U.S. Postal Service: New Delivery Performance Measures Could
Enhance Managers' Pay for Performance Program (10-SEP-08,
GAO-08-996).
The U.S. Postal Service (USPS) pay for performance (PFP) program
for managers includes quantitative performance indicators. PFP
ratings are the basis for salary increases and lump sum awards
for nearly 750 Postal Career Executive Service (PCES) executives
and about 71,700 other participants, mostly Executive and
Administrative Schedule (EAS) employees. GAO was requested to
provide information about USPS's PFP system. This report (1)
describes the key features of USPS's PFP system, (2) provides
information on the weight of its performance indicators in
determining PFP ratings, and (3) identifies opportunities for
USPS to incorporate delivery performance indicators into its PFP
system. GAO obtained USPS documents and data, interviewed USPS
officials, and primarily based its assessment on laws related to
timely delivery and interviews with senior USPS officials.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-996
ACCNO: A84097
TITLE: U.S. Postal Service: New Delivery Performance Measures
Could Enhance Managers' Pay for Performance Program
DATE: 09/10/2008
SUBJECT: Accountability
Customer service
Employee incentives
Employee promotions
Executive compensation
Internal controls
Pay for performance
Performance appraisal
Performance measures
Postal service
Postal service employees
Program evaluation
Program management
Quality improvement
Salary increases
Strategic planning
Mail transportation operations
Senior Executive Service
USPS Pay for Performace Program
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GAO-08-996
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
September 2008:
U.S. Postal Service:
New Delivery Performance Measures Could Enhance Managers' Pay for
Performance Program:
USPS Pay for Performance Program:
GAO-08-996:
GAO Highlights:
Highlights of GAO-08-996, a report to congressional requesters.
Why GAO Did This Study:
The U.S. Postal Service (USPS) pay for performance (PFP) program for
managers includes quantitative performance indicators. PFP ratings are
the basis for salary increases and lump sum awards for nearly 750
Postal Career Executive Service (PCES) executives and about 71,700
other participants, mostly Executive and Administrative Schedule (EAS)
employees. GAO was requested to provide information about USPS�s PFP
system. This report (1) describes the key features of USPS�s PFP
system, (2) provides information on the weight of its performance
indicators in determining PFP ratings, and (3) identifies opportunities
for USPS to incorporate delivery performance indicators into its PFP
system. GAO obtained USPS documents and data, interviewed USPS
officials, and primarily based its assessment on laws related to timely
delivery and interviews with senior USPS officials.
What GAO Found:
Key features of the PFP program are quantitative corporate and unit
indicators of performance and individual performance elements that are
used to rate participants and provide the basis for awards.
Quantitative performance targets are established for corporate and unit
indicators. Corporate indicators apply to all participants and include
measures of timely delivery, productivity, revenue, and net income,
among others. Unit indicators apply to selected groups of participants
and vary according to the groups� responsibilities and span of control.
Individual performance elements are tailored to the participant group
and, within some groups, to individuals. Individual performance
elements may be defined by narrative standards or may be quantitative
indicators defined with specific target performance levels. The overall
PFP rating is based on results of corporate and unit indicators and
individual performance elements and is used to determine the salary
adjustment and any lump sum award.
PFP indicators related to three USPS strategic goals�increasing
efficiency, improving service, and generating revenues�collectively
account for two-thirds of the average participant�s rating (see fig.)
However, indicator weights vary considerably by participant group,
based on the responsibilities and span of control of various positions.
Figure: Percentage of Overall PFP Rating, by Type of Indicator: Average
for All PFP Participants, Fiscal Year 2008:
This figure is a pie chart showing the percentage of overall RFP
rating, by type of indicator, average for all PFP participants.
Efficieny-related: 27%;
Individual performance elements: 24%;
Service-related: 22%;
Revenue generation: 17%;
Customer-focused culture: 10%.
[See PDF for image]
Source: USPS.
[End of figure]
As USPS implements requirements of the postal reform law for measuring
delivery performance, it will have opportunities to incorporate new
indicators into its PFP program, notably for timely delivery of
Standard Mail (49 percent of mail volume in fiscal year 2007) and bulk
First-Class Mail (25 percent of volume). Once new delivery performance
measurement systems are fully implemented and mailers� participation is
sufficient to generate representative data, USPS will be able to
incorporate new delivery performance indicators into its PFP program.
These new indicators would create a more �balanced scorecard� that uses
service performance metrics for the mail that is measured to support
personal and unit accountability.
What GAO Recommends:
The Postmaster General should incorporate new delivery performance
indicators into its PFP program�such as indicators that cover Standard
Mail and bulk First-Class Mail�once the necessary measurement systems
are successfully implemented, including the actions that mailers must
take to permit meaningful performance measurement. USPS agreed with the
recommendation and stated that it is committed to incorporating new
delivery performance measures into PFP.
To view the full product, including the scope and methodology, click on
[http://www.gao.gov/cgi-bin/getrpt?GAO-08-996]. For more information,
contact Phillip R. Herr at (202) 512-2834 or [email protected].
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Key Features of USPS's PFP Program Include Quantitative Performance
Indicators and Individual Performance Elements:
Overall PFP Ratings Primarily Depend on Results for Indicators Related
to Efficiency, Service, and Revenues:
Opportunities to Incorporate New Delivery Performance Indicators into
USPS's PFP Program Will Follow Implementation of Delivery Measurement
Systems:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Number of U.S. Postal Service Pay for Performance
Participants, by Employee Type, as of December 5, 2007:
Appendix II: Objectives, Scope, and Methodology:
Appendix III: Comments from the U.S. Postal Service:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Percentage Increase in Salary for PCES Executives Based on
Overall PFP Rating and Current Salary, Fiscal Year 2008:
Table 2: PCES Executive PFP Lump Sum Awards Based on Overall PFP
Rating, Fiscal Year 2008:
Figures:
Figure 1: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Average of All PFP Participants, Fiscal Year 2008:
Figure 2: Percentage Increase in Salary for EAS Participants Based on
Overall PFP Rating, Fiscal Year 2008:
Figure 3: Average PFP Awards for EAS and Other Non-PCES Participants,
Fiscal Years 2004 through 2007:
Figure 4: Average PFP Awards for PCES Participants, Fiscal Years 2003
through 2007:
Figure 5: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Average of All PFP Participants, Fiscal Year 2008:
Figure 6: Percentage of Overall PFP Rating, by Performance Indicator:
Average of All PFP Participants, Fiscal Year 2008:
Figure 7: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Full-Time Postmasters in EAS Levels 11 through 16, Fiscal
Year 2008:
Figure 8: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Postmasters in EAS Levels 21 through 26, Fiscal Year 2008:
Abbreviations:
EAS: Executive and Administrative Schedule:
EEO: equal employment opportunity:
EXFC: External First-Class Measurement System:
PCES: Postal Career Executive Service:
PFP: pay for performance:
USPS: U.S. Postal Service:
United States Government Accountability Office:
Washington, DC 20548:
September 10, 2008:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Tom Carper:
Chairman:
Subcommittee on Federal Financial Management, Government Information,
Federal Services, and International Security:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
To help accomplish its mission of providing prompt, reliable, and
efficient universal service, the U.S. Postal Service (USPS) has adopted
a pay for performance (PFP) program for managers that includes a number
of quantitative performance indicators. PFP ratings are the basis for
USPS's annual salary increases and lump sum awards for nearly 750
Postal Career Executive Service (PCES) executives and about 71,700
other participants, most of whom are members on the Executive and
Administrative Schedule (EAS), which includes postmasters, supervisors,
managers, as well as others who are ineligible for membership in a
postal labor union.[Footnote 1] USPS implemented its current PFP
program for PCES executives in fiscal year 2003 and for EAS employees
in fiscal year 2004.[Footnote 2] Participants rely on the PFP program
for their annual salary increase, since they do not receive cost-of-
living adjustments, step increases, or other automatic increases to
their salaries. PFP participants also do not receive locality pay. (See
app. I for data on the number of USPS PFP participants by employee
type.)
