United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on the Postal Service, Committee on

Government Reform and Oversight

House of Representatives

October 1997 U.S. POSTAL SERVICE

Little Progress Made in

Addressing Persistent

Labor-Management

Problems

GAO/GGD-98-1

GAO United States

General Accounting Office

Washington, D.C. 20548

General Government Division

B-272446 

October 1, 1997

The Honorable John M. McHugh

Chairman, Subcommittee on the

 Postal Service

Committee on Government Reform

 and Oversight

House of Representatives

Dear Mr. Chairman:

This report responds to your request that we review the Postal Service’s

efforts to improve employee working conditions and the overall

performance of the Service. These efforts, referred to in this report as

initiatives, reflect the Service’s attempts to try to enhance its working

environment. This report provides updated information related to our

September 1994 report1

 in which we described the existence of various

labor-management relations2

 problems in the Postal Service and made

recommendations for addressing such problems and improving the

adversarial nature of postal labor-management relations. Our objectives in

this report were to (1) determine the status and results of the Postal

Service’s efforts in improving various labor-management relations

problems identified in our 1994 report, including how the Service

implemented specific improvement initiatives; and (2) identify approaches

that could help the Service and its four labor unions and three

management associations achieve consensus on how to deal with the

problems we discussed in our 1994 report.

Results in Brief Since our report was issued in September 1994, little progress has been

made in improving the persistent labor-management relations problems

that had, in many instances, resulted from autocratic management styles;

the sometimes adversarial attitudes of employees, unions, and

management; and an inappropriate and inadequate performance

management system. These problems have generally contributed to a

sometimes contentious work environment and lower productivity for the

Postal Service. Also, the number of employee grievances not settled at the

first 2 steps of the grievance process has increased from around 65,000 in

fiscal year 1994 to almost 90,000 in fiscal year 1996. These problems

1

U.S. Postal Service: Labor-Management Problems Persist on the Workroom Floor

(GAO/GGD-94-201A/B, Sept. 29, 1994).

2

“Labor-management relations” as used in this report is a broad term encompassing relations between

postal managers/supervisors and employees as well as the traditional meaning of relations between

management and labor unions.

Page 1 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

continue to plague the Service in part because the parties involved,

including the Service, the four major labor unions, and the three

management associations, cannot agree on common approaches for

addressing the problems. This inability to reach agreement has prevented

the Service and the other seven organizations from implementing our

recommendation to develop a framework agreement that would outline

common objectives and strategies for addressing labor-management

relations problems and improving the postal workroom climate.

Since 1994, the Service and its unions and management associations have

tried to improve the climate of the postal workplace by implementing

specific improvement initiatives, such as programs for selecting and

training new postal supervisors and planning the redesign of mail delivery

routes for city letter carriers. Many postal, union, and management

association officials told us that they believed some of these initiatives

held promise for making a positive difference in the labor-management

climate. However, our review of specific improvement initiatives showed

that although some actions had been taken to implement certain

initiatives, little information was available to measure their results. In

some instances, the initiatives were only recently piloted or implemented,

and some had been discontinued. In other instances, although postal and

union officials agreed that improvements were needed, they disagreed on

approaches for implementing specific initiatives. Generally, these

disagreements have made it difficult for the Service and its unions and

management associations to move forward and work together to ensure

that the initiatives’ intended improvements could be achieved.

Improving labor-management relations at the Postal Service has been, and

continues to be, an enormous challenge and a major concern for the Postal

Service and its unions and management associations. With the significant

future challenges it faces to compete in a fast-moving communications

marketplace, the Service can ill afford to be burdened with long-standing

labor-management relations problems. We believe that in order for any

improvement efforts to achieve their maximum intended benefits, it is

important for the affected parties to agree on common approaches for

addressing labor-management relations problems. During our review, we

identified some approaches that could help the Postal Service and its

unions and management associations reach consensus on strategies for

resolving such problems. Although we recognize that achieving consensus

does not come quickly or easily, we believe that continued disagreements

on approaches for improving the postal working environment without

Page 2 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

some effort to achieve common ground may lead to escalating workplace

difficulties and hamper efforts to achieve desired improvements.

Background The Postal Service is the nation’s largest civilian employer with

approximately 861,000 employees as of the end of fiscal year 1996, most of

whom process and deliver mail and provide postal products and services

to customers, such as selling stamps and shipping parcels. According to

the Service’s database, the total number of postal employees has increased

from about 818,000 employees at the end of fiscal year 1993 to about

861,000 employees at the end of fiscal year 1996, an increase of about

5 percent. As shown in table 1, of the approximately 861,000 postal

employees, 86 percent were career employees and 14 percent were

noncareer employees.3

3

Generally, the Service has defined career employees as persons who have permanent work

appointments and include such employees as clerks, postmasters, mail handlers, and city and rural

letter carriers. Noncareer employees are those persons who have limited-term work appointments and

include such employees as some data conversion operators who work at postal remote encoding

centers and substitutes for rural carriers.

