POSTAL REGULATORY COMMISSION

REVIEW OF POSTAL SERVICE FY 2013

PERFORMANCE REPORT AND FY 2014

PERFORMANCE PLAN

July 7, 2014

Postal Regulatory Commission

Submitted 7/7/2014 10:26:52 AM

Filing ID: 89985

Accepted 7/7/2014
i

TABLE OF CONTENTS

Page

EXECUTIVE SUMMARY ..............................................................................................................................1

INTRODUCTION.........................................................................................................................................3

LEGAL REQUIREMENTS .............................................................................................................................4

FY 2013 ANNUAL PERFORMANCE REPORT AND FY 2014 ANNUAL PERFORMANCE PLAN ......................6

PERFORMANCE GOAL 1: SERVICE (% ON-TIME) ......................................................................................9

PERFORMANCE GOAL 2: CUSTOMER EXPERIENCE..................................................................................11

PERFORMANCE GOAL 3: FINANCIAL RESULTS .........................................................................................23

PERFORMANCE GOAL 4: WORKPLACE ENVIRONMENT...........................................................................27

STRATEGIC INITIATIVES.............................................................................................................................31

COMPLIANCE WITH FILING REQUIREMENTS ............................................................................................39
Review of FY 2013 Performance Report Executive Summary

and FY 2014 Performance Plan

1

EXECUTIVE SUMMARY

Each year, the Postal Service must submit to the Commission copies of its most recent Annual 

Performance Report and Annual Performance Plan. On December 27, 2013, the Postal Service filed its 

fiscal year (FY) 2013 Annual Performance Report (FY 2013 Report) and FY 2014 Annual Performance Plan 

(FY 2014 Plan). In this report, the Commission evaluates whether the Postal Service has met the 

performance goals in the Postal Service’s FY 2013 Report and reviews the initiatives and targets 

established in the FY 2014 Plan.

In the first part of this report, the Commission analyzes the Postal Service’s four performance goals, 

each of which includes performance indicators that define the level of performance to be achieved. The 

performance goals are: (1) Service; (2) Customer Experience; (3) Financial Results; and (4) Workplace 

Environment. The Commission also reviews the Postal Service’s strategic initiatives, which are intended 

to clarify the connections between the performance goals and the actions necessary to achieve them. In 

the second part of this report, the Commission discusses the completeness of the Postal Service’s filings 

related to statutory and regulatory requirements. The Commission’s principal findings are as follows:

Service Performance

Overall, the Postal Service partially met the Service performance goal because it met some, but not all, 

service performance indicator targets. For presort First-Class Mail, all performance indicator targets 

were met. Single-Piece First-Class Mail performance results were mixed.

While the Postal Service measures service performance for all market dominant products, in FY 2013 

only service performance for First-Class Mail was included as performance indicators for the Service 

performance goal. The Postal Service added a new Standard Mail composite target in its FY 2014 Plan. 

The Commission finds it encouraging that the Postal Service is now measuring and setting performance 

targets for other market dominant products.

Customer Experience

The Postal Service did not meet its Customer Experience performance goal in FY 2013. It had set a 

target of 82.5 and achieved an overall customer experience score of 78.4.

The Customer Experience goal is measured by national surveys of residential and small/medium 

business customers. While the Postal Service also surveys large business customers, that survey data 

are not used in assessing performance towards achieving the Customer Experience goal. To ensure that 

the satisfaction of all Postal Service customers is being addressed, the Postal Service should include a 

customer experience performance indicator and target measure for large business customer 

experiences.

In addition, a significant percentage of large business survey respondents do not meet the Postal 

Service’s definition of “large business.” The Postal Service should explore this issue to ensure that the 

survey results reflect the customer experience of the targeted respondents.
Review of FY 2013 Performance Report Executive Summary

and FY 2014 Performance Plan

2

Financial Results

The Postal Service partially met its Financial Results performance goal. The FY 2013 Deliveries Per Hour 

(DPH) result, which the Postal Service uses to measure productivity, did not meet the target. However, 

the operating loss was less than forecasted.

As in previous reviews of Postal Service Annual Performance Reports and Plans, the Commission finds 

that the Total Factor Productivity (TFP) index may be a better measure of productivity than DPH because 

it includes major workload components, such as collecting, processing, transporting, and sequencing of 

mail for delivery that DPH does not.

Workplace Environment

The Postal Service partially met the Workplace Environment performance goal. In FY 2013, its 

Occupational Safety and Health Administration’s (OSHA) Illness and Injury (I&I) Rate of 5.61 met the 

performance target, but not the Voice of the Employee (VOE) survey target. The VOE survey score 

remained constant at 64.7 throughout FY 2011, FY 2012, and FY 2013, which demonstrates that the 

Postal Service is neither improving nor declining in this area. Additionally, given what appear to be 

possible delays in the Postal Service’s updates to its OSHA I&I Rate information and methodological 

differences from year to year, the Commission suggests the Postal Service consider adding the 

Department of Labor’s Total Case Rate as a performance indicator for the Workplace Environment 

performance goal since it is a standard, stable measure tracked for all federal agencies.

Strategic Initiatives

The strategic initiatives facilitate the Commission’s review of the performance goals under 39 U.S.C. 

§ 3653(d) and are considered part of the Annual Performance Report and Plan. In future filings, the 

Postal Service should describe the relationships between the strategic initiatives and performance goals 

and provide the performance indicators used to measure progress in meeting targets.

The Commission also suggests that for performance goals not completely achieved, the Postal Service 

consider using specific strategic initiative performance measures from its internal management program 

activity performance measurement system to identify which strategic initiative performance did not 

meet program activity target goals.

Compliance with Filing Requirements

The Commission finds that the FY 2013 Report satisfies the applicable statutory and regulatory filing 

requirements for each performance goal. The FY 2014 Plan meets most of the applicable statutory and 

regulatory requirements.

The Commission’s evaluation of the Postal Service’s progress towards meeting performance goals is 

hampered by the manner in which the Postal Service prepares its Annual Performance Report and Plan. 

Strategic initiatives are included in the FY 2013 Comprehensive Statement on Postal Operations (FY 2013 

Comprehensive Statement) rather than in the Postal Service’s Annual Performance Report and Plan. In 

addition, performance measures should be specific for each program activity, and strategic initiatives 

would benefit from consistency year to year.
Review of FY 2013 Performance Report Introduction

and FY 2014 Performance Plan

3

INTRODUCTION

The Postal Accountability and Enhancement Act of 2006 (PAEA) requires the Commission to review the 

performance goals established in the Postal Service’s FY 2013 Report and FY 2014 Plan.1 The 

Commission must evaluate whether the Postal Service has met the performance goals established in the 

FY 2013 Report, and evaluate the FY 2014 Plan.2 It may also provide recommendations to the Postal 

Service related to protecting or promoting public policy objectives in title 39. Id.

In past years, the Commission’s analyses of Annual Performance Reports and Plans have been included 

in its Annual Compliance Determination (ACD).

3

 The Commission has determined that its obligations 

under 39 U.S.C. § 3653(d) are distinguishable from its ACD obligations under 39 U.S.C. § 3653(b), and, 

therefore, beginning with FY 2013, it will issue a separate report on the Postal Service’s Annual 

Performance Reports and Plans.

4

 Bifurcating the reports allows the Commission to provide a more indepth analysis of the Postal Service’s FY 2013 Report and FY 2014 Plan than in previous years.

In formulating its review, the Commission invited comments on whether the Postal Service’s FY 2013 

Report and FY 2014 Plan filings are consistent with applicable statutory and regulatory provisions. Id.

at 2. The Public Representative submitted comments on these filings.5 The Postal Service submitted 

reply comments to the Public Representative’s comments.6

This report is organized into two parts. The first part analyzes the Postal Service’s performance and 

whether it has met the goals established under 39 U.S.C. §§ 2803 and 2804. The second part discusses 

compliance of the Postal Service’s filing with statutory and regulatory requirements.

 

1

In the FY 2013 Annual Compliance Report, the Postal Service filed as a Library Reference its United 

States Postal Service 2013 Annual Report to Congress (FY 2013 Annual Report to Congress), which contains the 

FY 2013 Report and FY 2014 Plan. Docket No. ACR2013, United States Postal Service FY 2013 Annual Compliance 

Report, December 27, 2013 (FY 2013 ACR), Library Reference USPS-FY13-17.

2

39 U.S.C. § 3653(d).

3

See, e.g., Docket No. ACR2012, Annual Compliance Determination Report, Fiscal Year 2012, March 28, 

2013, at 43-46 (FY 2012 ACD).

4

Docket No. ACR2013, Order No. 1972, Notice Regarding the Postal Service’s FY 2013 Performance Report 

and FY 2014 Performance Plan, January 17, 2014.

5

Docket No. ACR2013, Public Representative Initial Comments on FY 2013 Performance Report and 

FY 2014 Performance Plan, March 10, 2014 (PR Comments).

6

Docket No. ACR2013, Reply Comments of the United States Postal Service on FY 2013 Performance 

Report and FY 2014 Performance Plan, March 20, 2014 (Postal Service Reply Comments).
Review of FY 2013 Performance Report Legal Requirements

and FY 2014 Performance Plan

4

LEGAL REQUIREMENTS

Annually, the Postal Service must submit copies of its most recent Annual Performance Report and Plan

to the Commission.

7

 Annual Performance Reports and Plans must meet the requirements set forth in 

39 U.S.C. §§ 2803 and 2804.8

Section 2803 requires that the Postal Service’s Annual Performance Plans cover “each program activity 

set forth in the Postal Service budget, which shall be included in the comprehensive statement....”

9

 They 

must also:

(1) establish performance goals to define the level of performance to be achieved by a 

program activity;

(2) express each goal in an objective, quantifiable, and measurable form;

(3) describe the operational processes, skills and technology, and other resources required 

to meet the performance goals;

(4) establish performance indicators to measure or assess the relevant outputs, service 

levels, and outcomes of each program activity;

(5) provide a basis to compare actual program results with the established performance 

goals; and

(6) describe the means to be used to verify and validate measured values.10

Section 2804 requires each Annual Performance Report to:

(1) review the success of achieving performance goals;

(2) evaluate the Annual Performance Plan relative to the performance achieved towards 

the performance goals;

(3) include summary findings of those program evaluations; and

 

7

39 U.S.C. § 3652(g).

8

Chapter 28 of title 39, which includes sections 2803 and 2804, was added by the Government 

Performance and Results Act of 1993, Pub. L. No. 103-62, 107 Stat. 285 (1993).