According to USPS, the foundation of the PFP program is a "balanced
scorecard" of independently verifiable performance indicators in
several areas--such as service, revenue generation, and efficiency--to
align compensation with individual performance and organizational
results. USPS uses this approach to help balance the need to keep
postal rates affordable, address increasing financial pressure, and
maintain quality delivery service for different types of mail.
Specifically, according to USPS, the PFP program is a mechanism to help
manage the organization and its employees; align organizational, unit,
and individual objectives; link individual contributions to
organizational success; compare individual performance with established
targets; recognize and reward individual successes; and ensure
accountability at all levels of the organization. You requested that we
provide information about USPS's PFP program. Accordingly, this report
(1) describes the key features of USPS's PFP program, (2) provides
information on the weight of the PFP program's performance indicators
in determining participants' ratings, and (3) identifies opportunities
for USPS to incorporate new indicators of delivery performance into its
PFP program.
To address these objectives, we obtained USPS documentation for the PFP
program and interviewed officials responsible for the PFP program. We
also obtained data and information on PFP indicators, including their
weight. We primarily based our assessment of opportunities for USPS to
incorporate new delivery performance indicators into its PFP program on
statutes related to timely mail delivery and interviews with senior
USPS officials. We conducted a data reliability assessment of USPS's
PFP information and determined that the information was sufficiently
reliable for the purposes of our report. More details on our
objectives, scope, and methodology appear in appendix II. We conducted
this performance audit from October 2007 to September 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Results in Brief:
Key features of the PFP program are quantitative corporate and unit
indicators of performance and individual performance elements, which
are used to rate participants and provide the basis for awards.
Quantitative performance targets are established for the corporate and
unit indicators, and the individual performance elements are tailored
to the participant group and, within some groups, to individuals.
Corporate indicators apply to all participants and include measures of
timely delivery, productivity, revenue, and net income, among others.
The unit indicators apply to selected groups of participants, such as
postmasters and managers at various mail processing facilities and vary
according to the groups' responsibilities and spans of control. Some
unit indicators apply to most participants, such as the indicator of
the unit's total operating expenses, while others apply to relatively
few participants, such as indicators of international mail delivery,
which apply exclusively to managers at USPS's International Service
Centers. Individual performance elements, such as leadership and
communication, may have target performance levels defined by narrative
standards. Alternatively, the individual performance elements may be
selected from a predefined list, such as a list of indicators of
operational effectiveness, and then defined more specifically with
target performance levels, based on a discussion that involves the
participant and the participant's rater. USPS then calculates the
overall PFP rating for each participant based on the results of
corporate and unit indicators and ratings for individual performance
elements; this rating is used to determine adjustments to the
participant's salary and any lump sum award.
Corporate and unit indicators related to three strategic goals in
USPS's updated Strategic Transformation Plan[Footnote 3]--increasing
efficiency, improving service, and generating revenues--collectively
account for two-thirds of the average participant's rating. More
specifically, results for efficiency-related indicators, such as USPS's
overall productivity and unit expenses, account for 27 percent of the
average participant's PFP rating; results for service-related
indicators, such as the timeliness of delivery for certain types of
mail, represent 22 percent of the average rating; and results for
revenue-generation indicators, such as national and unit revenues,
account for 17 percent of the average rating (see fig. 1). However, the
weight of PFP indicators varies considerably by participant group,
based on the responsibilities and spans of control of various
managerial and executive positions.
Figure 1: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Average of All PFP Participants, Fiscal Year 2008:
This figure is a pie chart showing the percentage of overall RFP
rating, by type of indicator, average for all PFP participants.
Efficieny-related: 27%;
Individual performance elements: 24%; Service-related: 22%;
Revenue generation: 17%;
Customer-focused culture: 10%.
[See PDF for image]
Source: USPS.
Note: Results are rounded to the nearest percent.
[End of figure]
As USPS implements the postal reform law's requirements to measure and
report to the Postal Regulatory Commission delivery performance for all
market-dominant products, which collectively represent 99 percent of
mail volume, USPS will have opportunities to incorporate new indicators
into its PFP program. These new indicators would create a more
"balanced scorecard" that uses service performance metrics for the mail
that is measured to support personal and unit accountability.
Currently, PFP indicators of timely delivery apply to less than one-
fifth of mail volume. USPS is in the process of implementing required
measurement of delivery performance for market-dominant mail, including
new delivery performance measurement systems for mail that is not being
measured--such as Standard Mail, bulk First-Class Mail, and
Periodicals.[Footnote 4] Together, these three mail types constitute 78
percent of mail volume, including 49 percent for Standard Mail, 25
percent for bulk First-Class Mail, and 4 percent for Periodicals. USPS
has recognized that the successful implementation of these new
measurement systems will depend, in part, on actions by mailers. USPS
expects these actions--including barcoding mail and containers, as well
as providing electronic information on mailings--to become more
widespread over the next several years. Once the new delivery
performance measurement systems are fully implemented and mailers'
participation is sufficient to generate representative data, USPS will
have the opportunity to incorporate new delivery performance indicators
into its PFP program. Such action would be consistent with USPS's
actions in the past to implement delivery performance measurement
systems for Parcel Select and some types of International Mail,
establish targets, identify opportunities to improve service, and to
incorporate the measurement data into the PFP program to hold managers
accountable for results. These actions have been credited with
improving timely delivery performance for these types of mail, both of
which operate in a highly competitive marketplace. Accordingly, we are
recommending that the Postmaster General incorporate new delivery
performance indicators into the PFP program--such as indicators that
cover Standard Mail and bulk First-Class Mail--once the necessary
measurement systems are successfully implemented, including the actions
that mailers must take to permit meaningful performance measurement. In
its comments on our draft report, USPS concurred with the
recommendation and said it was committed to incorporating new delivery
performance measures into its PFP program.
Background:
Delivering more than 210 billion pieces of mail each year, USPS has a
mission vital to the nation's communications and commerce. To meet its
statutory universal service obligation, which requires it to "serve as
nearly as practicable the entire population of the United States," USPS
must "provide prompt, reliable, and efficient services to patrons in
all areas" and "render postal services to all communities."[Footnote 5]
In selecting modes of transportation, USPS is required to "give highest
consideration to the prompt and economical delivery of all
mail."[Footnote 6] Although USPS is authorized by law to receive
appropriations for reimbursement of public service costs incurred by it
in providing a maximum degree of effective and regular postal service
nationwide, in communities where post offices may not be deemed self-
sustaining, USPS has neither requested nor received such appropriations
since 1982.[Footnote 7] USPS receives only minimal appropriations for
reimbursement for providing free mail for the blind and overseas
voting, which USPS refers to as "revenue foregone," that, in fiscal
year 2007, represented less than 0.2 percent of its total
revenues.[Footnote 8] USPS generated 99.8 percent of its total revenues
from products and services, with mail revenues accounting for the vast
majority (94.8 percent of total revenues).
However, USPS faces an increasingly competitive environment. As some
communications and payments have migrated to electronic alternatives,
including the Internet, First-Class Mail, which historically has
covered most overhead costs, has declined in volume, and more declines
are expected. According to USPS, "The projected decline of First-Class
Mail impacts the Postal Service's ability to continue to finance the
growing universal service network. This is the single greatest
challenge facing the Postal Service."[Footnote 9] Although Standard
Mail (primarily advertising) is USPS's largest class of mail and key
growth product, it is more price sensitive. Standard Mail volume has
recently declined in the wake of postal rate increases and the economic
downturn, and its future prospects are unclear as advertising
expenditures continue to shift to the Internet. In this regard, a joint
USPS-mailer work group recently reported that "Standard Mail must be
delivered in a timely and consistent manner to the end customer
according to published standards, in order to remain a viable growth
product for its users and the Postal Service, and to remain competitive
with alternative advertising media."[Footnote 10] Standard Mail growth
will be critical to offset rising costs, primarily rising compensation
and benefits costs that have consistently represented nearly 80 percent
of USPS's expenses.