Page 3 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Table 1: Composition of Postal Service

Workforce at the End of Fiscal Year

1996 Employee functions

Total number of

paid employees

Percent of total

workforce

Headquarters and area offices employeesa 11,887 1.4

Postmasters, general managers, and

installation heads 26,403 3.1

Supervisors and managers 35,035 4.1

Professional, administrative, and technical

personnel 10,966 1.3

Clerks and nurses 269,916 31.3

Mail handlers 56,182 6.5

City carriers 233,964 27.2

Special delivery messengers 1,419 .2

Motor vehicle operators 8,175 .9

Rural carriers/full-time 47,738 5.5

Maintenance workers 43,277 5.0

Total career employees 744,962 86.5

Casualsb 22,705 2.6

Transitional employeesc 31,964 3.7

Nonbargaining temporary employees 594 .1

Substitutes for rural carriers 49,730 5.8

Postmaster relief/leave replacements 11,446 1.3

Total noncareer employees 116,439 13.5

Total 861,401 100.0

aThis category includes employees who work in postal headquarters, at area offices in the field,

and at the Service’s training facilities. The work of these employees includes such administrative

functions as training, investigations, personnel matters, accounting, and marketing.

bCasuals are noncareer employees with limited-term appointments who supplement the work of

the career workforce. For example, casuals may be temporarily hired as clerks to perform postal

work during the Christmas season.

cTransitional employees are noncareer, bargaining unit employees used to fill vacated

assignments, such as assignments due to be eliminated as a result of automation. The terms of

appointment for these employees cannot exceed 359 calendar days for each appointment.

Source: Postal Service On-Rolls and Paid Employee Statistics National Summary, Accounting

Period 13, Postal Fiscal Year 1996.

Most postal employees were represented by four labor unions and were

called “bargaining unit” or “craft” employees. As shown in table 2, the four

unions that represented the interests of most bargaining unit employees

included (1) the American Postal Workers Union (APWU), (2) the National

Association of Letter Carriers (NALC), (3) the National Postal Mail Handlers

Page 4 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Union (Mail Handlers), and (4) the National Rural Letter Carriers’

Association (Rural Carriers). The two largest unions are APWU and NALC.

Although union membership is voluntary, approximately 80 percent of

those represented by the four major unions have joined and pay dues.4

Table 2: Organizations Representing

Career Bargaining Employees as of

September 1996 Organizations and employee functionsa

Number of

employeesb Percent

American Postal Workers Union, AFL-CIO, (APWU)

represents clerks, maintenance workers, special delivery

messengers, and motor vehicle operators. 322,599 49

National Association of Letter Carriers, AFL-CIO, (NALC)

represents city letter carriers. 233,964 35

National Postal Mail Handlers Union (Mail Handlers), a

division of the Laborers’ International Union of North

America, AFL-CIO, represents mail handlers. 56,182 9

National Rural Letter Carriers’ Association (Rural Carriers)

represents rural carriers. 47,738 7

Total 660,483 100

aIn addition to the four major labor unions, two other unions represent specific craft employees.

According to a postal official, the 2 unions include the D.C. Nurses Association (188 nurses) and

the Federation of Postal Police Officers (1,432 officers), which together represent less than

1 percent of the Postal Service’s workforce.

bThe number of employees shown is the number of career craft employees represented and not

the number of union members. Also, these 4 unions represented a total of 81,694 noncareer

employees, including transitional employees and substitutes for rural carriers. These employees

are not included in the table.

Source: Postal Service On-Rolls and Paid Employee Statistics National Summary, Accounting

Period 13, Postal Fiscal Year 1996.

Also, within the Postal Service, supervisors, postmasters, and other

managerial nonbargaining personnel are represented by three

management associations, including (1) the National Association of Postal

Supervisors (NAPS), (2) the National Association of Postmasters of the

United States (NAPUS), and (3) the National League of Postmasters (the

League). Unlike craft unions, management associations cannot bargain

with postal management. However, the Postal Service is required under

the Postal Reorganization Act (PRA) of 1970 to consult with and recognize

these associations. NAPS represents all supervisors and lower level

managers, except those at headquarters and area offices, for a total of

4

In response to a comment by the Mail Handlers union, we obtained estimated figures from union

officials on employees who had joined and paid dues to each of the four labor unions. The officials

estimated the following percentages of union members who had paid dues as of September 1996:

81 percent for APWU, 83 percent for Rural Carriers, 85 percent for Mail Handlers, and 92 percent for

NALC.

Page 5 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

about 35,000 employees as of the end of fiscal year 1996. Also, as of the

end of fiscal year 1996, approximately 26,000 postmasters and installation

heads were represented by NAPUS and the League. Since 1970, many

postmasters have belonged to both organizations, which address issues of

interest to all postmasters.

In September 1994, we reported that various labor-management relations

problems persisted on the workroom floor of postal facilities. We found

that such problems were long-standing and had multiple causes that were

related to adversarial employee, management, and union attitudes;

autocratic management styles; and inappropriate and inadequate

performance management systems. In part, these problems were identified

through our analysis of the results of an employee opinion survey

administered by the Service in 1992 and 1993, in which employees

expressed their opinions about its strengths and shortcomings as an

employer.5

 Generally, craft employees believed that managers and

supervisors did not treat employees with respect or dignity and that the

organization was insensitive to individual needs and concerns. The

concerns of supervisors and craft employees who worked in mail

processing plants focused mainly on (1) the insensitive treatment of

employees who were late or absent from work; (2) the lack of employee

participation in decisions affecting their work; and (3) the perception that

some employees were not held accountable for their performance, leading

to perceptions of disparate treatment. Also, managers, supervisors, and

craft employees expressed dissatisfaction with the Service’s performance

management and recognition and reward systems because they generally

believed that (1) performing their jobs well just got them more work,

(2) high levels of performance were not adequately recognized or

rewarded, and (3) poor performance was too often tolerated.

