. Why can't management have step increases like craft? We need to create a sense of teamwork to save the PO.Top execs are pampering themselves. How much money do they need? It's not fair or feasible given our financial woes. We need to bring the PO back to the basics of delivering mail. They should ALL take pay cuts themselves and stop sticking it to us. We are a service, not a corporation.It should not be us against them. It should be all of us working together.

Goals are arbitrary...if the manager likes you you get easy goals & if they don't like you you get unachievable ones. One of our goals is "signature confirmation scan 98% and AAU scanning 100%". So if one parcel isn't scanned in the entire year I'm a non-contributor???

Another goal is that we are assigned 2 offices, and DPS percentage has to be raised to above 95% in BOTH offices YTD to be a contributor. My job has nothing to do with DPS. I'm not trained in how to increase DPS performance. The offices I am assigned have absolutely nothing to do with my normal job. PFP has become a way to assign special projects & deny us any type of raise whatsoever because we didn't do well with these pet projects.

Want to fix PFP? My goals should match my managers goals. And my managers goals should match his managers goals. Maybe if we were all pulling in the same direction we could achieve something.

Heard straight from a supervisor's mouth that it's a joke. No matter how good/bad you are, you still get it. So, what does that tell you? You can be the worst supervisor and work next to a good supervisor and end up with the same "bonus"

As a retired (35 yr) former postal manager, I view npa as the best system the postal service has come up with. That being said, it has it problems, strengths, weaknesses and misunderstandings. A great deal of work went into it to make it as fair and objective as possible. (Let the data speak for itself, use the data available to everyone). Your numbers might be bad, and they might not be right, but they are your numbers, you produced them. Most the the problems come from the fact that it all has to start with budget. Hq is going to budget $X for raises the next year, so everything has to fit into that number. So, we are going to drive performance, and reward performance within a budgeted dollar amount (and that's a big dollar amount, and a big job). The strength is the objective nature. While the objectives are scaled to National level on down and people often complain they have no control (and that is true) on good years you are rewarded with everyone (for what you feel you don't control) and on bad years the opposite. We don't complain on the good years (and that's only natural). I don't want to write a book. I think it is a good system and can only get better as worked on by managers at all levels and the management associations.

Retiree35 is a kool-aid drinker, obviously in bed with management. As a USPS employee, I can say that things turned south for this company when they implemented the PFP. Morale has dropped so low its almost embarrassing to say that you work for USPS. None of the rules make any sense in a reality based world.

Nostradamus made the most sense in these comments.

PFP is clearly manipulated. Just look around.

PFP is worthless. My goal and my staff's goals were sent us by the district. The results of the year's achievements were returned by the district. Input of those scores was arbitrarily changed to lower scores by the district. Recourse this year seems to work where it didn't previous years. It should be black and white.

I would tend to agree that the metrics of PFP are easily manipulated. My greater concern however is that the philosophical underpinnings of the program are fundamentally wrong.
The folks at Headquarters who devised and implemented this plan would like to think of the Postal Service purely in the context of a public company that engages in a purey profit making activity. While that has become a component of our model, the analogy doesn't work very well - especially when one is looking at management compensation models.
I'm a Level 13 Postmaster at the top of his salary scale. The metrics applied to me are, for the most part, either wholly out of my control or minimally within my control. The metrics chosen in any given year can lead to some perverse incentives, certainly at District levels. Finally, the evaluation and interview aspects of the program become a pro forma dance that becomes easily viewed with cynicism.
This past year I got a 2.5% raise as well as $4000 in a single payment. That seems incongrouous with the organizations financial status. Looking at the results for people senior to me I see some very troubling numbers. And the worst of it is, is that it is all arbitrary.
It is a poorly conceived and poorly administered system that creates perverse incentives while failing to recognize the essential nature of the organization.