USPS has restrained cost growth in recent years, in part through
automation and other productivity initiatives that helped reduce the
number of career employees from a peak of nearly 800,000 in September
1999 to fewer than 670,000 in September 2007. However, as USPS has
recognized, continued productivity gains are needed in the face of the
changing mail mix, sustained and evolving competition, and a
challenging economic environment. USPS has recognized that given its
workforce costs, continued work hour reductions are necessary to
achieve productivity gains.
The 2006 postal reform act generally limits rate increases for most
mail to an inflationary price cap.[Footnote 11] The reform act also
abolished the statutory mandate to break even financially over
time.[Footnote 12] As a result, USPS generally cannot address financial
losses with above-inflation rate increases, which underscores the need
to remain financially viable by sufficiently growing revenues,
restraining costs, or both. However, USPS recently reported that fiscal
year 2008 revenues have not been covering costs, which have grown
faster than the price cap.
Key Features of USPS's PFP Program Include Quantitative Performance
Indicators and Individual Performance Elements:
The PFP program includes quantitative corporate and unit indicators of
performance and individual performance elements, both of which are used
to rate PFP participants. According to USPS, the PFP program places
emphasis on performance indicators that are objective and measurable.
To this end, target levels of performance, expressed in quantitative
terms, are established for the corporate and unit indicators, and PFP
participants receive higher ratings as higher targets are achieved. In
fiscal year 2008, 12 corporate indicators apply to all PFP
participants,[Footnote 13] including measures of timely mail delivery,
productivity, revenue, and net income, among other things. A total of
53 unit indicators apply to selected groups of participants, such as
groups of postmasters and managers at various mail processing
facilities, depending on their responsibilities and spans of control.
Some unit indicators apply to most participants, such as the indicator
of total operating expenses. Other indicators apply to relatively few
participants, such as indicators of international mail delivery, which
apply exclusively to managers at USPS International Service Centers.
Besides being rated on results for corporate and unit indicators, each
PFP participant is rated on individual performance elements that vary
depending on the participant group and, within some groups, are
tailored to each participant. Some individual performance elements have
target levels of performance defined by narrative standards that are
centrally established by USPS. For example, EAS postmasters have two
individual performance elements that are defined by narrative
standards: (1) fiscal management and (2) leadership and communication.
Alternatively, other individual performance elements may be selected
from a predefined list and then defined more specifically with target
performance levels, based on a discussion that involves the participant
and the participant's rater. For example, some individual performance
elements for a field operations manager must be selected from a list,
which includes, among other things, operational productivity, the rate
of scanning barcodes on mail pieces, and overtime usage. If an
individual performance element involving operational productivity is
selected, it is then defined with target performance levels for
specific mail processing, delivery, maintenance, and customer service
operations, depending on the responsibilities of the field operations
manager.
Corporate and Unit Indicators:
Corporate and unit indicators are weighted to reflect organizational
priorities. More heavily weighted indicators play a larger role in
determining the overall PFP rating, while less heavily weighted
indicators play a smaller role. To the extent that indicator weights
vary--which can be substantially, depending on the indicator and the
participant's position--the indicator makes a different contribution to
the overall PFP rating and the resulting salary adjustments and any
lump sum awards.
USPS establishes 15 target performance levels for each corporate and
unit indicator. As more challenging targets (i.e., higher levels of
performance) are reached, the indicator increases the overall PFP
rating and the associated PFP award. Thus, indicator targets create
incentives for PFP participants to maximize results for each indicator.
Targets for some indicators are based on actual results achieved for
the current fiscal year (e.g., the percentage of a specified type of
mail delivered on time), while others are based on year-to-year
improvement (e.g., the reduction in formal equal employment opportunity
complaints). In some cases, targets are based on the USPS budget. For
example, unit indicator targets are defined for total operating
expenses relative to the final budget. To the extent that operating
expenses are reduced below the budgeted level, higher target levels are
achieved. These targets can be adjusted by various levels of management
throughout the fiscal year, depending on numerous factors, such as
changes in USPS's overall financial condition, increases in fuel
prices, changes in local mailing volumes, and unexpected local
expenses, among other things.
Corporate and unit indicators are measured against targets at various
levels of geographic aggregation, depending on the indicator and the
participant's group. For example, some corporate indicators are
measured at the national level, such as indicators of productivity,
revenue, and net income. Other indicators are measured at different
geographic levels. For example, for a postmaster of a small post
office, the unit's total operating expense indicator is defined as the
total expenses of that post office. For a district executive, the unit
operating expense indicator is defined as the total expenses of the
entire district.
In some instances, USPS permits "mitigation" adjustments to the data
used to measure achievement against targets. Some individual mitigation
adjustments are intended to take into account events that are outside
the control of the participant, such as a fire that results in the
temporary suspension of a post office's operations. Other mitigation
adjustments are processed in batches for multiple units and
participants, such as adjustments that were made after postal
operations were disrupted by Hurricane Katrina.
Administration of the PFP Program:
USPS has established a structured process for administering the PFP
program. Each participant is assigned a rater, who is generally the
participant's immediate supervisor. At the beginning of the fiscal
year, the rater is required to discuss PFP indicators and targets with
the participant, including goals for corporate and unit indicators and
individual performance elements. During the year, a midyear PFP review
is used for the participant to record accomplishments to date, and the
rater meets with the participant to review progress toward PFP targets.
At the end of the year, the participant records accomplishments, and
the rater meets with the participant and assigns ratings on individual
performance elements. USPS then calculates the overall PFP rating for
each participant based on the results of corporate and unit indicators
and ratings for individual performance elements; this rating is used to
determine adjustments to the participant's salary and any lump sum
award.
PFP Awards:
The overall PFP rating is used to determine salary increases and any
lump sum awards based on separate schedules that apply to EAS and PCES
participants. First, for each participant, an overall rating is
calculated based on the weighted outcomes for corporate and unit
indicators and individual performance elements. Since each indicator
and individual performance element produces an outcome ranging from 1
to 15, the overall rating also ranges from 1 to 15. The rating is
rounded to the nearest whole number for the purpose of determining the
PFP award.
For EAS participants, all PFP awards are in the form of percentage
increases to their salaries. For fiscal year 2008, the PFP award can
range from 0 to 12 percent of the EAS participant's salary, as shown in
figure 2.
Figure 2: Percentage Increase in Salary for EAS Participants Based on
Overall PFP Rating, Fiscal Year 2008:
This figure is a vertical bar chart showing percentage increase in
salary for EAS participants based on overall PFP rating, fiscal year
2008. The X axis represents the overall rating, and the Y axis
represents the PFP award (percent of salary).
Overall rating: 1;
PFP award (percent of salary): 0.
Overall rating: 2;
PFP award (percent of salary): 0.
Overall rating: 3;
PFP award (percent of salary): 0.
Overall rating: 4;
PFP award (percent of salary): 2.5.
Overall rating: 5;
PFP award (percent of salary): 3.
Overall rating: 6;
PFP award (percent of salary): 3.5.
Overall rating: 7;
PFP award (percent of salary): 5.
Overall rating: 8;
PFP award (percent of salary): 5.75.
Overall rating: 9;
PFP award (percent of salary): 6.5.
Overall rating: 10;
PFP award (percent of salary): 8.
Overall rating: 11;
PFP award (percent of salary): 8.75.
Overall rating: 12;
PFP award (percent of salary): 9.5.