In 1994, we reported that these problems had not been adequately dealt

with, mainly because labor and postal management leadership at the

national and local levels were unable to work together to find solutions.

We also reported that the effects of such problems were multiple and

included poor quality of work life for postal employees and higher mail

processing and delivery costs for the Postal Service.

Furthermore, in our 1994 report, we stated that despite the efforts of the

Service and its major labor unions and management associations, attempts

to improve labor-management relations on the workroom floor had met

5

The survey involved mailing a questionnaire to all postal employees to determine their satisfaction on

12 performance dimensions, such as employee treatment and participation.

Page 6 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

with limited success. We recommended in the report that the Service take

various actions to try to improve employees’ working conditions and its

overall performance. Generally, the recommendations involved some of

the following provisions.

• Improve labor-management cooperation by having the Service, the four

unions, and three management associations develop and sign a long-term

(at least 10 years) framework agreement that would establish the overall

objectives and approaches for demonstrating improvements in the

workplace climate. Also, to help ensure that such an agreement can be

reached in a timely manner, consider arranging for outside assistance to

learn alternative negotiation techniques that could help resolve disputes

outside of binding arbitration.

• Improve the workplace environment by training supervisors to promote

teamwork, recognize and reward good performance, and deal effectively

with poor performers; and by training employees in team participation

efforts that are focused on serving the customer through the continuous

improvement of unit operations.

• Establish employee incentives by recognizing and rewarding employees

and work units on the basis of performance.

• Improve mail processing and delivery operations by testing various

approaches for improving working relations, operations, and service

quality and evaluating the results of such tests.

Objectives, Scope,

and Methodology

The objectives of our review were to (1) determine the status and results

of the Postal Service’s progress in improving various labor-management

relations problems identified in our 1994 report, including how the Service

implemented 10 specific improvement initiatives; and (2) identify any

approaches that could help the Service and its unions and management

associations achieve consensus on how to deal with the problems we

discussed in our 1994 report.

To identify the improvement initiatives mentioned in the first objective, we

reviewed various GAO and postal documents, including our 1994 report, the

unions’ collective bargaining agreements, and documents prepared by the

Service that described the goals and results of specific improvement

initiatives. Using this information, we developed a list of 32 initiatives that

the Service, the 4 labor unions, and 3 management associations had

piloted or implemented to try to improve the postal workplace

environment.

Page 7 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Given time and resource limitations, we determined that detailed

follow-up on all 32 initiatives would be impractical. Thus, starting with the

list of 32 initiatives, we established criteria that we believed could help us

select specific initiatives from the list that warranted additional followup

to determine their status and results. Generally, such criteria were based

on (1) the results of discussions on the 32 initiatives with the Postal

Service and its unions and management associations, and (2) the extent to

which we determined that various initiatives had the potential to address

the recommendations in our 1994 report.

We discussed the list of 32 initiatives with officials who represented the

Service and its unions and management associations to ensure that we had

(1) appropriately identified all the initiatives that should be included on

our list, and (2) described the initiatives as thoroughly and accurately as

possible. The Service and the unions and management associations

generally agreed that our list of 32 initiatives included all known postal

improvement efforts that had been piloted or implemented. Also, these

organizations provided us with additional comments and perspective on

the descriptions of specific initiatives.

We reviewed the recommendations in our 1994 report to determine the

extent to which the 32 initiatives had the potential to address the

recommendations. Using the information about the initiatives that we

obtained from our discussions with the Postal Service, the unions, and the

management associations, we focused our work efforts on 10 of the 32

initiatives that in our judgment appeared to have significant potential to

address some of the Service’s labor-management relations problems that

we identified, such as the difficulties experienced by supervisors and

employees on the workroom floors of various postal facilities.

To determine the status and results of the 10 initiatives, we visited the

national Postal Service headquarters in Washington, D.C., where we

interviewed key postal officials who were responsible for establishing,

implementing, and monitoring various labor-management improvement

initiatives. These officials included the Vice-Presidents responsible for

Labor Relations, Human Resources, and Quality. We also interviewed

program officials in these offices to obtain more detailed information on

the goals and results of specific initiatives.

Furthermore, to obtain information on status and results from officials

involved in implementing the 10 initiatives, we spoke with various postal

field officials in 4 area offices—the Mid-Atlantic, Northeast, Southwest,

Page 8 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

and Western areas. These locations were selected because various

initiatives had recently been piloted or implemented in these areas. Also,

our staff from the Dallas and Denver regional offices were available to visit

these areas and discuss such initiatives in person with responsible postal

officials. At these locations, we interviewed the officials who were most

knowledgeable about labor-management relations activities in the area

offices, including the area vice-presidents, the managers for human

resources, and labor relations specialists. Also, within the four areas, we

interviewed postal officials responsible for (1) processing and delivering

mail, which included the managers of processing and distribution plants

and managers of remote encoding centers (RECs);6

 and (2) providing

services to postal customers, which included district office managers.