9

39 U.S.C. § 2803(a). The Comprehensive Statement is submitted to Congress annually and must include 

information on compliance with 39 U.S.C. § 101, postal operations generally, total expenditures and obligations 

incurred for the most recent fiscal year, and other matters. Id. § 2401(e).

10 Id. § 2803(a). The Postal Service may express performance goals for a particular program activity in an 

alternative form if the Postal Service determines that expressing those goals in an objective and quantifiable 

manner is not feasible. The alternative form must: (1) describe “minimally effective” and “successful” programs; 

and (2) state why expressing a performance goal in any form for the program activity is infeasible or impractical. 

Id. § 2803(b).
Review of FY 2013 Performance Report Legal Requirements

and FY 2014 Performance Plan

5

(4) describe reasons for those performance goals not fully achieved, as well as plans and 

schedules for fully achieving the goal. If the performance goal is impractical or 

infeasible, the Postal Service must explain why that is the case and recommend a course 

of action.11

The Commission must then evaluate the Postal Service’s submissions to determine whether the Postal 

Service has met the goals established under 39 U.S.C. §§ 2803 and 2804. It may also provide 

recommendations related to the protection or promotion of public policy objectives set out in this 

title.12

 

11 Id. § 2804(d).

12 Id. § 3653(d).
Review of FY 2013 Performance Report FY 2013 Annual Performance Report

and FY 2014 Performance Plan and FY 2014 Annual Performance Plan

6

FY 2013 ANNUAL PERFORMANCE REPORT AND FY 2014 ANNUAL

PERFORMANCE PLAN

Table 1 shows each Postal Service performance goal in its FY 2013 Report and FY 2014 Plan and whether 

each performance goal was met, the reasons the goal was partially met, or not met, and the plans and 

schedules for meeting the goal in the future.

TABLE 1

FY 2013 PROGRESS TOWARDS PERFORMANCE GOALS

Performance Goal Goal Met Reason Plans and Schedules

Service

(% on-time) Partially

Changes to network;

realignment/reduction 

of workhours; service 

standard changes; plant 

consolidations

Improve efficiency, reduce cycle 

time, and eliminate waste; 

conduct monthly Area service 

review

Customer Experience No

Lower percentage of 

customers responding 

Very Satisfied or Mostly 

Satisfied to question 

regarding recent 

contact with the Postal 

Service; repeat 

customer complaints

Weekly messaging to inform and 

engage employees; provide 

diagnostic reports; review current 

complaint handling processes

Financial Results Partially

Significantly higher 

volume in FY 2013 than 

planned; less 

centralization of 

business deliveries; 

hiring/training of new 

non-career employees

Reduce workhours; maintain high 

service quality

Workplace 

Environment Partially

Overall decline in 

morale among federal 

employees

Implement internship/mentoring 

programs and innovative training 

strategies

Source: FY 2013 Annual Report to Congress at 40, 42; Docket No. ACR2013, Responses of the United 

States Postal Service to Questions 1, 5-6, 8-11 of Chairman’s Information Request No. 15, March 31, 

2014, question 10(c) (Postal Service Response to CHIR No. 15); Docket No. ACR2013, Responses of the 

United States Postal Service to Questions 1-8 of Chairman’s Information Request No. 12, March 14, 

2014, questions 6(a), 7(a), 7(b) (Postal Service Response to CHIR No. 12).
Review of FY 2013 Performance Report FY 2013 Annual Performance Report

and FY 2014 Performance Plan and FY 2014 Annual Performance Plan

7

The FY 2013 Report provides results against the FY 2013 Plan targets and serves as a baseline for 

establishing the FY 2014 Plan targets.13

The FY 2014 Plan contains four performance goals:14

 Service (% on-time);

 Customer Experience;

 Financial Results; and

 Workplace Environment.

The Postal Service uses twenty-one performance indicators to measure progress toward its performance 

goals and strategic initiatives.

15

 Thirteen performance indicators were included in its FY 2013 Report

and FY 2014 Plan and another eight related to its strategic initiatives it had previously identified in its 

FY 2012 Report and FY 2013 Plan.

16

Table 2 lists each performance goal and performance indicator used by the Postal Service in the FY 2013 

Report and FY 2014 Plan. A summary of performance goal results are shown in Table 2 followed by a 

detailed discussion for each of the performance goals.

 

13 The Postal Service explains that while Corporate Responsibility was introduced and referenced as a 

corporate goal in the FY 2012 Comprehensive Statement on Postal Operations, it was never intended to be viewed 

as a performance goal. Postal Service Response to CHIR No. 15, question 11.

14 FY 2013 Annual Report to Congress at 38.

15 The Postal Service uses three non-public performance measures for Priority Mail, Express Mail and 

Parcel Select. The Postal Service did not meet any of these targets in FY 2013.

16 Neither the strategic initiative performance indicators (also called cross-portfolio indicators) nor targets 

were included in the Postal Service’s FY 2013 Report. These performance indicators were provided in Docket 

No. ACR2013, Responses of the United States Postal Service to Questions 1-9 of Chairman’s Information 

Request No. 10, March 4, 2014, question 6 (Postal Service Response to CHIR No. 10). The associated FY 2014 

targets were provided in the Postal Service Response to CHIR No. 15, question 5.
Review of FY 2013 Performance Report FY 2013 Annual Performance Report

and FY 2014 Performance Plan and FY 2014 Annual Performance Plan

8

Table 2

Performance Goals by Performance Indicator Results and Targets

Performance 

Goals

Performance 

Indicator

2009

Actual

2010

Actual

2011

Actual

2012 

Actual

2013

Actual

2013

Target

2014

Target

Service

(% on-time)

Single-Piece First-Class

Mail Overnight 96.2% 96.4% 96.2% 96.5% 96.1% 96.7% 96.8%

Single-Piece First-Class 

Mail 2-day

93.7% 93.7% 93.3% 94.8% 95.3% 95.1% 96.5%

Single-Piece First-Class 

Mail 3-5-day 92.2% 92.4% 91.9% 92.3% 91.6% 95.0% 95.25%

Presort First-Class 

Mail Overnight N/A N/A N/A 96.8% 97.2% 96.7% 96.8%

Presort First-Class 

Mail 2-day N/A N/A N/A 95.7% 97.0% 95.1% 96.5%

Presort First-Class 

Mail 3-5-day N/A N/A N/A 95.1% 95.1% 95.0% 95.25%

First-Class Composite N/A N/A N/A N/A N/A N/A 96.0%

Standard Composite N/A N/A N/A N/A N/A N/A 91.0%

Customer 

Experience*

CEM ScoreConsolidated 

Residential & 

Small/Medium

Business Customers, 

Multiple Survey 

Questions

N/A N/A N/A 79.0** 78.4 82.5 82.5

Financial 

Results

Operating Income 

(Loss)

($ billions)

N/A N/A (2.7) (2.4) (1.0) (2.0) 1.1

Deliveries per Hour N/A N/A 39.9 41.0 41.6 42.7 43.3

Workplace 

Environment

OSHA Illness and 

Injury Rate 5.71 5.76 6.03 5.78 5.61 5.72 5.55

Voice of the Employee 

Survey 64.0 62.3 64.7 64.7 64.7 64.9 65.1

Source: FY 2013 Annual Report to Congress at 39 (footnotes omitted).

*The Postal Service’s original table contains the percentage of customers who are Mostly or Very Satisfied with the 

Postal Service’s overall performance. Postal Service Response to CHIR No. 10, question 3(c). For FY 2010, FY 2011, 

and FY 2012, 86.4%, 87.2%, and 88.4%, respectively, of residential customers and 81.8%, 83.0%, and 84.1%, 

respectively, of small/medium business customers were Mostly or Very Satisfied. No performance targets were set. 

These percentages are not comparable to the consolidated CEM score shown in the body of Table 2.

**United States Postal Service 2012 Annual Report to Congress at 39 (FY 2012 Annual Report to Congress).

N/A—not applicable. No target set or new performance measure.
Review of FY 2013 Performance Report Performance Goal 1: Service (% On-Time)

and FY 2014 Performance Plan

9

PERFORMANCE GOAL 1: SERVICE (% ON-TIME)

Postal Service’s Filing

In FY 2012, presort First-Class Mail was combined with Single-Piece First-Class Mail to measure all 

First-Class Mail performance. 17 For presort First-Class Mail, the Postal Service uses a hybrid 

measurement approach. This measurement approach combines Full Service Intelligent Mail barcode 

(IMb) data from commercial mailers to measure time from mail acceptance to final processing. FirstClass Composite combines Single-Piece First-Class Mail and commercial First-Class Mail performance for 

an aggregate of overnight, 2-day, and 3-5-day service. Standard Composite combines Standard Mail 

destination entry for sectional center facility and National Distribution Center letters and flats. Data are 

collected from sources outside of the Postal Service to measure transit time from final processing on 

mail processing equipment through actual delivery. The processing and delivery data are aggregated, 

combined, and reviewed to measure overall commercial mail performance. Id.

Comments

The Public Representative does not believe that Service performance has materially improved. He 

hypothesizes that First-Class Mail shows improvement only because delivery standards were changed to 

add an additional day to most service standards for First-Class Mail.18

Commission Analysis

Overall, the Postal Service partially met the Service performance goal because it met some, but not all, 

targets for the service performance indicators.

Table 2 shows the eight performance indicators used to measure the Service performance goal, with 

their targets and results. Comparisons between FY 2012 and FY 2013 service performance must be 

viewed in light of service standard changes associated with the Mail Processing Network Rationalization 

initiative.19 This initiative changed service standards by shifting much of the volume of mail previously 

subject to the overnight service standard to either the 2-day or 3-5-day service standard.

In FY 2013, service performance results were mixed. For presort First-Class Mail, all performance 

indicator targets were met. Single-Piece First-Class Mail performance results were mixed. The service

performance indicator result of 95.3 percent for Single-Piece First-Class Mail 2-day exceeded the 

FY 2013 target of 95.1 percent. However, the FY 2013 service performance score for Single-Piece FirstClass Mail Overnight (96.1) was slightly below the FY 2013 target (96.7). The FY 2013 Single-Piece FirstClass Mail 3-5-day service performance score (91.6) was lower than the FY 2013 target (95.0) by almost 

3.5 percentage points. FY 2014 targets are also higher than FY 2013 targets.