Overall rating: 13;
PFP award (percent of salary): 10.25.
Overall rating: 14;
PFP award (percent of salary): 11.
Overall rating: 15;
PFP award (percent of salary): 12.
[See PDF for image]
Source: USPS.
Note: If an EAS participant is paid at or above the top of the salary
structure, the amount of the salary increase over the maximum in the
salary structure is converted into a PFP lump sum award. Similarly, if
a participant's salary increase would exceed the top of the salary
structure, the salary is increased to the maximum at that level, and
the remaining award is converted into a lump sum award. EAS
participants do not receive any other PFP lump sum awards.
[End of figure]
For PCES executives, PFP awards take the form of salary increases and
lump sum awards. Salary increases depend on the overall PFP rating, as
well as each executive's current salary relative to the maximum of his
or her salary range, as shown in table 1. However, no salary increases
are converted to lump sum awards, as they may be for EAS participants.
Table 1: Percentage Increase in Salary for PCES Executives Based on
Overall PFP Rating and Current Salary, Fiscal Year 2008:
Overall rating: 1-3;
Current salary: 30.0% or more below maximum: No increase;
Current salary: 20.0% to 29.9% below maximum: No increase;
Current salary: 10.0% to 19.9% below maximum: No increase;
Current salary: 0.1% to 9.9% below maximum: No increase;
Current salary: At maximum: No increase.
Overall rating: 4-6;
Current salary: 30.0% or more below maximum: Up to 7% increase;
Current salary: 20.0% to 29.9% below maximum: Up to 5% increase;
Current salary: 10.0% to 19.9% below maximum: Up to 3% increase;
Current salary: 0.1% to 9.9% below maximum: Up to 3% increase;
Current salary: At maximum: Up to new salary maximum.
Overall rating: 7-9;
Current salary: 30.0% or more below maximum: Up to 10% increase;
Current salary: 20.0% to 29.9% below maximum: Up to 8% increase;
Current salary: 10.0% to 19.9% below maximum: Up to 6% increase;
Current salary: 0.1% to 9.9% below maximum: Up to 4% increase;
Current salary: At maximum: Up to new salary maximum.
Overall rating: 10-12;
Current salary: 30.0% or more below maximum: Up to 12% increase;
Current salary: 20.0% to 29.9% below maximum: Up to 10% increase;
Current salary: 10.0% to 19.9% below maximum: Up to 8% increase;
Current salary: 0.1% to 9.9% below maximum: Up to 6% increase;
Current salary: At maximum: Up to new salary maximum.
Overall rating: 13-15;
Current salary: 30.0% or more below maximum: 14% increase;
Current salary: 20.0% to 29.9% below maximum: 12% increase;
Current salary: 10.0% to 19.9% below maximum: 10% increase;
Current salary: 0.1% to 9.9% below maximum: Up to 8% increase;
Current salary: At maximum: Up to new salary maximum.
Source: USPS.
[End of table]
In addition to a salary increase, a PCES executive may receive a PFP
lump sum award that is based on his or her overall rating. This lump
sum award is paid as a percentage of the executive's salary, as shown
in table 2, for individuals with an overall rating of 4 and above,
which is considered to be a minimum threshold for a lump sum award.
Table 2: PCES Executive PFP Lump Sum Awards Based on Overall PFP
Rating, Fiscal Year 2008:
PFP rating: 1;
Salary increase (in percent): 0.
PFP rating: 2;
Salary increase (in percent): 0.
PFP rating: 3;
Salary increase (in percent): 0.
PFP rating: 4;
Salary increase (in percent): 1.
PFP rating: 5;
Salary increase (in percent): 2.
PFP rating: 6;
Salary increase (in percent): 3.
PFP rating: 7;
Salary increase (in percent): 4.
PFP rating: 8;
Salary increase (in percent): 5.
PFP rating: 9;
Salary increase (in percent): 6.
PFP rating: 10;
Salary increase (in percent): 8.
PFP rating: 11;
Salary increase (in percent): 9.
PFP rating: 12;
Salary increase (in percent): 10.
PFP rating: 13;
Salary increase (in percent): 12.
PFP rating: 14;
Salary increase (in percent): 13.
PFP rating: 15;
Salary increase (in percent): 14-15.
Source: USPS.
Note: PCES participants may receive lump sum awards in addition to the
salary increases shown in table 1. However, no PCES salary increases
are converted to lump sum awards, as they may be for EAS participants.
[End of table]
Average PFP awards as a percentage of salary for EAS and other non-PCES
participants[Footnote 14] are shown in figure 3, from fiscal year 2004-
-the first year of the current PFP program for EAS participants--
through fiscal year 2007.
Figure 3: Average PFP Awards for EAS and Other Non-PCES Participants,
Fiscal Years 2004 through 2007:
This figure is a combination verticle bar graph showing averge PFP
awards for EAS and other non-PCES participants, fiscal years 2004
through 2007. THe X axis represents the fiscal years, and the Y axis
represents the percent of salary.
Fiscal year: 2004;
Average lump sum payment: 1.1;
Average salary increase: 5.4;
Total: 6.5.
Fiscal year: 2005;
Average lump sum payment: 1.0;
Average salary increase: 4.6;
Total: 5.6.
Fiscal year: 2006;
Average lump sum payment: 1.2;
Average salary increase: 3.9;
Total: 5.1.
Fiscal year: 2007;
Average lump sum payment: 1.5;
Average salary increase: 3.7;
Total: 5.2.
[See PDF for image]
Source: USPS.
Note: Other participants include attorneys and other headquarters
employees not in the PCES or EAS.
[End of figure]
Average PFP awards for PCES participants are shown in figure 4, from
fiscal year 2003--the first year of the current PFP program for PCES
participants--through fiscal year 2007.
Figure 4: Average PFP Awards for PCES Participants, Fiscal Years 2003
through 2007:
[See PDF for image]
Source: USPS.
Note: Data are for participants in PCES level I. A separate PFP program
applies to PCES level II, which consists of USPS officers.
[End of figure]
Overall PFP Ratings Primarily Depend on Results for Indicators Related
to Efficiency, Service, and Revenues:
Overall PFP ratings primarily depend on results for corporate and unit
indicators related to USPS's strategic goals of increasing efficiency,
improving service, and generating revenue. Collectively, these
indicators are weighted so that they account for two-thirds (66
percent) of the PFP rating for the average PFP participant in fiscal
year 2008 (see fig. 5).
Figure 5: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Average of All PFP Participants, Fiscal Year 2008:
This figure is a pie chart showing the percentage of overall RFP
rating, by type of indicator, average for all PFP participants.
Efficieny-related: 27%;
Individual performance elements: 24%;
Service-related: 22%;
Revenue generation: 17%;
Customer-focused culture: 10%.
[See PDF for image]
Source: USPS.
Note: Results are rounded to the nearest percent.
[End of figure]
Figure 5 shows that for fiscal year 2008, results for efficiency-
related indicators, which are corporate and unit indicators, such as
USPS's overall productivity and total unit expenses, make up 27 percent
of the PFP rating for the average participant. Results for service-
related indicators, such as corporate and unit indicators for timely
delivery of different types of mail, represent 22 percent of the
average rating. Results for corporate and unit revenue-generation
indicators, such as national and unit revenues, account for 17 percent
of the average rating. An additional 10 percent of the rating consists
of results for corporate and unit indicators related to USPS's
strategic goal of creating a more customer-focused culture.[Footnote
15] The remaining 24 percent of the rating reflects the results for
individual performance elements, such as oral communication and other
quantitative indicators, some of which were tailored to the individual.
USPS officials have stated that indicators are weighted to reflect
their relative importance to accomplishing USPS's strategic goals, as
well as their applicability to individual positions based on the
individual's responsibilities and span of control. According to USPS,
the PFP program thereby recognizes and rewards individual performance
that improves corporate and unit performance, particularly in high-
priority areas.