These officials were close to the activities performed on the workroom

floor of postal facilities, which is where the labor-management relations

problems that we identified in our 1994 report had become evident.

In addition, to address the first objective, we interviewed various union

and management association representatives, including national leaders

located in the Washington, D.C., area and local representatives in the four

area offices we visited. We interviewed these officials to gain their views

and insights on (1) the reasons for the persistence of various

labor-management relations problems; and (2) the Service’s efforts to

implement the 10 improvement initiatives, some of which were intended to

address such problems. At the national level, we spoke with the presidents

of APWU and NALC as well as the presidents of the Mail Handlers and Rural

Carriers unions. In addition, we interviewed the presidents of NAPS, NAPUS,

and the League. At the local level, we interviewed various union

representatives, including national business agents responsible for union

activities in the states covered by the four area offices, local union

presidents, and shop stewards. We also spoke with local representatives of

the three management associations.

As mentioned in the first objective, to determine the overall extent to

which the Postal Service and its unions and management associations had

progressed in addressing persistent labor-management relations problems,

we obtained information on various events that had occurred since the

issuance of our 1994 report. Specifically, this information included (1) the

results of the most recent contract negotiations between the Service and

each of the four major labor unions; (2) data related to postal employee

grievances; and (3) efforts by the Service and the unions and management

6

Postal remote encoding centers (RECs) are installations responsible for barcoding mail that cannot be

read by the Service’s automated mail processing equipment.

Page 9 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

associations to address the recommendations in our 1994 report, such as

the Postmaster General’s (PMG) invitation to the other seven organizations

to attend a labor-management relations summit meeting and the

implementation of various improvement initiatives, including their status

and results.

To address the second objective, we monitored congressional activities

that occurred since the issuance of our 1994 report, including the annual

oversight hearings on the Postal Service’s operations required by PRA. In

addition, we reviewed pending legislation intended to reform postal laws

that was developed by the Chairman of the Subcommittee on the Postal

Service, House Committee on Government Reform and Oversight, and

introduced in June 1996, and again in January 1997 as H.R. 22. We also

reviewed the sections of the Government Performance and Results Act of

1993 (referred to as the Results Act) related to the Postal Service, as well

as GAO and congressional documents that provided guidance on

implementing the requirements of the Results Act. Finally, to obtain more

information on how the Service was using a third party to serve as a

facilitator in labor-management discussions as was recommended in our

1994 report, we interviewed the Director of the Federal Mediation and

Conciliation Service (FMCS).

We requested comments on a draft of this report from the PMG; the

presidents of the four labor unions (APWU, NALC, Mail Handlers, and Rural

Carriers) and the three management associations (NAPS, NAPUS, and the

League); and the Director of FMCS. Of the nine organizations from which

we requested comments, six provided written comments, including the

Service, the four unions, and one of the three management associations

(the League). These written comments are reprinted in appendixes II

through VII. The remaining three organizations—FMCS, NAPS, and

NAPUS—provided oral comments. The comments are discussed in

appropriate sections throughout the report and at the end of the report.

We conducted our review from June 1996 through May 1997 in accordance

with generally accepted government auditing standards.

Little Progress Has

Been Made in

Improving

Labor-Management

Relations Problems

Since our 1994 report was issued, the Postal Service and its unions and

management associations have made little progress in improving

long-standing labor-management relations problems. These problems have

generally contributed to a sometimes contentious work environment and

lower productivity. Such problems may make it more difficult for these

Page 10 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

organizations to work together to improve the Service’s performance so

that it can remain competitive in a dynamic communications market.

According to Postal Service information, in fiscal years 1995 and 1996, the

Service improved its overall financial performance as well as its mail

delivery services, particularly in the delivery time of overnight First-Class

Mail. For example, in fiscal year 1996, the Service reported a net income of

about $1.6 billion, which was second highest only to its fiscal year 1995 net

income of about $1.8 billion. The Service believed that in large part,

improved control over its expenses, including savings from automation

efficiencies and a restructuring and refinancing of its long-term debt,

contributed to the increased income. In addition, the Service reported that

its national average of on-time delivery of overnight First-Class Mail

reached an all-time high of 89 percent for fiscal year 1996 compared to

86 percent for fiscal year 1995.7

Although the Service had made financial and First-Class Mail delivery

improvements, other data indicated that in some areas, its performance

had not improved. For example, the rate of change in the Service’s overall

productivity, known as total factor productivity (TFP), has decreased in

each of the last 3 fiscal years. TFP includes various performance indicators,

such as usage rates of automated mail processing equipment, the growth

in the overall postal delivery network, the development of postal facilities,

and changes in presorted and prebarcoded mail volumes. Additionally, for

fiscal year 1996, the on-time delivery of 2-day and 3-day mail—at 79 and

80 percent, respectively—did not score as high as overnight delivery. Such

performance has raised a concern among some postal customers that the

Service’s emphasis on overnight delivery is at the expense of 2-day and

3-day mail. Also, although its mail volume continues to grow, the Service is

concerned that customers increasingly are turning to its competitors or

alternative communications methods. In 1996, mail volume increased by

about one-half of the anticipated increase in volume. As discussed in our

1994 report, the Service recognized that it must focus on improving

customer satisfaction to enhance revenue and retain market share. Also,

the Service recognized that in all likelihood, customers will not remain

satisfied in an environment where persistent labor-management relations

problems continue to cause employee dissatisfaction.