 

17 FY 2013 Annual Report to Congress at 40.

18 PR Comments at 11.

19 See Docket No. N2012-1, Advisory Opinion on Mail Processing Network Rationalization Service Changes, 

September 28, 2012.
Review of FY 2013 Performance Report Performance Goal 1: Service (% On-Time)

and FY 2014 Performance Plan

10

The Postal Service did not provide the plans and schedules for achieving service performance targets for 

FY 2014 as part of its FY 2014 Plan. However, in response to a CHIR, it explains that it will apply Lean 

Mail Processing principles to improve efficiency, reduce cycle time, and eliminate waste.20 In addition, it 

states that the Chief Operating Officer also conducts a monthly Area service review with Area executives 

that include all service products. Id.

In the FY 2012 ACD, the Commission recommended that the Postal Service include other market 

dominant products as Service performance indicators to facilitate comparisons in Annual Performance 

Reports and Plans.21 The FY 2013 Report and FY 2014 Plan contain five new performance indicators that 

support the Service performance goal and related strategic initiatives. The Postal Service introduced 

three presort First-Class Mail performance indicators along with their FY 2013 measurements and 

FY 2013 targets. It also proposed both a Standard Composite and a First-Class Composite performance 

indicator for the Service performance goal, but did not measure service for these performance 

indicators in FY 2013. The Commission finds it encouraging that the Postal Service is now measuring 

performance and setting targets for other market dominant products.

 

20 Postal Service Response to CHIR No. 15, question 10(c).

21 FY 2012 ACD at 34.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

11

PERFORMANCE GOAL 2: CUSTOMER EXPERIENCE

Postal Service’s Filing

As part of its FY 2013 ACR, the Postal Service filed the “Market Dominant Product Customer Satisfaction 

Measurement Survey Instruments” as a library reference.22 This library reference includes a summary 

Customer Experience Measurement (CEM) survey data file generated by use of three survey 

instruments.23 The Postal Service assesses and scores the customer experience for residential and 

small/medium business customers.24 These residential and small/medium CEM business performance 

scores are based on survey responses for specific customer experiences. Id. CEM scores were reported 

as the percentage of residential and small/medium business survey respondents that rated their overall 

satisfaction with the Postal Service as Very Satisfied or Mostly Satisfied.25 These scores were provided 

both individually and as a combined score. However, no individual targets were set. In both FY 2012 

and FY 2013, CEM scores for residential and small/medium business customers were combined to create

one performance indicator for which a target had been set.

26

 This combined CEM score of 78.4 did not 

meet the performance indicator target of 82.5 in FY 2013.

27

The Postal Service notes that the Customer Experience goal is measured by national surveys of 

residential and small/medium business customers.

28

 While the Postal Service also surveys large 

business customers, these survey data are not used in assessing performance towards the Customer 

Experience goal. The current CEM score combines only the residential and small/medium business 

survey data for performance measurement of the Customer Experience goal. The Postal Service 

 

22 See Docket No. ACR2013, Library Reference USPS-FY13-38.

23 Id. These are the residential customer, small/medium business customer, and the large business 

customer surveys.

24 Postal Service Response to CHIR No. 10, question 3(a).

25 In the Postal Service’s annual reports, performance targets for these customer experience values were 

not presented based on responses to the same survey question. On the residential customer survey, the percent 

of residential customers is based on those who responded Very Satisfied or Mostly Satisfied to the question: “First 

of all, thinking about all aspects of your recent experiences with the U.S. Postal Service, how satisfied are you with 

us?” On the small/medium business customer survey, the percent of small/medium business customers is based 

on those who responded Very Satisfied or Mostly Satisfied to the question: “First of all, thinking about all aspects 

of recent experiences your business has had with the U.S. Postal Service, how satisfied are you with us?”

26 FY 2013 Annual Report to Congress at 39, 40.

27 In FY 2012, the Customer Experience score was 79 percent. The Postal Service confirmed that the FY 

2012 overall Customer Experience score (National Performance Assessment Index) was calculated using the same 

methodology used in FY 2013. Postal Service Response to CHIR No. 10, question 3(b); FY 2012 Annual Report to 

Congress at 39.

28 FY 2013 Annual Report to Congress at 38. Small/medium businesses are described in the CEM survey as 

having less than 250 employees at one site. Docket No. ACR2013, Library Reference USPS-FY13-38.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

12

explained that survey methodology differences preclude the large business survey data from being 

consolidated in the CEM score performance indicator.

29

Table 3 illustrates the Postal Service’s consolidation methodology for calculating the overall CEM score

for residential and small/medium business customers. The residential customers’ survey response 

results for each of the four survey questions is given equal (25 percent) weight. The same is true for the 

same survey question response results of the small/medium business customers. The overall CEM score 

is calculated by giving combined question survey results a weight of 65 percent for the small/medium 

business customer responses, and a weight of 35 percent for the residential customer responses.

 

29 Postal Service Response to CHIR No. 10, question 1.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

13

Table 3

CEM Score Consolidated Surveys and Questions, Detailed Calculation, FY 2013

Residential Customers

Top 2 Box Survey Responses 

(Very/Mostly Satisfied)*

Column (1)

Weight

Column (2)

Result

Columns (1) x (2)=(3)

Column (3)

Experience with Receiving 91.0 25% 22.7

Experience with Sending 90.7 25% 22.7

Experience with most visited Post Office 85.0 25% 21.2

Experience with most recent USPS contact 61.5 25% 15.4

Subtotal = 82.0 

(Sum of Residential Result Column 3)

Small/Medium Business 

Customers

Top 2 Box Survey Responses 

(Very/Mostly Satisfied)*

Column (1)

Weight

Column (2)

Result

Columns (1) x (2)=(3)

Column (3)

Experience with Receiving 87.7 25% 21.9

Experience with Sending 86.7 25% 21.7

Experience with most visited Post Office 80.1 25% 20.0

Experience with most recent USPS contact 51.0 25% 12.7

Subtotal = 76.4

(Sum of Business Result Column 3)

CEM Subtotal Weighted Consolidated 

Experiences

Column (1)

Weight

Column (2)

Result

Columns (1) x (2)=(3)

Column (3)

Residential Customers Subtotal 82.0 35% 28.7

Small/Medium Business Customers Subtotal 76.4 65% 49.7

CEM Performance Score = 78.4

(Sum of CEM Subtotal Result Column 3)

Source: Id., question 3(a).

*The ‘Top 2 Box’ is the percentage of residential and small/medium business respondents that answer the question with one of the top 

two options on the 6-point response scale. 
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

14

According to the Postal Service, it provides detailed diagnostic reports that identify specific post offices 

with opportunities to improve customer experience. It is also reviewing the current complaint handling 

processes to determine gaps and identify recommendations that would positively impact customer 

experience when they contact the Postal Service.30 The FY 2014 target of 82.5 for the consolidated CEM

score is the same as the FY 2013 target. Id. at 39.

The Postal Service is also redesigning the customer satisfaction program to measure “customers’ event

based experience across multiple channels and touch points.”31 The Postal Service intends to implement 

this approach for FY 2014.32 According to the Postal Service, the current CEM measures a customer’s 

perception of his or her last experience with the Postal Service, regardless of when that experience took 

place.33

To improve the Customer Experience measurement processes, the Postal Service plans to use a tool it 

refers to as a Customer Insights Measurement (CIM). The Postal Service reports that the CIM is 

based on customer interactions at various touch points, as well as 

customer inquiries and complaints regarding postal products, services, 

and corporate initiatives. The Postal Service is developing systems and 

processes to measure satisfaction of resolution with a target of 90 

percent and to reduce repeat customer complaints by 50 percent by 

2017.34

Comments

The Public Representative points out that unlike last year when the Postal Service reported in its FY 2012 

ACR35 that customer satisfaction ratings increased over FY 2011, in FY 2013, a substantial number of 

product satisfaction ratings declined between 2012 and 2013.36

The Public Representative suggests that the Postal Service examine the relationship between the survey 

answers that identify preferences and problems as well as the four survey questions used to construct 

the CEM score to improve its customer satisfaction this year. Id.

 

30 FY 2013 Annual Report to Congress at 40.

31 Postal Service Response to CHIR No. 12, question 6.

32 Postal Service Response to CHIR No. 15, question 1.

33 Docket No. ACR2013, Responses of the United States Postal Service to Questions 1-3, 5-6 of Chairman’s 

Information Request No. 16, March 26, 2014, question 1(a) (Postal Service Response to CHIR No. 16).

34 Postal Service Response to CHIR No. 12, question 6.

35 See Docket No. ACR2012, United States Postal Service FY 2012 Annual Compliance Report, December 

28, 2012, at 35 (FY 2012 ACR).

36 PR Comments at 12-14.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

15

The Public Representative believes the Postal Service should provide the Customer Experience 

measurement data by completed survey rather than aggregated data so that others might also examine 

these issues. Id. at 14 n.12.

Commission Analysis

CEM Residential and Small/Medium Business Consolidated Survey Experiences

The Postal Service did not meet its Customer Experience performance goal in FY 2013.

In FY 2013, based on the survey “check all that apply” contact modes, residential and small/medium 

business respondents recently contacted the Postal Service multiple times to report a problem.37 The 

Postal Service reports it is reviewing its current complaint handling processes to “determine gaps and 

identify recommendations that would positively impact customers’ experience when they contact the 

Postal Service. [Its] intent is to improve processes and enhance systems in ways that support timely and 

thorough resolution of customer concerns and inquiries.”38

The Commission agrees with the Public Representative that the Postal Service should provide 

disaggregated CEM survey responses. A consolidated CEM score makes it difficult for the Postal Service 

and others to identify gaps and determine if processes are improving customer experience. Also, the 

current consolidated experiences CEM performance score approach masks specific program results. An 

overall customer experience performance measure that aggregates results from unrelated survey 

questions makes it difficult to determine which specific program activity resulted in improvements or 

declines in Customer Experience. Using performance/program activity data in a disaggregated, 

quantifiable form would allow for better identification of areas where performance improved or 

declined, as well as the programs that were successful in generating improvement. Other year-to-year 

changes and large differences between different customer experiences would also be easier to identify.

For example, as part of its review, the Commission requested disaggregated data from the Postal Service

in a CHIR. The data provided indicates that customer satisfaction with contacting the Postal Service for 

residential and small/medium business customers is substantially lower than other customer 

experiences.