Consistent with this approach, some indicators are more heavily
weighted than others. Among efficiency-related indicators, two
indicators make the largest contribution to the overall PFP rating:
total unit expenses (16 percent of the overall rating) and national
productivity (5.6 percent of the rating) (see fig. 6). The 22 other
efficiency-related indicators account for 5 percent of the overall
rating, in part because some of these indicators measure results for
specific USPS operations and, thus, are applicable to relatively few
PFP participants. However, these indicators can have a significant
weight for the participants they apply to. Among service-related
indicators, the 13 indicators measuring timely delivery of the various
mail types account for 16.4 percent of the overall rating. The 10 other
service-related indicators account for 5.4 percent of the rating. Among
revenue-generation indicators, the two most heavily weighted indicators
are unit retail revenue (e.g., revenue from individual pieces of mail
deposited at a post office), which represents 7.7 percent of the
overall rating, and national revenue, which represents 5.7 percent of
the rating. Five other revenue-generation indicators account for 3.9
percent of the overall rating.
Figure 6: Percentage of Overall PFP Rating, by Performance Indicator:
Average of All PFP Participants, Fiscal Year 2008:
This figure is a pie chart showing percentage of overall PFP rating, by
performance indicator, average of all PFP participants, fiscal year
2008.
Individual performance elements: 23.9%;
Timely mail delivery: 16.4%;
Total unit expenses: 16%;
Unit retail revenue: 7.7%;
National revenue: 5.7%;
National productivity: 5.6%;
Other service-related: 5.4%;
Other efficiency-related: 5%;
Other revenue generation: 3.9%;
Injury/illness rate: 3.8%;
Employee survey results: 3.8%;
Other customer-focused culture: 2.8%.
[See PDF for image]
Source: USPS.
Note: Efficiency-related indicators include total unit expenses (a unit
indicator), national productivity (a corporate indicator), and other
efficiency-related indicators that are unit indicators. Service-
related indicators include corporate and unit indicators for timely
mail delivery and other corporate and unit service-related indicators.
Revenue-generation indicators include unit retail revenue (a unit
indicator), national revenue (a corporate indicator), and other
corporate and unit revenue-generation indicators. Customer-focused
culture indicators include the injury/illness rate and employee survey
results (both corporate indicators) and other corporate and unit
customer-focused culture indicators. Results are rounded to the nearest
0.1 percent and add to 100 percent.
[End of figure]
The Weight of PFP Indicators Varies Considerably by Participant Group:
The weight of PFP indicators varies considerably by participant group,
based on the responsibilities and spans of control of various
managerial and executive positions. For example, for the 14,754 full-
time postmasters in EAS levels 11 through 16, who generally head small
post offices,[Footnote 16] 33 percent of the overall PFP rating is
based on the total unit expenses indicator (see fig. 7). In contrast,
this indicator accounts for 12 percent of the rating for the 2,365
postmasters in EAS levels 21 through 26 (see fig. 8), who generally
head larger post offices.[Footnote 17] The overall rating of
postmasters in EAS levels 21 through 26 is more dependent on a variety
of other indicators related to efficiency, timely mail delivery, and
revenue generation.
Figure 7: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Full-Time Postmasters in EAS Levels 11 through 16, Fiscal
Year 2008:
This figure is a pie chart showing percentage of overall PFP rating, by
type of performance indicator, full time postmasters in EAS levels 11
through 16, fiscal year 2008.
Total unit expenses: 33%;
Individual performance elements: 20%;
Timely mail delivery: 10%;
Sorting mail into delivery order: 5.5%;
Retail customer satisfaction: 5.5%;
Morot vehicle accident rate: 5.5%;
Unit retail revenue: 5.5%;
National revenue: 3.75%;
Net income: 2.5%;
Injury/illness rate: 2.5%;
Employee survey results: 2.5%.
[See PDF for image]
Source: USPS.
Note: Post offices headed by EAS postmasters in EAS levels 11 through
16 generally have annual revenues between $30,000 and $300,000. EAS
levels are assigned to postmasters based on a combination of their
responsibilities, the number of their employees, the size of the post
office facility, and various operations performed by the post office.
Efficiency-related indicators include total unit expenses (a unit
indicator) and national productivity (a corporate indicator). Service-
related indicators include corporate indicators for timely mail
delivery and other corporate and unit service-related indicators.
Revenue-generation indicators include corporate indicators for national
revenue and net income. Customer-focused culture indicators include the
injury/illness rate and employee survey results (both corporate
indicators) and other corporate and unit customer-focused culture
indicators. Results are not rounded and add to 100 percent.
[End of figure]
Figure 8: Percentage of Overall PFP Rating, by Type of Performance
Indicator: Postmasters in EAS Levels 21 through 26, Fiscal Year 2008:
This figure is a pie chart showing percentage of overall PFP rating, by
type of performanc indicator: postmasters in EAS levels 21 through 26,
fiscal year 2008.
Unit retail revenue: 28%;
Individual performance elements: 20%;
Timely mail delivery: 16%;
Total unit expenses: 12%;
National productivity: 6%;
National revenue: 6%;
Net income: 4%;
Injury/illness rate: 4%;
Employee survey results: 4%.
[See PDF for image]
Source: USPS.
Note: Post offices headed by EAS postmasters in levels 21 through 26
generally have annual revenues between $5 million and $150 million. EAS
levels are assigned to postmasters based on a combination of their
responsibilities, the number of their employees, the size of the post
office facility, and various operations performed by the post office.
Efficiency-related indicators include total unit expenses (a unit
indicator) and national productivity (a corporate indicator). Service-
related indicators include corporate indicators for timely mail
delivery. Revenue-generation indicators include corporate indicators
for national revenue and net income. Customer-focused culture
indicators include corporate indicators for the injury/illness rate and
employee survey results. Results are not rounded and add to 100
percent.
[End of figure]
Additional examples of how indicator weights vary for participants in
different positions include the following:
* The retail revenues indicator is most heavily weighted for upper-
level EAS postmasters. This indicator accounts for 35 percent of the
overall PFP rating for the 6,853 postmasters in EAS levels 18 through
20 and 28 percent of the rating for the 2,365 postmasters in EAS levels
21 through 26; it makes up 5.5 percent of the rating for the 14,754
postmasters in EAS levels 11 through 16 and does not factor into the
overall PFP rating for the 1,126 part-time EAS postmasters of small
post offices (i.e., Cost Ascertainment Grouping levels A through E). To
put the use of this indicator into context, USPS is looking to generate
revenues through postmaster and other employee outreach to households
and small businesses and has multiple programs for outreach to small
business customers to promote the convenience and value of postal
services.
* Three indicators related to equal employment opportunity (EEO)
account for 35 percent of the overall PFP rating for the 167 managers
with responsibilities in this area. These indicators measure outcomes
of EEO complaints, including the percentage of informal complaints that
become formal complaints, the number of formal complaints, and the
processing time for complaints that are mediated. These indicators
support USPS's emphasis on improving EEO processes and processing EEO
complaints in a timely manner, and USPS classified these indicators as
related to its strategic goal of creating a more customer-focused
culture. USPS has provided training to supervisors and managers on the
importance of EEO, open communication, and the benefits of resolving
complaints at the lowest possible level.
* Various unit indicators apply to the 13,458 EAS field managers who
work in the mail processing area, such as indicators of the efficient
use and maintenance of mail processing equipment. These indicators
support USPS's efforts to improve efficiency and service, and for some
field managers, represent 21 percent of their rating. Other mail
processing indicators measure the scanning of barcodes on mail
containers and equipment used in mail processing operations--an
activity that is critical to USPS's efforts to track mail, thereby
improving service and efficiency.