7

The Postal Service currently uses a measurement known as the External First-Class Measurement

System (EXFC) as a means of indicating how well it is serving customers. The quarterly EXFC,

administered by Price Waterhouse, measures the delivery time of First-Class Mail from deposit to

delivery (collection box to mail slot).

Page 11 GAO/GGD-98-1 Postal Service Labor-Management Relations
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Our recent work has shown little progress within the last few years on

addressing long-standing labor-management relations problems, and the

sometimes adversarial relationships between postal management and

union leadership at the national and local levels have persisted. These

relationships have generally been characterized by (1) a continued

reliance by three of the four unions on arbitration to settle their contract

negotiation impasses with the Service, (2) a significant rise not only in the

number of grievances that have been appealed to higher levels but also in

the number of grievances awaiting arbitration, and (3) the inability of the

Service and the other seven organizations to convene a labor-management

relations summit to discuss problems and explore solutions. Various

postal, union, and management association officials whom we interviewed

said that the problems persist primarily because the leaders of these

organizations have been unable to agree on common approaches to

solving the problems. As a result, our 1994 recommendation for

establishing a framework agreement of common goals and approaches

that could help cascade positive working principles and values from top

postal, union, and management association officials down throughout the

Service’s approximately 38,000 postal facilities nationwide has yet to be

implemented.

Arbitration Used to Settle

Most Contract

Negotiations

In our 1994 report, we discussed the occurrence of past contract

negotiations, which generally took place at the national level between the

Service and the four labor unions every 3 or 4 years. Since as far back as

1978, interest arbitration8

 has been used to resolve bargaining deadlocks

that occurred during contract negotiations for three of the four unions,

including APWU, NALC, and Mail Handlers. Specifically, interest arbitration

occurred in 1978, 1984, and 1990 with APWU and NALC, and in 1981 with Mail

Handlers.

The most recent negotiations occurred for contracts that expired in

November 1994 for APWU, NALC, and Mail Handlers, during which interest

arbitration was used to settle bargaining deadlocks. In the case of the

Rural Carriers, whose contract expired in November 1995, negotiations

8

The Postal Reorganization Act (PRA) of 1970 provided that labor unions could collectively bargain

with the Postal Service to establish compensation, benefits, and other terms and conditions of

employment for the employees they represent. Unlike employees in the private sector, postal

employees are prohibited from striking. Thus, PRA established procedures for interest arbitration that

are designed to resolve bargaining impasses that may occur during discussions over the terms of a new

contract.

Page 12 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

resulted in the establishment of a new contract without the use of interest

arbitration.9

With APWU, NALC, and the Mail Handlers, the issues that arose in interest

arbitration over their most recent contracts were similar to issues that

have surfaced at previous contract negotiations. The issues focused

primarily on the unions’ push for wage and benefit increases and job

security, in contrast to postal management’s push for cost-cutting and

flexibility in hiring practices. According to a postal official, such

negotiations over old issues that continually resurface have at times been

bitter and damaging to the ongoing relationship between the Service and

union leadership at the national level. Union officials also told us that a

new issue—the contracting out of specific postal functions, also known as

outsourcing—has caused the unions a great deal of concern, because they

believe that it could affect job security for employees.

In his comments on a draft of this report, the president of the Rural

Carriers union stated that for the most recent collective bargaining

agreement, the negotiating team, including postal and union

representatives, held joint training sessions across the country and invited

various state and local postal management and craft representatives to

participate in the training. The Rural Carriers president believed that this

training helped the parties to better negotiate and reach agreement on the

language that was included in the most recent contract, which in this

instance eliminated the need for the use of an outside arbitrator. Also, the

president believed that the training helped provide both union and postal

management officials a more thorough understanding of the contract’s

requirements.

Grievances Continue to

Increase

In our September 1994 report, we discussed the problems associated with

the grievance/arbitration process, which is the primary mechanism for

craft employees to voice work-related concerns. As defined in postal labor

agreements, a “grievance” is “a dispute, difference, disagreement, or

complaint between the parties related to wages, hours, and conditions of

employment.” In our 1994 report, the problems we described included

(1) the high number of grievances being filed and the inability of postal

supervisors or union stewards to resolve them at the lowest organizational

level possible and (2) the large backlog of grievances awaiting arbitration.

9

The rural carriers have had a more cooperative relationship with the Postal Service and generally

have been able to negotiate contracts without arbitration.

Page 13 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

The process for resolving postal employees’ grievances is similar to that

used in many private sector and other public organizations. Generally,

according to labor relations experts, a process that is working effectively

would result in most disputes being resolved quickly at the lowest

organizational level, that is, by the supervisor, employee, and union

steward who represents the employee’s interests. Employees as well as

the four postal unions that represent them can initiate grievances.

Depending on the type of grievance, the process may involve up to 4 or 5

steps, and each step generally requires the involvement of specific postal

and union officials. For instance, at each of the first 3 steps in the process,

the parties that become involved include lower to higher union and postal

management level officials in their respective organizations, such as post

offices, mail processing and distribution centers, and area offices. Step 4 in

the grievance process occurs only if either the Service or the union

believes that an interpretation of the union’s collective bargaining

agreement is needed, in which case, national level postal and union

officials would become involved. The fifth and final step in the grievance

process involves outside binding arbitration by a neutral third party.