39

 As shown in Table 4, the unweighted residential and small/medium business customers’ 

satisfaction with their Postal Service contact experience decreased more than their other experiences 

between FY 2012 and FY 2013.40

 

37 It is unclear from the survey question whether this contact is related to the same or different problems.

38 FY 2013 Annual Report to Congress at 40.

39 Postal Service Response to CHIR No. 10, question 3(a).

40 This conclusion is based on the unweighted survey responses for both residential and small/medium 

business CEM customers. The disaggregated components used to calculate the sample weight for each of the CEM 

survey respondents were not provided by the Postal Service despite an attempt to obtain this information through 

an information request.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

16

Table 4

Residential and Small/Medium Business CEM Survey Respondents, Satisfaction with 

Customer Experiences Data Used for Consolidation in the CEM Score, FY 2012 and FY 2013

Residential CEM 

Survey

Percent Very or 

Mostly Satisfied*

FY 2013

Residential CEM Survey

FY 2012

Residential CEM Survey

Satisfaction with 

Experience FY 2013 FY 2012

Number of 

Respondents**

Very or 

Mostly 

Satisfied 

Number of 

Respondents**

Very or 

Mostly 

Satisfied 

Receiving Mail 91.0% 91.2% 299,145 272,217 301,135 274,721

Sending Mail 90.7% 90.8% 260,089 235,930 263,064 238,969

Post Office Visit 85.2% 85.2% 291,468 248,416 294,245 250,709

Contacting USPS 62.0% 63.5% 29,387 18,211 30,172 19,158

Small/Medium 

Business CEM 

Survey 

Percent Very or 

Mostly Satisfied*

FY 2013

Small/Medium Business

CEM Survey

FY 2012

Small/Medium Business

CEM Survey

Satisfaction with 

Experience FY 2013 FY 2012

Number of 

Respondents**

Very or 

Mostly 

Satisfied 

Number of 

Respondents**

Very or 

Mostly 

Satisfied

Receiving Mail 87.9% 88.4% 297,506 261,560 322,871 285,544

Sending Mail 86.9% 87.4% 265,726 230,985 289,193 252,852

Post Office Visit 80.8% 81.0% 289,796 234,076 315,128 255,205

Contacting USPS 52.5% 54.4% 32,273 16,938 36,157 19,687

*Small differences between these and the 

Postal Service’s values are due to the Postal 

Service multiplying the survey responses by 

their associated sample weights and then 

calculating percentages.

**Those that did not respond to the question or checked 

multiple responses were not included in the percent 

calculations.

Source: Docket No. ACR2013, Library Reference USPS-FY13-38, CEM Question Response Counts_FY13_Final.xlsx, 

‘Residential’ and ‘Small_Med Business’ worksheets and Docket No. ACR2012, Library Reference USPS-FY12-38, CEM 

Question Response Counts_FY12_Final.xlsx, ‘Residential’ and ‘Small_Med Business’ worksheets.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

17

In its FY 2014 Report, the Commission suggests that the Postal Service provide a basis for comparing 

actual contact program results with the Customer Experience performance indicator and goal and 

consider presenting the CEM scores in a disaggregated form. See 39 U.S.C. § 2803(a)(5). The 

Commission requests that the Postal Service provide the disaggregated survey responses and the 

accompanying survey sample weight for each survey response so that year-to-year changes between 

customer groups can be examined more precisely. The provision of each survey sample weight will 

allow for more accurate percentages and the ability to calculate and detect statistically significant 

differences.

Large Business Customers CEM Survey41

To measure customer satisfaction with market dominant products, the Postal Service surveys large 

business customers and reports the survey results in its ACR to the Commission.42 39 U.S.C. 

§ 3652(a)(2)(B)(ii) also requires the Postal Service to provide measures of the degree of customer 

satisfaction with the service provided for its market dominant products. However, scores from the large 

business customers’ survey are not used to measure the Postal Service’s performance for the Customer 

Experience goal.

The Postal Service explained that survey methodology differences preclude the large business survey 

data from being consolidated into the CEM score. Residential and small/medium business customers 

are sampled at the performance cluster level and large business customers are sampled at the national 

level.

43 The Commission finds that Postal Service’s survey consolidation reasoning comports with the 

sampling methodology of the residential and small/medium business survey data. However, the Postal 

Service does not explain in the FY 2013 Report and FY 2014 Plan why it does not measure the large 

business customer experience.

39 U.S.C. § 2803(a)(4) states that the Postal Service is to establish performance indicators to be used in 

measuring relevant service levels. Large business customers represent a relevant service level. 

Consequently, a performance indicator for this group should be identified to measure progress toward 

meeting the overall Customer Experience goal.

Although the results of the large business customer survey are not included in the CEM score, the 

Commission was able to use the CEM survey to further analyze large business customer experiences.

44

 

41 CEM surveys are provided pursuant to 39 C.F.R. § 3055.92. See Docket No. ACR2013, Library Reference 

USPS-FY13-38.

42 See FY 2013 ACR at 42-43.

43 Postal Service Response to CHIR No. 10, question 1; FY 2013 ACR at 42. The FY 2013 ACR states that all 

customers are sampled sufficiently to ensure a minimum precision level of + / - three percentage points at the 95 

percent level of confidence per postal quarter.

44 The CEM system divides customers into three groups: (1) residential, (2) small/medium business, and 

(3) large business. FY 2012 ACR at 35.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

18

In FY 2013, for half of the market dominant products, overall large business customer satisfaction results 

were lower than in FY 2012.45

As shown in Table 5, a number of market dominant product-specific scores for large business 

customers—related to consistency of delivery, accuracy of delivery, condition of mail upon delivery, and 

tracking—declined between FY 2012 and FY 2013. This conclusion is based on the unweighted, 

aggregated, large business customer survey responses provided in Library Reference USPS-FY13-38 and 

Library Reference USPS-FY12-38.46

 

45 See FY 2013 ACR at 43.

46 Sample weights were requested in Docket No. ACR2013, Chairman’s Information Request No. 12, March 

6, 2014, question 4(a) (CHIR No. 12), but not provided by individual survey response.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

19

Table 5

Summary of Large Business Customers’ Experience with Market Dominant Products

Top 2 Survey 

Responses Combined

(Percent Strongly or 

Somewhat Agree)

First-Class International Standard Periodicals Parcel Post Media

Bound Printed 

Matter Library Mail

FY FY FY FY FY FY FY FY

2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

Consistently delivered 

when expected 80.6% 83.1% 77.5% 76.9% 80.3% 84.0% 73.9% 77.8% 80.4% 81.4% 76.5% 76.7% 71.7% 76.0% 75.1% 78.9%

Delivered to right 

address 79.9% 81.4% 80.8% 81.0% 80.6% 83.7% 75.9% 77.5% 83.1% 84.2% 78.7% 78.9% 72.3% 76.3% 78.8% 79.8%

Delivered in good 

condition 88.6% 88.9% 81.3% 80.9% 84.6% 86.0% 76.2% 78.3% 82.5% 84.8% 79.2% 78.9% 73.2% 76.5% 78.6% 79.3%

Shipping materials that I 

need are available 86.8% 88.0% 78.5% 79.6% 83.1% 84.0% 73.0% 76.1% 77.8% 81.2% 74.1% 76.3% 71.9% 74.8% 72.0% 74.7%

USPS provides the 

equipment I need for 

mailing 70.6% 73.5% 66.1% 69.8% 74.8% 78.2% 66.9% 71.3% 69.9% 73.5% 66.7% 68.8% 64.8% 69.5% 64.7% 69.5%

If I purchase the service, 

the USPS tracking is 

effective 80.7% 82.5% 73.8% 73.0% 78.6% 79.9% 69.8% 72.3% 77.6% 78.0% 74.2% 72.6% 68.2% 71.0% 72.6% 70.0%

ce: Docket No. AC Source: Docket No. ACR2013, Library Reference USPS-FY13-38, CEM Question Response Counts_FY13_Final.xlsx, ‘Large Business’ worksheet. 

Only the unweighted sample survey responses were provided. For comparative purposes, ‘Don’t Know’ responses were not included in the FY 2013 denominator percent calculation because 

the Postal Service did not include the ‘Don’t Know’ responses in the FY 2012 file. See Docket No. ACR2012, Library Reference USPS-FY12-38, CEM Question Response 

Counts_FY12_Final.xlsx, ‘Large Business’ worksheet.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

20

Some large business CEM survey contacts differ from residential and small/medium business CEM 

survey contacts. As shown in Table 6, all but the plant management contact point for large businesses 

show a decrease in satisfaction in absolute percentage value. The decrease is based on the unweighted 

large business customer survey responses. The Postal Service did not provide the survey sample weights 

in Library Reference USPS-FY13-38 or in response to an information request. Since the number of 

respondents for each of the contact points is smaller than the total number of respondents, it is likely 

that there is more variability around these values from year to year.47

 

47 The associated sample weights for each of the survey respondents would increase the precision of the 

analysis.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

21

Table 6

Large Business CEM Respondents, Satisfaction with Postal Service Contact Points 

FY 2012 and FY 2013

Contact 

Point

Top 2 Survey 

Responses

Combined

(Very/Mostly 

Satisfied) Very Mostly Somewhat Somewhat Mostly Very

Plant Management Satisfied Dissatisfied

FY 2013 69.4% FY13 36.8% 32.6% 19.9% 4.6% 3.7% 2.5%

FY 2012 67.8% FY12 37.1% 30.7% 20.9% 5.8% 3.3% 2.2%

Post Office

FY 2013 79.3% FY13 51.3% 27.9% 10.7% 5.3% 2.2% 2.6%

FY 2012 80.7% FY12 53.8% 26.9% 10.6% 3.9% 2.6% 2.3%

Bulk Mail Entry Unit Staff

FY 2013 79.9% FY13 47.7% 32.2% 13.2% 3.2% 2.5% 1.1%

FY 2012 81.6% FY12 50.5% 31.1% 11.9% 2.9% 1.7% 1.8%

Detached Mail Unit Staff

FY 2013 73.8% FY13 41.7% 32.0% 19.7% 2.6% 1.8% 2.1%

FY 2012 76.3% FY12 46.9% 29.4% 18.9% 2.4% 1.2% 1.2%

Self-service:

www.usps.com

FY 2013 80.9% FY13 39.8% 41.0% 13.6% 3.1% 1.5% 0.9%

FY 2012 82.1% FY12 43.0% 39.0% 14.2% 1.9% 1.3% 0.5%

Business Service Network 

Representative

FY 2013 78.5% FY13 44.8% 33.7% 16.5% 2.2% 1.8% 1.0%

FY 2012 81.1% FY12 49.6% 31.4% 12.9% 3.6% 1.7% 0.7%

Sales Manager

FY 2013 74.9% FY13 41.5% 33.4% 18.6% 3.6% 1.9% 1.1%

FY 2012 75.2% FY12 43.9% 31.4% 19.0% 3.6% 1.5% 0.7%

District Management

FY 2013 66.3% FY13 34.0% 32.3% 22.8% 3.9% 4.9% 2.2%

FY 2012 71.3% FY12 39.2% 32.1% 19.6% 4.8% 2.7% 1.6%

Source: Docket No. ACR 2013, Library Reference USPS-FY13-38, CEM Question Response Counts_FY13_Final.xlsx and Docket 

No. ACR 2012, USPS-FY12-38, CEM Question Response Counts_FY12_Final.xlsx, ‘Large Business’ worksheets. Only the 

unweighted sample survey responses were provided.