Opportunities to Incorporate New Delivery Performance Indicators into
USPS's PFP Program Will Follow Implementation of Delivery Measurement
Systems:
As USPS implements the postal reform law's requirements for measuring
and reporting its delivery performance for all market-dominant
products, which collectively make up nearly 99 percent of mail volume,
USPS will have opportunities to incorporate new indicators into its PFP
program, notably for Standard Mail and bulk First-Class Mail.
PFP indicators of timely delivery apply to only some types of
mail[Footnote 18] because, as we reported in July 2006, USPS measures
timely delivery for less than one-fifth of mail volume, with no
representative measures for Standard Mail (48.8 percent of volume),
bulk First-Class Mail (25.3 percent of volume), Periodicals (4.1
percent of volume), and most types of Package Services (0.5 percent of
volume).[Footnote 19] However, in December 2006, Congress enacted
postal reform legislation that requires USPS to measure and report to
the Postal Regulatory Commission on the delivery performance of market-
dominant products, which include mail such as Standard Mail, bulk and
single-piece First-Class Mail, and Periodicals.
USPS is in the process of implementing new delivery performance
measurement systems for market-dominant mail types that are not
currently being measured--such as Standard Mail, bulk First-Class Mail,
and Periodicals. Together, these three mail types constitute 78 percent
of mail volume, including 49 percent for Standard Mail, 25 percent for
bulk First-Class Mail, and 4 percent for Periodicals. USPS has
recognized that the successful implementation of these new measurement
systems will depend, in part, on mailers' barcoding mail and
containers, as well as providing electronic information on mailings.
USPS expects these activities to become more widespread over the next
several years. Once such systems are fully implemented and mailers'
participation is sufficient to generate representative data, USPS will
have the opportunity to incorporate new delivery performance indicators
into its PFP program. Such action would be consistent with the approach
USPS has taken in recent years to incorporate new performance
indicators into its PFP program.
In addition, the External First-Class Measurement System (EXFC), which
is incorporated into the PFP program to measure the timely delivery of
single-piece First-Class Mail, has not been a systemwide indicator for
this type of mail, in part because EXFC has measured delivery
performance for mail deposited in collection boxes only in selected
areas of the country.[Footnote 20] USPS is expanding EXFC coverage to
include nearly all geographic areas. According to a senior USPS
official, as EXFC coverage is expanded in fiscal year 2008, the
additional data are being incorporated into the fiscal year 2008
indicators for single-piece First-Class Mail. This development is
consistent with USPS's actions in the past to implement delivery
performance measurement systems for Parcel Select and some types of
International Mail, establish targets, identify opportunities to
improve service, and to incorporate the measurement data into the PFP
program to hold managers accountable for results. These actions have
been credited with improving timely delivery performance for these
types of mail, both of which operate in a highly competitive
marketplace.
To put these developments into context, in 2006, USPS said that its
goal of improving service--which continues to be one of its primary
goals--is supported by a "balanced scorecard" that uses service
performance metrics for the mail that is measured to support personal
and unit accountability. USPS noted that goals for these metrics--which
include delivery performance indicators, as well as operational
indicators that USPS said are critical to on-time service performance-
-were incorporated into the PFP program. We have agreed with USPS's
focus on improving service and holding its managers accountable for
results but noted in 2006 that USPS has not yet achieved its aim of a
"balanced scorecard" for delivery performance because its delivery
performance indicators cover less than one-fifth of mail volume, and
these indicators do not cover Standard Mail, bulk First-Class Mail,
Periodicals, and most Package Services mail. We observed that this gap
in coverage has impeded USPS's potential for holding its managers
accountable for the delivery performance of all types of mail and for
balancing increasing financial pressures with the need to maintain
quality delivery service.[Footnote 21]
In 2007, the Chairman of the USPS Board of Governors noted in
congressional testimony, "To improve service, we need better metrics on
performance. As George Mason University President Alan Merten says,
'What gets measured gets better.'"[Footnote 22] The delivery
performance indicators that USPS has implemented and incorporated into
PFP incentives have been credited with stimulating improved service.
For example, USPS created delivery standards and indicators for Parcel
Select service in 1999, which it then incorporated into PFP incentives.
In September 2007, the Deputy Postmaster General cited USPS's delivery
performance for Parcel Select as an example of substantial improvement
resulting from measuring and building results into its PFP program,
thereby holding managers accountable.
Conclusions:
To fulfill its mission of providing universal postal service, USPS is
required to provide prompt mail delivery throughout the nation. USPS
can help improve delivery service by incorporating new delivery
performance indicators for market-dominant products that represent most
mail volume into its PFP program. Incorporating new delivery indicators
would hold postal managers accountable for results. We recognize that
incorporating such indicators would depend on successful implementation
of the new measurement systems--which will depend not only on USPS but
also on mailers, who must barcode the mail and provide necessary
information in electronic format, among other things. It will take time
to implement new delivery performance measurement systems at a level
that permits meaningful performance measurement and incorporation into
the PFP program. Thus, over time, USPS will have an opportunity to
incorporate new delivery performance indicators into its PFP program--
such as indicators of timely delivery for Standard Mail and bulk First-
Class Mail--to produce a more balanced scorecard of PFP indicators. As
USPS has recognized, what gets measured gets better, and PFP indicators
help drive performance improvement.
Recommendation for Executive Action:
We are making one recommendation that the Postmaster General
incorporate new delivery performance indicators into the PFP program--
such as indicators that cover Standard Mail and bulk First-Class Mail-
-once the necessary measurement systems are successfully implemented,
including the actions that mailers must take to permit meaningful
performance measurement.
Agency Comments and Our Evaluation:
USPS provided written comments on a draft of this report in a letter
dated August 4, 2008, from the Senior Vice President of Operations and
the Vice President of Employee Resource Management. USPS's comments are
summarized below and the letter is reproduced in appendix III. In
separate correspondence, USPS also provided technical comments, which
we incorporated, as appropriate.
USPS concurred with our recommendation and said it was committed to
incorporating new delivery performance measures into its PFP program.
USPS noted that in its June 2008 response to Congress regarding the
Postal Accountability and Enhancement Act,[Footnote 23] USPS identified
implementing expanded measurement systems for single-piece First-Class
Mail, new systems for bulk First-Class Mail, Standard Mail,
Periodicals, and bulk Package Services mail and stated that
implementation of these systems will continue through fiscal year 2009.
USPS agreed with our draft report that successful implementation of new
measurement systems will depend, in part, on mailers barcoding mail and
containers, as well as providing electronic information on mailings.
USPS said that in addition to expanding measurement systems for its
market-dominant products during fiscal year 2009, it will also develop
historical data to assist with the creation of future performance
targets. USPS also provided comments on its PFP program, stating that
the program's approach has been responsible for substantial performance
improvements and is consistent with past efforts to ensure the proper
balance of performance indicators.
We are sending copies of this report to the Chairman of the Senate
Committee on Homeland Security and Governmental Affairs; the Ranking
Minority Member of the Subcommittee on Federal Financial Management,
Government Information, Federal Services, and International Security,
Senate Committee on Homeland Security and Governmental Affairs; the
Chairman and Ranking Minority Member of the House Committee on
Oversight and Government Reform; the Chairman and Ranking Minority
Member of the Subcommittee on Federal Workforce, Postal Service, and
the District of Columbia, House Committee on Oversight and Government
Reform; the Chairman of the USPS Board of Governors; the Postmaster
General; the USPS Inspector General; and other interested parties. We
also will provide copies to others on request. In addition, the report
will be available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at [email protected] or (202) 512-2834. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix IV.