Generally, at each step in the process, the involved parties are to explore

and discuss the grievance to obtain a thorough understanding of the facts.

During any of the first 4 steps that occur before arbitration, the grievance

may be settled by the parties. If the grievance is not settled, the Service

makes a decision in favor of either postal management or the employee. If

the Service denies the grievance (i.e., makes a decision in favor of

management), the employee or union steward can elevate the grievance to

the next higher step in the process until the last step, which concludes the

process with a final and binding decision by a neutral arbitrator. Table 3

briefly describes the specific steps of the 5-step process and the key

parties involved. A more detailed description of the grievance/arbitration

process is included in appendix I.

Page 14 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Table 3: Brief Descriptions of Steps

and Key Parties Involved in the

Grievance/Arbitration Process

Step number Brief description of step Key parties involved

1 Oral discussion of grievance

occurs.

Employee or union steward, and

supervisor

2 If grievance was denied at step 1,

a written grievance is filed.

Union steward or representative

and installation head or designee

(e.g., postmaster, plant manager)

3 If grievance was denied at step 2,

a written appeal of the grievance is

filed.

Union area representative and area

office human resources manager or

other designated area-level postal

official

4 Written decision interpreting the

union’s national collective

bargaining agreement is made by

the Service (if either the Service or

union believes that such

interpretation is needed).a

Representatives of national union

and postal headquarters

5 Arbitration of grievance is decided

(final and binding decision).

Neutral arbitrator

aThis step may not occur with every grievance.

Source: U.S. Postal Service: Labor-Management Problems Persist on the Workroom Floor

(GAO/GGD-94-201A/B, Sept. 29, 1994).

In our 1994 report, we highlighted issues associated with the

grievance/arbitration process, including the high number of grievances

that had been filed and the inability of supervisors or installation heads

and union stewards to resolve them at the step 1 and 2 levels. The Postal

Service’s national grievance arbitration database showed that in fiscal year

1994, a total of 65,062 grievances were not settled at the steps 1 and 2

levels and were appealed at the step 3 level, which involved postal

management and union officials at the area office level. According to the

Service, this number increased to 73,012 in fiscal year 1995 and 89,931 in

fiscal year 1996.

As indicated in figure 1, in fiscal year 1996, the average rate of step 3

grievances for every 100 craft employees had risen to 13, compared to

fiscal year 1994, when the average rate was 10 step 3 grievances for every

100 craft employees.

Page 15 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Figure 1: Average Rate of Postal

Service Grievances Appealed to Step 3

Per 100 Craft Employees During Fiscal

Years 1994 Through 1996

1994 1995 1996

0

2

4

6

8

10

12

14

10

11

13

Fiscal years

Cases per 100 employees appealed to step 3

Note: Step 3 grievances are grievances that have been appealed by the unions to the area level

because they could not be resolved at the plant or district levels.

Source: U.S. Postal Service.

Also, figure 2 indicates that according to Service data, increases had

occurred in the number of grievances that were awaiting arbitration by a

third-party arbitrator, also referred to as backlogged grievances.10 Figure 2

shows that the number of backlogged grievances had increased from

36,669 in fiscal year 1994 to 69,555 in fiscal year 1996, an increase of about

90 percent.

10For this report, the term backlog is used to describe only those grievances awaiting arbitration.

Page 16 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Figure 2: Postal Service Grievances

Awaiting Arbitration for Fiscal Years

1994 Through 1996

1994 1995 1996

0

20,000

40,000

60,000

80,000

36,669

48,469

69,555

Number of cases awaiting arbitration

Fiscal years

Note: These figures include backlogged grievances for which no arbitration decision had been

made by the end of the fiscal year.

Source: U.S. Postal Service.

Figure 3 shows that in fiscal year 1996, the average rate of grievances

awaiting arbitration had risen to 10 grievances per 100 craft employees, an

increase from the average rate of 6 grievances per 100 craft employees in

fiscal year 1994.

Page 17 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Figure 3: Average Rate of Postal

Service Grievances Awaiting

Arbitration Per 100 Craft Employees

for Fiscal Years 1994 Through 1996

1994 1995 1996

0

2

4

6

8

10

12

14

6

7

10

Cases per 100 employees awaiting arbitration

Fiscal years

Note: These figures include backlogged grievances for which no arbitration decision had been

made by the end of the fiscal year.

Source: U.S. Postal Service.

Generally, the postal management and union officials we interviewed said

that the total volume of grievances was too high. However, the views of

postal and union officials differed on the causes of this high grievance

volume. These officials told us that their views had not changed

significantly since we issued our 1994 report. Generally, the officials

tended to blame each other for the high volume of grievances being filed

and the large number of backlogged grievances awaiting arbitration.

In 1994, we reported that from postal management’s perspective,

grievances have always been high because union stewards flooded the

system with frivolous grievances to demonstrate that they were executing

their responsibility to represent employees’ interests. Also, a postal official

told us that he attributed the high grievance rate to what he termed an

overall “entitlement mentality” on the part of craft employees who

believed that they were entitled to file grievances.