Every job I have ever worked at has given me bonuses and promotions within a year of working there. I am known as a real go~getter; and when I started at the post office, they called me the Roadrunner, since I worked so fast. Other managers have even approached my manager to tell him how good my work is and how it positively impacts their departments. Have I ever gotten a PFP in 20 years? No, but 2 people who were the boss's informants have.
What kind of system is this? When I retire at the end of the year, I guarantee you I will be in an upper level position within a year of my new job. I hate to say I ever even worked for the post office; perhaps I will say I was a housewife...

I really does think that the PFP program should have ever been for the exec, admin. or eas... IT SHOULD HAVE BEEN SET UP FOR THE WORKING CLASS EMPLOYEES FOR THE USPS.. if you put these people ON the a workroom floor...you probably would want to pay them the mininum wage to work for you.. I FEEL THAT THE USPS problem is not recognizing the true blue source and backbone of the USPS is the working class...letter carriers/mailhandlers/equipment operators/clerks/custodians and dock clerks..not even supervisors should had given bonuses for the work of a working class employees that may the USPS... that is so sad.. why would i want to retire with some kind of incentive that i have earned and long overdue ...THANK YOU..

A PFP goal for maintenance is 100% preventative maintenance route completion.
We have been told "sign off on the work, as no one will be checking up behind you". They fail to assign work, and it is entered in as completed. They fail to properly staff, and work is completed "by the elves". We are given deadlines and "training credit" for completing mandatory on-line electrical safety courses, but are allotted no time to complete those courses.
The untrained are given deadlines to "refresh" each other in lockout/tagout, but are allotted no time to perform this "training".
Our PM route checklists are obsolete. I haven't seen anyone use a checklist in my 20 years as a maintenance employee.
Do you get the picture?

PFP is a good concept that has been executed poorly, especially in the past few years. Goals are often set far above present performance, to the point where they are unreasonable. If a goal is not attainable, why try? For example, the national goal is to have 95% of carriers back by 1700. When your office is only averaging 50% and the district average is 40%, this goal is likely unattainable with current staffing. A better goal would be an improvement, to 60% or 67%. Sometimes the goals I have been given to select from have had nothing to do with my actual job.

I believe that the system broke completely in FY 2009. At the end of that year, many supervisors and managers who made their goals had their PFP ratings lowered by their managers. Many of those who did receive the rating they earned from their immediate manager had their rating lowered by higher level managers. As a result, the majority of managers received no raise. While I understand that there were fiscal concerns, this was not the proper way to handle PFP, as it essentially broke the process and any trust in an accurate PFP.

PFP has been one of the devastating programs ever put forth by the USPS. Everyday I watch management harass, bully and intimidate workers in hopes that this will somehow get the worker to do more then they are capable of. This treatment goes against the statement of violence in the workplace and it is caused by set goals that are unrealistic to acheive yet supervisors crack the whip at craft workers and treat them with contempt, dignity and respect ? yeah right.

Purposely understaffed window positions to boost PFP numbers yet frustrate customers.
Carriers running around on overtime delivering 5 peices of mail to seperate ends of town to boost EXFC scores. This PFP process is out of control and damaging to the service.

lthough the current PFP program is better than the old EVA program, it is still subject to manipulation and favoritism. High level managers (District Managers, etc.) can change your rating and it appears that your direct manager changed it, so it is not transparent. If a higher level manager changes your rating, you should be able to see who changed it and why. That's why the ratings are so secretive right up until the effective date...they are subject to change, not based on merit/performance, but on the whim/favoritism of a higher level manager. The recourse process is a joke. All that does is brand you a "complainer" or "troublemaker". Transparency and fairness are the keys to a successful merit pay program.

Another thought...the recourse process should be a part of the initial ratings process. Discourse between employee and manager(s) should take place so any misunderstandings or misgivings could be worked out prior to the NPA effective date. The current process reeks of secrecy and favoritism.

PFP must go away, I am glad you guys are finally looking into our corrupt higher ups managers' work. My question is what are you guys going to do about it?

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.

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.

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

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.

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.

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.

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.

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.

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!.

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.

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.

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.



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?