According to the CEM survey design, large business survey customers with 250 or more employees at 

one location are mailed an invitation and asked to complete an online survey.48 The self-identified 

“large business” survey responses are shown in Table 7, and a substantial portion do not appear to 

 

48 Docket No. ACR2013, Library Reference USPS-FY13-38.
Review of FY 2013 Performance Report Performance Goal 2: Customer Experience

and FY 2014 Performance Plan

22

represent the targeted large business customers.

49

 For the years shown below, the percentage of 

respondents not identifying themselves as the sampled targeted survey group is increasing.

Table 7

CEM Large Business Survey Responses—FY 2011-FY 2013

“About how many people are employed at your location?”

Responses FY 2013 FY 2012 FY 2011

% of Total Survey 

Respondents with 

<250 Employees 

40% 39% 36%

Number of Employees

Less than 100 714 758 726

100-249 652 762 832

250-500 1,023 1,159 1,358

501-750 383 387 483

751-1000 223 225 278

More than 1000 388 497 544

No Response 51 73 139

Total 3,434 3,861 4,360

Source: Docket No. ACR2011, Library Reference USPS-FY11-38, CSM Question Response 

Counts_FY11_Final.xlsx; Docket No. ACR2012, Library Reference USPS-FY12-38, CEM Question Response 

Counts_FY12_Final.xlsx; Docket No. ACR2013, Library Reference USPS-FY13-38, CEM Question Response 

Counts_FY13_Final.xlsx, ‘Large Business’ Worksheets.

As discussed above, to ensure that the satisfaction of all Postal Service customers is being addressed, 

the Postal Service should include a Customer Experience performance indicator and target measure for 

large business customer experiences. The Postal Service should ensure that the survey results reflect 

the customer experience of the targeted respondents.

 

49 The survey response options are shown as: less than 250, 250-500, 501-750, 751-1000 and more than 

1,000 on the Large Business Survey-11-26-2013.pdf; Large Business Survey_FY12.pdf, the summary response 

categories in the response counts file, CEM Question Response Counts_FY13_Final.xlsx and CEM Question 

Response Counts_FY12_Final.xlsx, ‘Large Business’ worksheets contain the response groups listed in Table 7. See

files in Docket No. ACR2013, Library Reference USPS-FY13-38 and Docket No. ACR2012, Library Reference 

USPS-FY12-38.
Review of FY 2013 Performance Report Performance Goal 3: Financial Results

and FY 2014 Performance Plan

23

PERFORMANCE GOAL 3: FINANCIAL RESULTS

Postal Service’s Filing

The Postal Service uses Operating Income (Loss) and DPH as performance indicators for the Financial 

Results performance goal. In FY 2013, the Postal Service had a net operating loss of $1 billion, which 

was $1 billion better than the FY 2013 target operating loss of $2 billion.50 Operating Income (Loss)

excludes the expense impact of workers’ compensation discount rate changes and actuarial changes of 

the price of goods or products, as well as the Postal Service Retiree Health Benefit Fund (RHBF) 

payments. Id. at 39 n.5. For FY 2014, the target has increased to an operating income of $1.1 billion. Id.

at 39.

According to the Postal Service, DPH is an efficiency measure comparing the total number of deliveries 

of all types with the total number of workhours used in all employee categories.51 The total number of 

deliveries is calculated by multiplying the number of delivery points by the number of delivery days. 

This number is then divided by the total number of workhours used in all employee categories, including 

managers and executives. The result is the number of annual deliveries completed per workhour used.52

In FY 2013, the DPH of 41.6 did not meet the FY 2013 target of 42.7.

53

 The Postal Service claims the 

primary reason the FY 2013 target was not met was that mail volume was significantly higher in FY 2013 

than the Postal Service planned at the start of the year. Id. at 42. Other factors included less

centralization of business deliveries and the hiring and training of many new non-career employees. Id. 

The number of non-career employees rose from 100,570 in FY 2012 to 126,697 in FY 2013. Id. at 35. 

The DPH target for FY 2014 is 43.3, an increase over the FY 2013 target of 42.7. Id. at 39.

Comments

The Public Representative observes that management has progressed in meeting the Financial Results 

performance goal with operating losses reduced to $2.5 billion, measured without the RHBF and other 

amounts. He states that in FY 2013, DPH increased slightly from 41 to 41.6, but did not reach the target 

of 42.7. He notes that the FY 2014 target remains aggressive at 43.3. He points out that the Postal 

Service includes TFP in its FY 2013 Report and FY 2014 Plan as the Commission had recommended. He 

asserts that TFP is a longer term measure of productivity and has increased steadily by just over 20 

percent per year since 2009.54

 

50 FY 2013 Annual Report to Congress at 39.

51 Docket No. ACR2011, Annual Compliance Determination Report, Fiscal Year 2011, March 28, 2012, at 47 

(FY 2011 ACD).

52 Id. The Postal Service provided the DPH calculation in a spreadsheet in the Postal Service Response to 

CHIR No. 10, question 7, file CHIR10.Q7-DPH.calculation.xls.

53 FY 2013 Annual Report to Congress at 39.

54 PR Comments at 15.
Review of FY 2013 Performance Report Performance Goal 3: Financial Results

and FY 2014 Performance Plan

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Commission Analysis

The Postal Service partially met this performance goal. As the Public Representative notes, the FY 2013 

DPH of 41.6 did not meet the target of 42.7; however, the operating loss was less than forecasted. The 

Commission agrees that the Postal Service has progressed in meeting the Financial Results performance 

goal in that the net operating loss of $1 billion was less than the projected loss in FY 2013 due to the 

higher than projected mail volume.55 Nevertheless, in FY 2013, the Postal Service reported its seventh 

consecutive year of financial loss, amassing a total net deficit of $46.2 billion since FY 2007.56 The 

growing net deficit has eroded Postal Service liquidity, resulting in the maximum use of available debt, 

and put the Postal Service in a situation where its net liabilities exceed its net assets. Id. These factors 

impede the Postal Service’s progress towards achieving the Financial Results performance goal. 

Additional information on the Postal Service’s financial condition can be found in the Commission’s 

Financial Analysis Report. Id.

As shown in Table 8, total workhours continue to decrease despite annual increases in the number of 

delivery points. The FY 2013 Annual Report to Congress states that almost half of Postal Service 

personnel costs are directly attributable to delivery.57

 

55 Compare Integrated Financial Plan, Fiscal Year 2013, November 23, 2012, at 1 with USPS 2013 Report 

on Form 10-K, January 31, 2014, at 21 (FY 2013 Form 10-K Report). 

56 Docket No. ACR2013, Analysis of United States Postal Service Financial Results and 10-K Statement for 

Fiscal Year 2013 (Revised April 10, 2014), April 10, 2014, at ii (Financial Analysis Report).

57 FY 2013 Annual Report to Congress at 54.
Review of FY 2013 Performance Report Performance Goal 3: Financial Results

and FY 2014 Performance Plan

25

Table 8

Workhours by Function

FY 2013 2012 2011 % Change

Workhours by Function (Workhours in thousands) 2013/2012 2012/2011

City Delivery 393,986 389,219 399,010 1.2% (2.5%)

Mail Processing 203,802 210,170 215,221 (3.0%) (2.3%)

Rural Delivery 176,697 177,715 177,384 (0.6%) 0.2%

Customer Service 

Operations

138,477 144,309 150,203 (4.0%) (3.9%)

Postmasters 56,028 58,429 59,484 (4.1%) (1.8%)

Other* 140,841 142,309 147,535 (1.0%) (3.5%)

Total Workhours 1,109,831 1,122,151 1,148,837 (1.1%) (2.3%)

* Including Vehicle Services, Plant Maintenance, Operational Support, and Administration. 

Source: FY 2013 Form 10-K Report at 30.

In its FY 2010 ACD, the Commission recommended using the TFP index rather than DPH as a measure of 

productivity because DPH does not recognize major workload components, such as collecting, 

processing, transporting, and sequencing of mail for delivery.58 In addition, there is an inconsistency in 

the workload/resources component of the DPH ratio because the Postal Service currently includes 

highway contract delivery points in the numerator of the DPH ratio without an accompanying measure 

of the direct labor resources (workhours) in the denominator.59 The DPH denominator only includes 

workhours of Postal Service employees.

The Postal Service describes the growth in city delivery workhours as beneficial overall because newly 

hired 30,433 city carrier assistants resulted in lowering the overall cost of city delivery by $120 million.60 

However, due to the simplicity of the DPH calculation and components, the increased workhours 

(regardless of the actual cost) in the denominator of the ratio contributed to the Postal Service not 

meeting its DPH target. The Commission remains concerned about using DPH as a meaningful financial 

 

58 Docket No. ACR2010, Annual Compliance Determination Report, Fiscal Year 2010, March 29, 2011, at 

38, 54 (FY 2010 ACD).

59 The FY 2013 Form 10-K Report shows the FY 2013 highway contract delivery points figure to be close to 

16 million. FY 2013 Form 10-K Report at 107. It is not clear if this is an error because the Postal Service’s FY 2013 

Annual Report to Congress shows the number of highway contract delivery points to be close to 3 million. FY 2013 

Annual Report to Congress at 55.

