Merit-Based Bonus Program for USPS Managers in Plans
April 7, 2003
By STEPHEN LOSEY Federal Times
The U.S. Postal Service and postal manager groups are working out the
details of a new merit-based bonus program for about 80,000 managers,
supervisors and support staff.
The new program, which would hinge bonuses on individual performance, is
expected to be ready by September. The Postal Service is discussing what the
new program’s goals should be with the National Association of Postmasters
of the United States, the National League of Postmasters and the National
Association of Postal Supervisors.
NAPUS President Wally Olihovik said nothing has been decided. The new
pay-for-performance plan could judge managers on criteria such as overnight
delivery rates, controlling sick leave, revenue generation, employee survey
scores or injury rates. The Postal Service also has not decided how big the
merit bonuses will be.
Postal Service spokesman Gerry Kreienkamp said the merit bonus system will
be similar to the system put in place last September for vice presidents and
top managers. Under that program, individual goals are set at the beginning
of the fiscal year by each person’s superiors. Senior vice presidents and
the postmaster general set personal goals that relate to the Postal
Service’s overall performance goals.
Olihovik hopes the new program would take mitigating factors into account —
for example, postmasters should not be penalized when delivery slows during
snowstorms, or if revenue declines in an area where the economy is slumping.
Goals should relate to matters managers can control, Olihovik said. NAPUS is
surveying members to find out how the Postal Service can set realistic
Setting specific goals upfront would be a major improvement over the
previous bonus program, called the economic value added (EVA) program, which
was canceled last year, said Vincent Palladino, president of the National
Association of Postal Supervisors. That controversial program never settled
on proper goals, he said. As a result, merit bonuses were not handed out
objectively and employees did not know how to improve their performance.
The EVA program had some goals that managers could not control, Olihovik
said. For example, a postmaster could be penalized for delivering mail late,
even if the mail was delayed before it reached his post office.
“You’re being rated on something a mail-processing plant has control over 50
to 75 miles away,” Olihovik said.
National League of Postmasters President Steve LeNoir said the Postal
Service’s Inspector General’s Office criticized the EVA program for being
hard to understand and not motivating managers.
The Postal Service started the EVA program in 1995 to reward managers who
bring in more sales, boost productivity, reduce costs or do other things to
make the Postal Service more money.
Mailing industry groups say the EVA program hurt the Postal Service.
Neal Denton, executive director of the Washington, D.C.-based Alliance of
Nonprofit Mailers, a coalition of nonprofit organizations interested in
postal policy, said the EVA program created political problems for the
Postal Service. The old program drew criticism for providing managers with
merit bonuses while the Postal Service was losing money and increasing
Olihovik said the upcoming program may encounter the same criticism. But, he
said, offering pay rewards for good performance is a standard practice for
Tony Gallo, vice president of the Association for Postal Commerce, an
Arlington, Va.-based association of businesses and organizations that use
mail for communication and commerce, said the EVA bonuses helped senior
postal employees make up for not receiving cost-of-living adjustments. Those
managers were making thousands of dollars less than employees with
comparable managerial responsibilities in other agencies, he said.
The lower salary meant the Postal Service did not have to pay as much into
health and retirement benefits, Gallo said.
“Everybody viewed [the merit bonuses] as part of the salary,” Gallo said.
“It became a public relations nightmare.”
Postal managers often could receive salary increases of between $9,000 and
$14,000 by moving to other jobs elsewhere in government or the private
sector, Gallo said. The Postal Service started to see a brain drain.
“It didn’t do postal employees any favors, and it didn’t do the Postal
Service any favors,” said Gene Del Polito, president of the Association for