Page 18 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

In contrast, union officials told us that postal management was largely

responsible for the huge volume of backlogged grievances. One union

official told us that the key problem was not in the filing of grievances by

employees but in the inability of lower level postal officials to settle

disputes, especially at steps 1 and 2. This situation has often resulted in

many grievances being escalated to a higher decisionmaking level and has

added to the delays in obtaining such decisions. Also, an APWU official

explained that postal management is generally reluctant to settle

grievances awaiting arbitration because the backlog benefits postal

management. The official told us that postal management can continue to

violate the APWU labor agreement with impunity as long as grievances sit in

the backlog awaiting an arbitration decision. In his comments, the

president of the Rural Carriers union stated that he strongly encourages

union members to file only meritorious grievances.

Summit Meeting on

Labor-Management

Relations Has Not Yet

Occurred

The Postal Service and its unions and management associations have been

unsuccessful in their attempts to convene a labor-management relations

summit that was proposed by the PMG over 2 years ago. In November 1994,

the Subcommittee on Federal Services, Post Office, and Civil Service of

the Senate Committee on Governmental Affairs held a hearing on

labor-management relations in the Postal Service that in large part focused

on the information in our September 1994 report. Various witnesses

testified at the hearing, including the PMG and the national leaders of APWU,

Mail Handlers, Rural Carriers, and NAPS. The PMG extended an invitation to

the leaders of the four unions and three management associations to join

Service officials in a labor-management relations summit at which postal,

union, and management association leaders could explore our

recommendations for improving the workroom climate and determine

appropriate actions to be taken.

The responses from the other seven organizations to the PMG’s invitation

were mixed. For instance, around January 1995, the leaders of the three

management associations and the Rural Carriers union accepted the

invitation. However, the union leaders for APWU, NALC, and Mail Handlers

did not. They said they were waiting until the contract negotiations were

completed before making a decision on the summit. At the time the

invitation was extended, the contracts for these three unions had recently

expired, and contract negotiations had begun. After all negotiations were

completed for the three unions in April 1996, they agreed to participate in

the summit.

Page 19 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Given the difficulties initially encountered by the Service in trying to

convene a summit, in February 1996, the Postal Service requested the

Director of the Federal Mediation and Conciliation Service (FMCS) to assist

the Service by providing mediation services in helping to set up the

summit meeting. Also, in March 1996, the Chairman of the Subcommittee

on Postal Service, House Committee on Government Reform and

Oversight, encouraged the FMCS Director to assist the Postal Service by

providing such services.

According to a postal official, in September and December 1996, the FMCS

Director facilitated two presummit meetings that involved representatives

from the Service, APWU, and NALC. In January 1997, another meeting was

held that involved only the Service, APWU, and NALC officials. Although

postal and union officials declined to reveal the specific issues that were

discussed at the presummits, they told us that such issues as

performance-based compensation, outsourcing of specific postal

functions, and grievance resolution will continue to be major concerns.

Also, in March 1997, the Director of FMCS told us that another presummit is

currently being scheduled to provide the other five affected parties an

opportunity to discuss similar issues with the Service. However, as of

May 1997 when we completed our review, no summit involving all eight of

the parties had taken place, nor was one scheduled.

In his comments on a draft of this report, the Director of FMCS provided us

updated information on the presummit and summit meetings. APWU, NALC,

Rural Carriers, and the League also provided us their comments on the

presummit and summit meetings. The Director of FMCS told us that in

addition to the presummit meetings held in September and December 1996

with the Service, APWU, and NALC, another presummit meeting was held in

June 1997, which was attended by officials from FMCS, the Service, the Mail

Handlers and the Rural Carriers unions, NAPS, NAPUS, and the League. The

purpose of the presummit was similar to the purpose of the presummit

meetings previously held with APWU and NALC, which was to (1) discuss

information on labor-management relations problems that was obtained

by an outside contractor through interviews with various postal, union,

and management association officials; and (2) determine the next steps in

attempting to organize a summit meeting that would involve the Service,

the four major labor unions, and the three management associations.

Generally, the Director believed that the presummit meeting went well and

that the stage is now set for what he envisions will be a summit meeting

that should provide the eight organizations with a forum for openly

Page 20 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

discussing the status of labor-management relations and the steps that can

be taken to help resolve problems. He also told us that discussions are

currently being held with the eight organizations on proposed dates for the

summit meeting.

The president of APWU told us that the prospects of a summit meeting

being convened were not improved when the Service unexpectedly

announced its decision to contract out some Priority Mail transportation

and processing services to Emery Worldwide Airlines.11 According to the

president of APWU, after one of the presummit meetings, the PMG pledged

full communication concerning the Service’s business plans. However,

APWU stated that it was not consulted about this decision before it was

finalized, and its representatives were disappointed because they believed

that the Service did not solicit their views on the merits of such a decision.

The president of NALC said that although a summit meeting has not yet

been convened, GAO should not use this fact as an indicator of the extent to

which labor-management relations problems exist. NALC commented that

one of the reasons the summit meeting has not yet occurred was because

the timing of the PMG’s suggestion for a summit in November 1994 was not

appropriate, given that sensitive and difficult collective bargaining

negotiations were about to begin. NALC also stated that some presummit

meetings have already been held, which could achieve some positive

results.

In its comments, the Rural Carriers union pointed out that it was the first

organization to accept the PMG’s invitation soon after it was first proposed.