60 FY 2013 Form 10-K Report at 31.
Review of FY 2013 Performance Report Performance Goal 3: Financial Results

and FY 2014 Performance Plan

26

performance indicator. The Commission finds that TFP is a better index because it measures the ratio of 

total workload to total resource usage.61

The Postal Service reports that “[t]he growth rate of new delivery points has slowed in recent years, 

compared to pre-recession levels, due to lower housing starts.”62 Despite an increase of 773,882 new 

delivery points in FY 2013, the Postal Service reduced the total number of routes by 1,847 (from 226,999 

to 225,152).63

The FY 2013 Annual Report to Congress states that to improve delivery efficiency, the Postal Service 

converted 43,333 business and 36,302 residential deliveries to centralized deliveries. Id.

 

61 Workload consists of weighted mail volume, miscellaneous output, and the expanding delivery network. 

Resources consist of labor, materials (including purchased transportation), and deployed capital assets. Workload 

growth minus the growth of resources used equals TFP growth.

62 FY 2013 Form 10-K Report at 30.

63 FY 2013 Annual Report to Congress at 54.
Review of FY 2013 Performance Report Performance Goal 4: Workplace Environment

and FY 2014 Performance Plan

27

PERFORMANCE GOAL 4: WORKPLACE ENVIRONMENT

Postal Service’s Filing

The Postal Service relies on two performance indicators to evaluate progress towards its performance 

goal of Workplace Environment. First, it uses the OSHA I&I Rate to measure improvements in safety. 

The OSHA I&I Rate is calculated by multiplying the total number of OSHA injuries and illnesses by 

200,000 hours, which represents 100 employees working 2,000 hours per year.64 That number is then

divided by the number of exposure hours worked by all employees. Id.

In FY 2013, the OSHA I&I Rate of 5.61 was better than the FY 2013 target of 5.72 and a 2.94 percent 

improvement over FY 2012. Id. at 39, 42. According to the Postal Service, the OSHA I&I Rate is also 15 

percent better than the comparable private sector industry average rate of 6.60. Id. at 65. It reports 

that the reason for the decline in exposure hours was continued emphasis on safety process 

improvements, training, and correction of unabated hazards. Id. at 42. The target for FY 2014 is 5.55, 

which is better than the FY 2013 target. Id. at 39.

Second, the Postal Service relies on the VOE survey score, which measures employee engagement. The 

VOE survey provides Postal Service employees the opportunity to provide feedback on various areas of 

job satisfaction. Id. at 42, 63. VOE surveys are administered by a third-party vendor who tabulates the 

results and reports them back to the Postal Service in summary form. Id. at 63. The VOE survey score is 

based on eight VOE survey questions addressing: (1) strategic direction; (2) trust; (3) contribution to 

Postal Service growth; (4) communication; (5) diversity and respect; (6) commitment; (7) personal 

safety; and (8) work effort and quality.65 The Postal Service filed under seal the VOE survey 

questionnaire and summary statistics of the employee responses to each question.66

In FY 2013, the VOE survey score of 64.7 did not meet the FY 2013 target of 64.9.67 The Postal Service 

explains that one reason the target was not met may be the overall decline in morale among federal 

employees.68 It notes, however, that the results compare favorably to recent declines in satisfaction and 

culture indices seen in other federal sector surveys.69 The FY 2014 target is 65.1, which is higher than 

the FY 2013 target. Id. at 39.

 

64 FY 2013 Annual Report to Congress at 39 n.6.

65 Id. at 39 n.7; Postal Service Response to CHIR No. 12, question 7(a).

66 Postal Service Response to CHIR No. 10, questions 5(a) and 5(b).

67 FY 2013 Annual Report to Congress at 39.

68 Postal Service Response to CHIR No. 12, question 7(a).

69 FY 2013 Annual Report to Congress at 42.
Review of FY 2013 Performance Report Performance Goal 4: Workplace Environment

and FY 2014 Performance Plan

28

Comments

The Public Representative asserts that the VOE survey does not focus on employee morale or views 

about management as it affects employees. Rather, he argues that the survey is based primarily on a 

few questions asked of a statistically significant proportion of employees about whether they believe 

the Postal Service is doing a good job. He contends that it is impossible to determine whether the

measure of success showing improvement by two-tenths of a percentage point is anything more than 

within the margin of error.70

Commission Analysis

The Postal Service partially met the Workplace Environment performance goal. In FY 2013, it met the 

OSHA I&I Rate target, but not the VOE survey target. The VOE survey score remained constant at 64.7 in 

FY 2011, FY 2012, and FY 2013, which demonstrates that the Postal Service is neither improving nor 

declining in this area.71 The Postal Service must improve its VOE survey score and maintain its progress 

regarding the OSHA I&I Rate to meet the Workplace Environment performance goal.

The Commission has reviewed the VOE survey and finds that the responses to the questions in the 

survey are an appropriate measurement of employee morale and views about management. The Postal 

Service has the flexibility to determine which questions comprise the VOE survey.

In the FY 2012 ACD, the Commission recommended expanding upon sections of the FY 2013 Report that 

discuss the OSHA I&I Rate.72 The FY 2013 Report and FY 2014 Plan contain some discussion of the OSHA 

I&I Rate. Further information is provided in the FY 2013 Comprehensive Statement and in the Postal 

Service Response to CHIR No. 12, question 3.73

The OSHA I&I Rates in the FY 2013 Report differ from the OSHA I&I Rates reported in previous Annual 

Performance Reports. In the Postal Service’s FY 2010 Report,

74 the OSHA I&I Rate presented showed 

that the Postal Service had met its target. Similarly, in the Postal Service’s FY 2012 Report, the OSHA I&I 

Rate presented showed that it had again met its target. However, in its FY 2013 Report, the Postal 

Service revised its reported OSHA I&I Rates for fiscal years 2010, 2011, and 2012. As shown below in 

Table 9, there is an increase from the originally reported rates. The data presented indicate that in both 

FY 2010 and FY 2012, the Postal Service’s OSHA I&I Rate was actually higher and it therefore would not 

have met either year’s target.

 

70 PR Comments at 15.

71 See FY 2013 Annual Report to Congress at 39.

72 FY 2012 ACD at 42.

73 See FY 2013 Annual Report to Congress at 65.

74 United States Postal Service 2010 Annual Performance Report and 2011 Annual Performance Plan 

(FY 2010 Report).
Review of FY 2013 Performance Report Performance Goal 4: Workplace Environment

and FY 2014 Performance Plan

29

Table 9

Performance Report Differences in OSHA I&I Rate Values for Same Fiscal Years Presented

OSHA I&I Rate Data Year Presented in Performance Report

FY 2010 FY 2011 FY 2012

Performance Report Target

Reported 

“Actual” 

I&I Rate

Target

Reported 

“Actual” 

I&I Rate

Target

Reported 

“Actual”

I&I Rate

FY 2010 Performance

Report

5.52 5.49 5.39 N/A N/A N/A

FY 2011 Performance

Report

5.52 5.49 5.39 5.67 5.57* N/A

FY 2012 Performance

Report

5.52 5.49 5.39 5.67 5.72* 5.44

FY 2013 Performance

Report**

5.52 5.76 5.39 6.03 5.72 5.78

Source: FY 2010 Report at 2; FY 2011 Annual Report to Congress at 33;

75 FY 2012 Annual Report to Congress at 

34; FY 2013 Annual Report to Congress at 39.

*The FY 2011 Annual Report to Congress listed the ‘FY 2012 Plan’ OSHA I&I Rate target as 5.57. The FY 2012 

Annual Report to Congress listed the ‘FY 2012 Plan’ OSHA I&I Rate target as 5.72.

**The FY 2012 Annual Report to Congress listed the ‘FY 2013 Plan’ target as ‘1% below SPLY’. However, the 

‘FY 2013 Plan’ target shown in the FY 2013 Annual Report to Congress was the same as the FY 2012 target 

(5.72).

N/A—Not applicable.

The FY 2010 Report included a note that may explain the differences in reported ‘Actual’ OSHA I&I 

Rates. The differences may be due to “data continually being updated as medical information is 

received and new accident reports are accepted by the Department of Labor, some [of] which may have 

occurred in a prior time period. ‘Actual’ rates shown are a snapshot of the values on a specific day....”

76

This explanation seems plausible. However, because FY 2010, FY 2011, and FY 2012 OSHA I&I Rates 

were revised in the FY 2013 Report, there may also have been a change in methodology.

Given what appear to be possible delays in the Postal Service’s updates to its OSHA I&I Rate information 

and/or methodological differences from year to year, the Commission suggests the Postal Service 

consider adding the Department of Labor’s Total Case Rate as a performance indicator to assess its 

progress towards the Workplace Environment performance goal. The Total Case Rate is a measure 

related to the total number of cases reported to the Office of Workers’ Compensation Programs

(OWCP). This is a standard measure tracked for all federal agencies by the United States Department of 

 

75 United States Postal Service 2011 Annual Report to Congress (FY 2011 Annual Report to Congress).

76 FY 2010 Report at 2 n.2.
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Labor and does not change.77 Further, if the Postal Service makes methodological changes to the 

collection or process related to its existing performance indicators, the Commission urges the Postal 

Service to include and explain this type of data-related/performance-measurement information in 

future Annual Performance Reports. As part of the Postal Service’s Annual Performance Plan, it must

describe the means to be used to verify and validate measured values. See 39 U.S.C. § 2803(a)(6). 

Although the Postal Service’s OSHA I&I Rate target appears to have been met in FY 2013, the increasing 

number of total cases reported to the OWCP between FY 2012 and FY 2013, as shown below in Table 10,

raises concerns about the Postal Service’s progress in meeting its Workplace Environment performance 

goal.

Table 10

OSHA Federal Injury and Illness Statistics

Postal Service Employees* Total FY Cases** Total Case 

Rate**

FY 2013 587,713 38,847 6.61

FY 2012 607,814 38,206 6.29

Source:https://www.osha.gov/dep/fap/statistics/fedprgms_stats12_final.html,https://www.osha.gov/dep/fap/statistics/fedprgms_stats13_final.html

* The United States Office of Personnel Management provided OSHA with the most recent available data on the average number of 

employees from December through March for FY 2012 and FY 2013.

** The Total Case numbers are derived from claims submitted to the OWCP with “case create” dates of October 1 through 

September 30 (less denied cases) for each fiscal year. The Total Case Rate is the total cases divided by the number of employees, 

multiplied by 100 for a rate per 100 employees. The difference between the OSHA I&I Rate of 5.61 per 100 employees reported in 

the FY 2013 Report, and the Department of Labor’s Federal Injury and Illness Statistics for FY 2012 and FY 2013 shown in Table 10, is 

due to the different formulas that were used to calculate the two measures. Postal Service Response to CHIR No. 12, question 3.

