• 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.
  • on Feb 14th, 2011 in Finances: Cost & Revenue | 12 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] T [/dropcap]he Postal Accountability and Enhancement Act of 2006 requires the Postal Service to comply with specific sections of the Sarbanes Oxley Act of 2002 (SOX). Among other financial reporting requirements, SOX mandates internal control compliance – making sure that financial transactions are reasonably and fairly presented in the accounting records - and places the responsibility on postal management. A recent district-wide audit of 13 postal retail units found 80 internal control compliance issues related to stamp accountabilities, disbursements, and financial accounting and reporting. The cause for most of these issues was attributed to a lack of adequate training, the insufficient financial background of some unit managers, why they were placed in the position without receiving the necessary financial training, and an absence of oversight by the managers and supervisors responsible for implementing financial internal controls. Why do these managers lack the proper training and background to adequately supervise financial operations? One possibility is the amount of management turnover at retail units. The management turnover rate was high at some retail sites visited during the audit. For example, one retail unit had three different acting station managers in the last 18 months. Often, new or acting managers and supervisors come from different segments of the Postal Service and are placed in positions which require them to supervise financial operations. Is there a benefit for bringing in someone from a different segment to oversee the operations of a retail unit? How should they be trained? Please give your comments. The topic is hosted by the Office of Audit Field Financial – West team.
  • on Feb 7th, 2011 in Ideas Worth Exploring | 3 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] I [/dropcap]n recent years, a growing number of people have chosen to avoid crowded shopping malls by doing their holiday shopping online. To a certain extent, online shopping reduces their carbon footprint by keeping these individuals from driving to and from the store. However, their packages still have to be delivered. What if postal customers could choose to have carbon neutral delivery for an extra fee? In 2009, Itella, Finland’s postal service, introduced a program where customers could pay extra for carbon neutral delivery, adding the “Itella Green” marking to letters for less than a penny or parcels for around five cents. Itella achieved carbon neutrality through a combination of energy efficient delivery vehicles by funding reputable, environmentally-friendly projects. While Itella’s plans include increasing carbon efficiency in all three phases of the package delivery process: sorting, transportation, and delivery, the greatest carbon efficiency gains currently come from their shift to electric or fuel efficient delivery vehicles. On February 1 Itella made the cost of carbon neutrality a standard part of all postage, making it the first country to offer completely carbon neutral delivery. That way, when a customer uses Itella to send a letter, package, or direct mail, they know they are getting zero net emissions. Through their efforts, Itella has made carbon neutral delivery, a key element in developing a “green” reputation and an advantage in competitive areas like package delivery. Is offering carbon neutral delivery as a separate, specialized service that customers can purchase an idea worth exploring for the Postal Service? The Postal Service is already in the process of converting its delivery fleet to cleaner electric vehicles, making carbon neutrality easier to achieve in the coming years. Moreover, does it make sense to give consumers a choice in terms of the environmental friendliness of their mail delivery? Sources: Hellmail Itella This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

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