Signed by:
Phillip R. Herr:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Number of U.S. Postal Service Pay for Performance
Participants, by Employee Type, as of December 5, 2007:
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: EAS Postmaters:
Postmasters, level 21-26;
Number of participants: 2,365.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: EAS Postmaters:
Postmasters, level 18-20;
Number of participants: 6,853.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: EAS Postmaters:
Postmasters, level 11-16;
Number of participants: 14,754.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: EAS Postmaters:
Postmasters, level A-E;
Number of participants: 1,126.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: EAS Postmaters:
Subtotal;
Number of participants: 25,098.
U.S. Postal Service (USPS) employee type: U.S. Postal Service (USPS)
employee type: Executive and Administrative Schedule (EAS) and other
non-EAS participants: * Other field EAS employees (including district
and facility EAS): * Field customer service EAS: * Manager of Customer
Service Operations at a post office;
Number of participants: 447.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field customer
service EAS: * EAS at Postal Career Executive Service (PCES) post
office;
Number of participants: 1,307.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field customer
service EAS: * EAS at grade 21-26 post office;
Number of participants: 8,258.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field customer
service EAS: * EAS at grade 18-20 post office;
Number of participants: 2,525.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field customer
service EAS: * EAS level 21 and below at a station or branch;
Number of participants: 2,766.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field customer
service EAS: * EAS level 22 and above at a station or branch;
Number of participants: 1,822.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field customer
service EAS: Subtotal;
Number of participants: 17,125.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * PCES plant;
Number of participants: 765.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * EAS plant;
Number of participants: 2,139.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Distribution Operations: Processing and Distribution
Center, Processing and Distribution Facility, Customer Service Network
Processing Facility;
Number of participants: 3,999.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * In-Plant Support: Processing and Distribution Center,
Processing and Distribution Facility, Customer Service Network
Processing Facility;
Number of participants: 1,224.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Maintenance: Processing and Distribution Center,
Processing and Distribution Facility, Customer Service Network
Processing Facility;
Number of participants: 2,203.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Transportation: Processing and Distribution Center,
Processing and Distribution Facility, Customer Service Network
Processing Facility;
Number of participants: 810.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Air Mail Center or Air Mail Facility;
Number of participants: 291.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Bulk Mail Center or Bulk Mail Facility;
Number of participants: 1,429.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Priority Mail Processing Center or Logistics and
Distribution Center;
Number of participants: 222.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Remote Encoding Center;
Number of participants: 127.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * Surface Transportation Center or Hub-and-Spoke
Program;
Number of participants: 64.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: * International Service Center;
Number of participants: 185.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Field mail
processing EAS: Subtotal;
Number of participants: 13,458.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Business Mail Entry Unit;
Number of participants: 420.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Business Service Network;
Number of participants: 218.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Consumer Advocate;
Number of participants: 53.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Finance;
Number of participants: 1,062.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Human Relations;
Number of participants: 2,951.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Marketing;
Number of participants: 727.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
District Manager's Office;
Number of participants: 580.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Manager of Operations Program Support;
Number of participants: 2,205.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Manager of Post Office Operations;
Number of participants: 461.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Retail;
Number of participants: 184.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Stamp distribution;
Number of participants: 57.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: *
Statistical programs;
Number of participants: 117.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS: * Time
and Attendance Collection System;
Number of participants: 75.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * District EAS:
Subtotal;
Number of participants: 9,110.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Business
Service Network;
Number of participants: 58.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: *
Distribution Networks Operations;
Number of participants: 373.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Delivery
Point Sequencing;
Number of participants: 78.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Finance;
Number of participants: 124.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Human
Resources; Number of participants: 302.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: *
Maintenance;
Number of participants: 56.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: *
Marketing;
Number of participants: 91.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Methods
Improvement Program;
Number of participants: 99.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: *
Management Operations Support;
Number of participants: 79.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Retail;
Number of participants: 14.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Small
Business and Mail Acceptance Unit;
Number of participants: 7.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: * Area
Vice President's Office;
Number of participants: 16.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Area EAS: Subtotal;
Number of participants: 1,297.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Capital Metro Area;
Number of participants: 13.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Eastern Area;
Number of participants: 13.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Great Lakes Area;
Number of participants: 24.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * New York Metro Area;
Number of participants: 17.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Northeast Area;
Number of participants: 12.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Pacific Area;
Number of participants: 18.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Southeast Area;
Number of participants: 23.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Southwest Area;
Number of participants: 26.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: * Western Area;
Number of participants: 21.
U.S. Postal Service (USPS) employee type: Executive and Administrative
Schedule (EAS) and other non-EAS participants: * Other field EAS
employees (including district and facility EAS): * Equal employment
opportunity field operations EAS: Subtotal;
Number of participants: 167.
U.S. Postal Service (USPS) employee type: * Postal Police: *
Headquarters (HQ) and HQ- related EAS employees: * Attorneys on the
Attorney Compensation Schedule;
Number of participants: 183.
U.S. Postal Service (USPS) employee type: * Postal Police: *
Headquarters (HQ) and HQ- related EAS employees: * Sales EAS;
Number of participants: 667.
U.S. Postal Service (USPS) employee type: * Postal Police: *
Headquarters (HQ) and HQ- related EAS employees: * Other HQ and HQ-
related EAS;
Number of participants: 4,471.
U.S. Postal Service (USPS) employee type: * Postal Police: *
Headquarters (HQ) and HQ- related EAS employees: Subtotal;
Number of participants: 5,321.
U.S. Postal Service (USPS) employee type: * Postal Police: *
Headquarters (HQ) and HQ- related EAS employees: Total;
Number of participants: 71,702.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Air Mail Center or Air Mail Facility;
Number of participants: 1.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Distribution Networks Operations;
Number of participants: 9.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Delivery Point Sequencing;
Number of participants: 10.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Finance;
Number of participants: 9.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Human Resources;
Number of participants: 10.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Maintenance;
Number of participants: 9.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Marketing;
Number of participants: 11.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Methods Improvement Program;
Number of participants: 11.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Manager of Operations Support;
Number of participants: 10.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Area Vice President's Office;
Number of participants: 4.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
Bulk Mail Center or Bulk Mail Facility;
Number of participants: 16.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
District Leadership;
Number of participants: 116.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
International Service Center;
Number of participants: 1.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
PCES plant;
Number of participants: 88.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters): *
PCES post office;
Number of participants: 37.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * PCES field executives (including PCES Postmasters):
Subtotal;
Number of participants: 342.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): * HQ and HQ-related PCES executives;
Number of participants: 405.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): Total: PCES;
Number of participants: 747.
U.S. Postal Service (USPS) employee type: Postal Career Executive
Service (PCES): Grand total;
Number of participants: 72,449.
Source: USPS.
Note: According to USPS, on December 5, 2007, an additional 221
individuals appeared to be PFP participants but had not confirmed their
employee profile information in the PFP program. As a result, USPS was
unable to categorize these employees and they were not included in this
table.
[End of table]
[End of section]
Appendix II: Objectives, Scope, and Methodology:
Our objectives were to (1) describe the key features of the U.S. Postal
Service's (USPS) pay for performance (PFP) program, (2) provide
information on the weight of the PFP program's performance indicators
in determining participants' ratings, and (3) assess opportunities for
USPS to incorporate new indicators of delivery performance into its PFP
program. To address these objectives, we obtained documentation from
USPS on its PFP program and interviewed USPS officials responsible for
the program. To assess opportunities for USPS to incorporate new
delivery performance indicators into its PFP program, we also obtained
documentation on USPS's plans to implement new delivery performance
measurement systems. We primarily based our assessment on applicable
laws--such as laws related to USPS's statutory mission of providing
prompt, reliable, and efficient postal services to patrons in all areas
at reasonable rates and statutory reporting requirements related to
USPS's delivery performance--as well as on interviews with senior USPS
officials. We also developed assessment criteria from our past work on
other agencies' PFP programs and best practices used by high-performing
organizations. We conducted a data reliability assessment of USPS's PFP
information and determined that the information was sufficiently
reliable for the purposes of our report. Our assessment was based on a
review of the documentation and data provided, comparing the
consistency of information provided by multiple sources and in multiple
data files; interviews with USPS officials to discuss the
documentation; and data, including how the data were developed; and
follow-up questions to obtain further information.