 

77 There have been several presidential initiatives directing federal agencies to establish goals and track 

performance in four major areas. One of these is to reduce the number of total cases reported to the OWCP. See

http://www.dol.gov/owcp/dfec/power/ and http://www.dol.gov/owcp/dfec/share/.
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STRATEGIC INITIATIVES

In FY 2010, the Postal Service created strategic initiatives in response to the Commission's request that 

Annual Performance Reports and Plans adhere more closely to the requirements of 39 U.S.C. §§ 2803 

and 2804. The strategic initiatives were designed to help clarify the connection between performance 

goals and the actions necessary to achieve them.78

The strategic initiatives have changed from FY 2010 to FY 2012. In FY 2012, there were twenty-three

strategic initiatives designed to close the gap between revenue and cost over the next five years.79 The 

Postal Service also developed cross-portfolio performance indicators to measure the performance of the 

strategic initiatives. Id. at 44.

In FY 2013, the Postal Service focuses on a portfolio of different, but comparable, strategic initiatives 

that the Postal Service is striving to implement to meet its performance and financial goals.80 The Postal 

Service explains that the FY 2013 strategic initiatives differ from the FY 2012 strategic initiatives because 

“[t]he portfolio of initiatives is dynamic and changes as priorities and resources require, and as programs 

are completed or adjusted based on external events.” Id. In addition, the Postal Service asserts that: 

“Many of these initiatives contribute to achieving multiple goals. For example, improving the customer 

experience is also very important for revenue generation and improving the financial position of the 

Postal Service.”81 Table 11 presents a crosswalk linking the FY 2012 strategic initiatives and the 

corresponding FY 2013 strategic initiatives.

Despite wording differences between the FY 2012 and FY 2013 strategic initiatives, the Commission 

agrees that the initiatives are similar.

 

78 FY 2011 ACD at 49.

79 FY 2012 ACD at 43. In FY 2012, the Postal Service referred to the strategic initiatives as “strategic 

change initiatives.” “Strategic initiatives” and “strategic change initiatives” appear to have the same meaning.

80 FY 2013 Annual Report to Congress at 66.

81 Id. Although the Postal Service provided an example, a crosswalk delineating the initiatives to multiple 

performance goals is not included in the FY 2013 Report.
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Table 11

Crosswalk Linking FY 2012 Strategic Initiatives with FY 2013 Strategic Initiatives

FY 2012 Strategic Initiatives FY 2013 Strategic Initiatives

Mail processing and transportation Optimize network operations

Delivery Optimize delivery operations

Retail access Transform access

Facilities management and disposal; sustainability Optimize facility footprint

N/A in FY 2012; new to initiatives in FY 2013 Build a world-class package platform

Customer experience Improve customer experience

Commercial mail acceptance transformation Streamline commercial mail acceptance and 

enterprise payment

Financial and information systems Achieve 6 Sigma IT System reliability

Product visibility Achieve 100 percent product visibility

Shipping growth; marketing mail growth; digital 

and hybrid mail growth

Build funnel and launch innovation; grow small 

business revenue

Transaction mail preservation; marketing mail 

growth

Market new and existing products and services

Increasing sales force effectiveness Acquire, grow and retain customers

Pricing optimization Integrate costing and pricing for profitable growth

Digital and hybrid mail growth Establish the digital platform

Financial and information systems Obtain Payment Card Industry (PCI) compliance;

Achieve 100 percent customer and revenue 

visibility

N/A in FY 2012; new to initiatives in FY 2013 Enhance enterprise risk management capabilities

Employee engagement; workforce optimization Analyze workforce needs and manage the change

Total labor cost Develop labor agreements to build future 

workforce

Workforce optimization Improve employee availability

Dispute resolution Resolve disputes effectively

Total labor cost Establish Postal Service health care plan

Total management and development Leadership identification and development

Source: Postal Service Response to CHIR No. 15, question 7.

82

 

82 Docket No. ACR2013, Responses of the United States Postal Service to Questions 2-4 and 7 of 

Chairman’s Information Request No. 15, March 24, 2014 (Postal Service Response to CHIR No. 15, questions 2-4 

and 7).
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In FY 2013, the Postal Service focused on twenty-four strategic initiatives. The Postal Service links each 

strategic initiative to a performance goal as well as establishes strategies for achieving that goal. For the 

strategic initiatives, the Postal Service states that “progress is tracked through a detailed reporting 

system and is reviewed every two weeks by the Executive Leadership Team for the Postal Service.”83 

The strategic initiatives respond to the economic and competitive environment currently facing the

Postal Service. Id. Table 12 lists the FY 2013 strategic initiatives and how they relate to the Postal 

Service’s four performance goals.84

 

83 FY 2013 Annual Report to Congress at 66.

84 Table 12 was created from the Postal Service FY 2013 strategic initiatives chart. FY 2013 Annual Report 

to Congress at 67.
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Table 12

FY 2013 Strategic Initiatives Linked to Performance Goals

Performance Goal Strategies FY 13 Initiatives

Service Optimize cost of operations and 

infrastructure to match future demands

 Optimize Network Operations

 Optimize Delivery Operations

 Transform Access

 Optimize Facility Footprint

 Build a World-Class Package Platform

Customer 

Experience

Improve customer experience 

measurement processes

Leverage technology to drive business

value

 Improve customer experience

 Streamline commercial mail acceptance and 

enterprise payment

 Achieve 6 sigma IT system reliability

 Achieve 100 percent product visibility

Financial Results Grow revenue from innovation, core 

products and markets

Establish the digital platform

Strengthen financial and risk 

management capabilities

 Build funnel and launch innovation

 Grow small business revenue

 Market new and existing products and 

services

 Acquire, grow, and retain customers

 Integrate costing and pricing for profitable 

growth

 Establish the digital platform

 Obtain Payment Card Industry (PCI) 

compliance

 Achieve 100% customer and revenue 

visibility

 Enhance enterprise risk management 

capabilities

Workplace 

Environment

Build competitive workforce of the

future

 Analyze workforce needs and manage the 

change

 Develop labor agreements to build future 

workforce

 Improve employee availability

 Resolve disputes effectively

 Establish Postal Service health care plan

 Leadership identification and development

Source: Id.
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Commission Analysis

In the past, the Commission has stated that the Postal Service should illustrate the relationships 

between the strategic initiatives and performance goals, provide the performance indicators used to

measure progress in meeting targets, and describe the purpose of each strategic initiative.85 This 

information is necessary for the Commission to evaluate progress for each strategic initiative. In 

FY 2012, the Postal Service developed ten cross-portfolio performance indicators to measure the 

performance of its strategic initiatives.86 Each performance indicator included targets and results for 

FY 2012, as well as the FY 2012 variance. When requested, the Postal Service provided this same 

information for FY 2013, as well as the FY 2014 targets, for eight of the ten cross-portfolio performance 

indicators.87

The FY 2012 and FY 2013 strategic initiative (cross-portfolio) performance indicator results and FY 2014 

targets are shown in Table 13.

 

85 FY 2011 ACD at 58.

86 FY 2012 Annual Report to Congress at 39.

87 For the two other FY 2012 cross-portfolio performance indicators not included in Table 13, legislative 

impact was not tracked in FY 2013 and overall customer experience score is included in the goals and performance 

indicators results in Table 2. (See Table 2.) The Postal Service confirmed that the FY 2012 “overall customer 

experience score” was calculated using the same methodology as the FY 2013 CEM score. Postal Service Response 

to CHIR No. 10, question 3(b); FY 2012 Annual Report to Congress at 39.
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Table 13

Strategic Initiative (Cross-Portfolio) Performance Indicators

Indicator

FY 2014

PLANNED

FY 2013

PLANNED

FY 2013

ACTUAL

FY 2013

VARIANCE

FY 2012

PLANNED

FY 2012

ACTUAL

FY 2012

VARIANCE

Total revenue ($) $5,400,000,000 $4,200,000,000 $5,069,494,234 $869,494,234 $935,718,028 $813,556,920 ($122,162,108)

Total cost

savings ($) $1,530,252,539 $1,032,963,951 $872,106,981 ($160,856,970) $581,000,000 $346,338,000 ($234,662,000)

Total workhours

reduced (hours)

24,000,000 12,688,354 9,805,603 (2,882,751) 6,000,000 1,940,200 (4,059,800)

Total head count 

reduced (FTEs)

67,000 43,000 36,535 (6,465) 67,080 29,390 (37,690)

Total facility 

square feet 

reduced

(sq. ft.)

2,200,000 1,200,000 3,030,797 1,830,797 2,200,000 3,308,811 1,108,811

Commercial Mail 

in Full Service 

(%)

97.0% 60.0% 64.0% 4.0% 48% 45% (3%)

IMb adoption 

rate (%) 97.0% 95.0% 95.1% 0.1% 80% 81% 1%

Package 

Scanning Rate 

(%)

96.5% 98.0% 95.1% (2.9%) 94% 94% 0%

Source: Postal Service Response to CHIR No. 10, question 6; Postal Service Response to CHIR No. 15, question 5; Docket No. ACR2012, Library 

Reference USPS-FY12-17; FY 2012 Annual Report to Congress at 39.
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The Commission suggests that for performance goals not completely achieved, the Postal Service may 

want to use specific strategic initiative performance measures from its internal management program 

activity performance measurement system to identify which strategic initiative performance was below 

program activity target goals.

88

The Postal Service’s Annual Performance Report could be made more useful by providing comparable 

program activity performance measures. 39 U.S.C. § 2804(c) states, in part, that: “all subsequent 

reports shall include actual results for the three preceding fiscal years.” When the Postal Service 

presents non-comparable performance measurements in its Annual Performance Report, the ability to 

determine performance progress over time substantially diminishes.

Strategic initiative performance measures would also benefit from consistency year to year. For the 

three fiscal years shown in Table 14, most of the strategic initiative performance measures are not 

comparable.89 The Commission understands that “[this] portfolio of initiatives is dynamic and changes 

as priorities and resources require....”

90

 However, it would facilitate review if substantively similar FY 

2013 strategic initiatives performance measures carried over into FY 2014. Others could be added 

based on the Postal Service’s current priorities for that year.

 

88 Delivering Results, Innovation, Value, and Efficiency (DRIVE). The DRIVE process is a management 

system that incorporates performance measurement. See FY 2013 Annual Report to Congress at 66 and USPS OIG 

Report, Delivering Results, Innovation, Value, and Efficiency Management Audit Report, Report Number DP-AR-13-

008, June 19, 2013.

89 The Commission stated in prior ACDs that Annual Performance Reports and Plans should provide 

explanations for any changes or deletions. See, e.g., FY 2012 ACD at 46.

90 FY 2013 Annual Report to Congress at 66.
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Table 14

Selected Strategic Initiative Performance Measures—FY 2011-FY 2013

FY 2011 FY 2012* FY 2013*

Comparable

Across 3-Year 

Period

IMb - % of workshared mail with 

IMb

IMb adoption rate (%) IMb adoption rate (%) Yes

Optimize Network - Reduce total 

interior facility space

Total facility square feet 

reduced (sq. ft.)

Total facility square feet 

reduced (sq. ft.) Yes

FSS - % of flat mail in Delivery 

Point Sequence

Total revenue ($) Total revenue ($) No

Expand Access – Expand share of 

retail revenue not from Post 

Office

Total cost savings ($) Total cost savings ($)

No

Flexible Workforce – Below 

Financial Plan average workhour 

rate

Total workhours 

reduced (hours)

Total workhours 

reduced (hours) No

Reduce Energy Use –Multiple 

Energy Reduction Goals

Total headcount 

reduced (FTEs)

Total headcount 

reduced (FTEs) No

Reduce Delivery Fixed Costs –

Average number of deliveries 

per route

Commercial Mail in Full 

Service (%)

Commercial Mail in Full 

Service (%) No

Expand Products, Services, 

Features – Create new products, 

services, and features

Package Scanning Rate 

(%)

Package Scanning Rate 

(%) No

Source: FY 2011 Annual Report to Congress at 30; FY 2012 Annual Report to Congress at 39; Postal Service 

Response to CHIR No. 15, question 5.

*In FY 2012 and FY 2013, the Postal Service referred to these as ‘cross-portfolio’ performance indicators.
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COMPLIANCE WITH FILING REQUIREMENTS

This section discusses the completeness of the Postal Service filing and whether it complies with 

applicable statutory and regulatory filing requirements.

The Public Representative submitted comments related to the filing requirements and the Postal Service 

submitted reply comments. The Commission’s analysis in this section will serve as guidance for the 

Postal Service to apply in future Annual Performance Plans and Reports.

Comments

The Public Representative filed comments claiming that “[program] activities cannot be related back to 

the four performance goals, nor can they be specifically identified as strategic initiatives even though 

they appear to be related to the various performance goals” and that “it is difficult or impossible to 

measure and compare performance against the plan generally.”91 He also believes the Postal Service 

has not complied with specific Commission recommendations for improvements and that the strategic 

initiatives are inadequate measures of performance. He asserts that the discussions included in the FY 

2013 Comprehensive Statement fail to include measures of success or future targets. Id. at 3.

The Public Representative contends that the strategic initiatives were revised significantly and deletions 

to these and the Corporate Responsibility goal were not explained. Id. at 8. He states that the twentyfour strategic initiatives provided in the FY 2013 Comprehensive Statement are assigned to each of the 

four performance goals, but otherwise appear to bear no, or very limited, relationship to strategic

initiatives from prior years. He further asserts that the Postal Service has not linked this year’s initiatives

to FY 2012 initiatives nor has it explained any deletions. Id. at 17. In addition, the Public Representative 

states that the Postal Service did not provide reasons why both the customer experience and the VOE

targets were not met. Id. at 9.

The Postal Service filed reply comments in response to the Public Representative’s comments.92 

According to the Postal Service, the Public Representative comments “indicate a serious over-reading of 

the scope and purpose of 39 U.S.C. § 3653(d)” and that “[t]he statute specifically provides that the 

Commission shall evaluate whether the Postal Service has met the goals established under sections 2803 

and 2804[,]” and “[s]ection 3653(d) also stipulates that the Commission may provide recommendations 

related to the protection or promotion of public policy objectives set out in title 39.” Id. at 2.

The Postal Service claims that the performance goals provided in the FY 2014 Plan and FY 2013 Report 

cover the Postal Service’s program activities and provide the required metrics. Id. at 4. The Postal 

Service explains that the strategic initiatives presented in the FY 2013 Comprehensive Statement are 

part of a broader strategic plan designed to assist the Postal Service in achieving its overall goals, rather 

than as part of the Annual Performance Plan and Report. Therefore, it explains that the strategic 

initiatives are presented and discussed in the FY 2013 Comprehensive Statement rather than as part of 

the Annual Performance Plan and Report. Id. at 4-5.

 

91 PR Comments at 6.

92 Postal Service Reply Comments, supra n.6.
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The Postal Service states the Public Representative’s concerns are misplaced because they relate to 

portions of the FY 2013 Comprehensive Statement that are not subject to the same statutory 

requirements as the FY 2014 Plan and FY 2013 Report. Id. at 3. The Postal Service asserts that it

designed the FY 2013 Comprehensive Statement to meet the relevant statutory requirements. As a 

result, the Postal Service contends that portions of the FY 2013 Comprehensive Statement are more 

narrative and descriptive in order to assist a broader stakeholder audience in evaluating the 

performance of the Postal Service. Id. at 4.

Commission Analysis

FY 2014 Plan

The Commission finds that the FY 2014 Plan meets most of the applicable statutory and regulatory filing 

requirements. The FY 2014 Plan establishes four performance goals that are “objective, quantifiable, 

and measurable.”93 The Postal Service provides performance indicators for each program activity to 

measure progress towards meeting its performance goals. 94 However, as noted by the Public 

Representative, “most of the relevant information on program activities is not within the Plan and 

Report, but is within the Comprehensive Report.”95 The Commission finds that evaluating future Annual

Performance Plans would be facilitated if the information was provided in the Annual Performance Plan 

itself rather than throughout the Comprehensive Statement. If information on program activities is 

included in the Comprehensive Statement, the Annual Performance Plan should identify where the 

specific and relevant items can be found in the Comprehensive Statement.

As in previous years, the FY 2014 Plan does not cover each program activity set forth in the Postal 

Service budget.96 In future Annual Performance Plans, the Postal Service should provide performance 

indicators for each program activity in its budget.

In its FY 2014 Plan, the Postal Service briefly describes the operational processes, skills and technology, 

and the resources, including human capital, required to meet the performance goals.97 For each 

performance goal, the FY 2014 Plan includes a description of the objective measurement systems used 

to verify and validate measured values.98 The FY 2014 Plan also includes a basis for generally comparing 

results with the established performance goals.99 However, the performance indicators the Postal 

Service provided were not specific to each program activity. In future Annual Performance Plans, the 

 

93 See 39 U.S.C §§ 2803(a)(1) and (2).

94 See id. § 2803(a)(4).

95 PR Comments at 6.

96 See 39 U.S.C. § 2803(a). Program activity means “a specific activity related to the mission of the Postal 

Service[.]” Id. § 2801(5).

97 See id. § 2803(a)(3).

98 See id. § 2803(a)(6).

99 See id. § 2803(a)(5).
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Postal Service should provide a description of how each performance indicator measures each program 

activity’s performance.

FY 2013 Report

The FY 2013 Report satisfies the applicable statutory and regulatory filing requirements for each 

performance goal. Section 2804 requires that in those cases where performance goals were either 

partially met or not achieved, the Postal Service must explain why it did not meet the performance goal 

and describe plans and schedules for achieving the performance goal.100 Similarly, in the FY 2012 ACD, 

the Commission stated that “[i]n cases where a performance goal has not been met, Annual 

Performance Reports should explain why the goal was not met and what action the Postal Service 

recommends for achieving the performance goal in future years.”101

The FY 2013 Report includes “actual results for the three preceding fiscal years” as required by 39 U.S.C. 

§ 2803(c). However, it would facilitate year-to-year comparisons if the FY 2014 Report and future 

Annual Performance Reports provided targets for previous fiscal years as well.

The Postal Service explained in the FY 2013 Report why the Customer Experience performance goal was 

not met, and why the Service and Financial Results performance goals were partially met.102 However, 

as pointed out by the Public Representative, the Postal Service’s FY 2013 Report did not initially provide 

reasons why the Workplace Environment goal was only partially met. Specifically, the Postal Service did 

not explain why the VOE performance indicator target was not met.103 At the Commission’s request, the 

Postal Service identified why the VOE target was missed and a list of actions it was taking to improve the 

workplace environment.104 In the future, this information should be included as part of the Postal 

Service’s initial filings.

 

100 39 U.S.C. § 2804(d)(3).

101 FY 2012 ACD at 37.

102 FY 2013 Annual Report to Congress at 40, 42.

103 See PR Comments at 9-10.

104 Postal Service Response to CHIR No. 10, question 5. The VOE survey questionnaire was provided as 

part of the Preface in Docket No. ACR2013, Library Reference USPS-FY13-NP39.
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Strategic Initiatives

The Postal Service’s strategic initiatives facilitate the Commission’s review of the performance goals 

under 39 U.S.C. § 3653(d). They were originally established to link the performance goals to the actions 

necessary to achieve them.105 The Commission previously found that strategic initiatives are part of the 

Annual Performance Report and Plan.106 As a result, the Commission reviews the strategic initiatives as 

part of its evaluation of whether the Postal Service met the performance goals established in the Annual 

Performance Report and Plan.107

In the FY 2012 ACD, the Commission directed that the FY 2013 Report and FY 2014 Plan contain FY 2013 

targets, FY 2013 results, and FY 2014 targets for each strategic initiative cross-portfolio performance 

indicator.108 In FY 2013, the Postal Service did not initially provide this information as part of its filings as 

requested by the Commission, but rather provided this information in response to an information 

request.109 To ensure compliance with applicable filing requirements, this information should be part of 

the Annual Performance Report and Plan. The FY 2014 Report and FY 2015 Plan should also include 

information relating to the strategic initiative cross-portfolio performance indicators. A description and 

crosswalk linking the strategic initiatives and cross-portfolio performance indicators should be included.

In addition, the lack of clarity between the strategic initiatives and their relationship to the strategic 

initiative (cross-portfolio) performance indicators inhibits the review process. In future filings, the Postal 

Service should provide a clear way to distinguish the two.

 

105 FY 2012 ACD at 45 (citing FY 2011 ACD at 49).

106 FY 2012 ACD at 45.

107 Id. (citing FY 2011 ACD at 58).

108 FY 2012 ACD at 46.

109 Results were provided in Postal Service Response to CHIR No. 10, question 6. FY 2014 targets were 

provided in Postal Service Response to CHIR No. 15, question 5.