We conducted this performance audit from October 2007 to September 2008
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix III: Comments from the U.S. Postal Service:
United States Postal Service:
August 4, 2008:
Mr. Phillip R. Herr:
Director, Physical Infrastructure Issues:
United States Government Accountability Office:
Washington, DC 20548-0001:
Dear Mr. Herr:
Thank you for providing the U.S. Postal Service with the opportunity to
review and comment on the draft report titled U.S. Postal Service: New
Delivery Performance Measures Could Enhance Managers' Pay for
Performance Program (GAO-08-996).
Given the shift to pay-for-performance (PFP) by many agencies�including
the GAO�we had hoped the report would offer a brief opinion on the
Postal Service's PFP program itself. We provided extensive information
on the program's history, design, and its evolution to its current
phase. This information included a history of performance results under
PFP and its predecessor programs, specific design features of over
twelve years of postal pay-for-performance programs, a history of pay
consultations with the management associations, examples of employee
communications and training, and independent assessments of our pay-for-
performance programs. The Postal Service's program has been cited by an
independent entity as a model for other agencies to emulate as it links
individual contributions to organizational success through objective,
measurable performance indicators which are aligned at the corporate,
functional, and individual levels.
The complexity of managing an organization the size of the Postal
Service requires senior managers be able to view performance in several
areas simultaneously. The National Performance Assessment (NPA) program
is a "balance scorecard" approach utilized by the Postal Service that
translates the organization's strategy and mission into specific goals
and measures, providing managers the ability to evaluate service,
corporate culture, internal efficiencies and financial performance at a
glance.
In response to the GAO's recommendation that the Postal Service
"incorporate new delivery performance indicators into the [Pay for
Performance] PFP program," the Postal Service concurs and is committed
to accomplishing that goal.
In the June 2008 response to Congress regarding the Postal
Accountability and Enhancement Act (PAEA) � 302 Network Plan, the
Postal Service identified "implementing expanded measurement systems
for Single-Piece First-Class Mail; new systems for Presort First-Class
Mail, Standard Mail, Periodicals and Presort Package
Services...Implementation of these systems will continue through fiscal
year (FY) 2009."
Furthermore, as stated in the GAO report, "successful implementation of
new measurement systems will depend, in part, on mailers' barcoding
mail and containers, as well as providing electronic information on
mailings." This is also identified in the Network Plan.
In addition to expanding measurement systems for its Market-Dominant
products during FY 2009, the Postal Service will also develop
historical data to assist with the creation of future performance
targets.
The performance goal of the Postal Service is one of continuous
improvement. The NPA program incorporates continuous improvement into
each and every indicator. This approach has been responsible for
substantial performance improvements for the Postal Service and is
consistent with past efforts to ensure the proper balance of NPA
indicators.
If you or your staff wish to discuss any of these comments further, we
are available at your convenience.
Sincerely,
Signed by:
Deborah Giannoni-Jackson:
Vice President:
Employee Resource Management:
Anthony M. Pajunas
for:
A/Senior Vice President, Operations:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Phillip R. Herr (202) 512-2834 or [email protected]:
Staff Acknowledgments:
In addition to the above individuals, Gerald P. Barnes (Assistant
Director), Elizabeth Eisenstadt, Brandon Haller, David Hooper, Kenneth
E. John, Belva Martin, Laura Shumway, and Crystal Wesco made key
contributions to this report.
[End of section]
Footnotes:
[1] PCES includes postal officers and other USPS executives. EAS
includes most USPS managerial and administrative employees.
[2] USPS's former PFP program included an Economic Value Added Variable
Pay Program for lump sum payments (fiscal years 1996 through 2002) and
a Merit Pay Program for salary increases (fiscal years 1996 through
2003).
[3] USPS, Strategic Transformation Plan 2006-2010: 2007 Update
(Washington, D.C., December 2007).
[4] The Postal Accountability and Enhancement Act, Pub. L. No. 109-435,
�3652, 120 Stat. 3212 (Dec. 20, 2006).
[5] 39 U.S.C. ��101(a), 403(a).
[6] 39 U.S.C. �101(f).
[7] 39 U.S.C. �2401(b)(1).
[8] 39 U.S.C. �2401(c). For fiscal year 2008, Congress appropriated
$118 million to USPS for these purposes.
[9] USPS, Strategic Transformation Plan 2006-2010, p. 7.
[10] Mailers Technical Advisory Committee Workgroup #114, Establish
Service Standards and Measurement, Final Recommendations Report
(Washington, D.C., Sept. 20, 2007), [hyperlink,
http://postcom.org/public/WG114/WG114_Final_Report_Sept_20.pdf], p. 34.
[11] Pub. L. No. 109-435.
[12] Postal rates and fees shall provide sufficient revenues so that
the total estimated income and appropriations to the Postal Service
will equal as nearly as practicable total estimated costs of the Postal
Service. Pub. L. No. 91-375, 84 Stat. 760 (Aug. 12, 1970). The 2006
postal reform law eliminated this provision. Pub. L. No. 109-435,
�201(a).
[13] National results on the corporate indicators serve as a
controlling factor for determining ratings for headquarters employees.
[14] Other participants include attorneys and other headquarters
employees not in PCES or EAS.
[15] No corporate and unit indicators for fiscal year 2008 were
classified as primarily related to USPS's goal of enhancing
sustainability, which USPS added to its list of strategic goals after
the fiscal year began (i.e., when USPS issued its updated Strategic
Transformation Plan in December 2007).
[16] Post offices headed by EAS postmasters in EAS levels 11 through 16
generally have annual revenues between $30,000 and $300,000. EAS levels
are assigned to postmasters based on a combination of their
responsibilities, the number of their employees, the size of the post
office facility, and various operations performed by the post office.
[17] Post offices headed by EAS postmasters in levels 21 through 26
generally have annual revenues between $5 million and $150 million.
[18] The fiscal year 2008 PFP program uses several indicators of timely
delivery for the mail types that are currently measured, which include
single-piece First-Class Mail, Priority Mail, Express Mail, some
Package Services Mail, and some International Mail. These indicators
are weighted to collectively make up 16.4 percent of the average PFP
rating, including single-piece First-Class Mail (7.6 percent of the
average rating), Priority Mail (5.9 percent), Express Mail (1.9
percent), Package Services (0.9 percent), and International Mail (0.1
percent). The International Mail indicators are a very small percentage
of the average PFP rating because they are only factored into the PFP
ratings of managers who work in International Mail Centers.
[19] GAO, U.S. Postal Service: Delivery Performance Standards,
Measurement, and Reporting Need Improvement, GAO-06-733 (Washington,
D.C.: July 27, 2006).
[20] EXFC, administered by a contractor, measures when test mail pieces
are deposited in collection boxes and received at various addresses. In
recent years, EXFC has covered 463 three-digit ZIP Code areas (i.e.,
ZIP Codes with the same first three digits) judgmentally selected based
on geographic and volume density. It does not cover remittance mail
(i.e., bill payments) that companies pick up at USPS facilities.
[21] GAO-06-733.
[22] Prepared statement of James C. Miller III, Chairman, Board of
Governors, U.S. Postal Service, before the Subcommittee on Federal
Workforce, Postal Service, and the District of Columbia, Committee on
Oversight and Government Reform, U.S. House of Representatives
(Washington, D.C.: Apr. 17, 2007).
[23] USPS, Postal Accountability and Enhancement Act �302 Network Plan
(Washington, D.C., June 2008), required by the Postal Accountability
and Enhancement Act (Pub. L. No. 109-435, �302).
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