Like NALC, the League also commented that the PMG’s attempts to convene

a summit with all the employee organizations were thwarted by contract

negotiations, and since 1994, a summit with the participation of all four

unions and three management associations simultaneously has failed to

happen.

Status and Results of

Initiatives to Improve

Labor-Management

Relations

Since our 1994 report was issued, the Postal Service and the other seven

organizations have continued in their efforts to address long-standing

labor-management problems by taking actions to implement specific

improvement initiatives, such as the program for selecting and training

new postal supervisors, known as the Associate Supervisor Program (ASP).

Although many postal, union, and management association officials we

spoke with believed that some of these initiatives held promise for making

11The Service recently entered into a $1.7 billion contract with Emery Worldwide Airlines to provide

transportation services, including trucking and airline services, to help move the Service’s Priority

Mail, which the Service attempts to deliver within 2 to 3 days.

Page 21 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

a positive difference in the labor-management relations climate, little

information was available to measure the results of various initiatives.

For the 10 initiatives that we selected for follow-up, table 4 includes brief

descriptions of the initiatives, identifies the organizations who participated

in the implementation of the initiatives, and indicates the

recommendations in our 1994 report to which each initiative is related.

Table 4: List of 10 Selected Initiatives, Their Major Participants, and Related 1994 GAO Recommendations

Initiative Brief description Actual/potential participants GAO recommendation(s)

Associate Supervisor Program

(ASP)

A 16-week training program that

was established in 1994 and

was designed to prepare

candidates to assume postal

supervisory positions.

—Postal Service

—APWU, NALC,a Mail

Handlers, and Rural Carriers

—NAPS, NAPUS, and the

League

Provide for the selection and

training of postal supervisors.

New performance-based

compensation system for

executives, managers, and

supervisors

A revised compensation and

bonus system established in

1995 that was intended to

provide postal executives,

managers, some supervisors,

and some postmasters with pay

increases and bonuses that

more closely aligned each

individual’s performance with

the performance of his or her

work unit and the overall

performance of the Service.

—Postal Service

—NAPS, NAPUS, and the

League

Provide a system of incentives

for recognizing and rewarding

employees based on corporate

and unit performance.

CustomerPerfect!sm A process begun by the Service

in 1995 to establish a

Service-wide system of

continuous improvement for

conducting its business of

processing and delivering mail

and providing postal products

and services to its customers.

—Postal Service

—APWU, NALC, Mail Handlers,

and Rural Carriers

—NAPS, NAPUS, and the

League

—Employees represented by

the D.C. Nurses Association

and the Federation of Postal

Police Officers

—All other postal employees

not represented by unions or

management associations.

Develop common goals and

strategies, and

test approaches at pilot sites for

improving postal operations

and service quality.

Summit meeting The PMG’s invitation, extended

in November 1994, to the

leaders of the four labor unions

and three management

associations to establish a task

force whose purpose would be

to try to address the

labor-management relations

problems discussed in our 1994

report.

—Postal Service

—APWU, NALC, Mail Handlers,

and Rural Carriers

—NAPS, NAPUS, and the

League

Establish a framework

agreement to develop common

goals and strategies.

(continued)

Page 22 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Initiative Brief description Actual/potential participants GAO recommendation(s)

Delivery Redesign A program begun in 1995 that

was designed to establish

appropriate changes to the

system by which city letter

carriers, represented by NALC,

sort and deliver mail, which

would eventually serve as the

basis for compensating these

carriers.

—Postal Service

—NALC

Develop and test approaches

for improving mail delivery by

providing for greater employee

independence in sorting and

delivering mail, greater

incentives for early completion

of work, and a system of

accountability for meeting

delivery schedules.

Labor-management cooperation

memorandum

A 1993 memorandum of

understanding established

between the Service and APWU

to establish principles of mutual

commitment that would serve

as the basis for their increased

cooperation throughout the

Service.

—Postal Service

—APWU

Establish a framework

agreement to develop common

goals and strategies.

Crew chief A pilot program established

between the Service and APWU

through the 1990 collective

bargaining process under

which bargaining employees

would be allowed to assume

leadership roles in work units.

—Postal Service

—APWU

Develop and test approaches

for improving mail processing

operations through the use of

self-managed work units.

Mediation of grievances A process established between

the Service and APWU through

the 1994 collective bargaining

process under which trained

mediators from both

organizations would work

together to try to resolve

employees’ grievances at the

lowest possible level.

—Postal Service

—APWU

Develop and test approaches

for improving working relations

at postal pilot sites.

Employee Involvement (EI) A program established through

contract negotiations with NALC

in 1981 that was intended to

end or alleviate the adversarial

relationship on the workfloor.

—Postal Service

—NALC

Train employees and hold them

accountable for working as

members of work teams,

focusing on serving the

customer, and participating in

efforts to continuously improve

unit operations.

(continued)

Page 23 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Initiative Brief description Actual/potential participants GAO recommendation(s)

Employee opinion survey (EOS) A survey that was first sent out

in 1992 to all bargaining and

non-bargaining employees and

was designed to obtain

employees’ assessments of the

Service’s strengths and

shortcomings as an employer.

—Postal Service

—APWU, NALC, Mail Handlers,

and Rural Carriers

—NAPS, NAPUS, and the

League

—Employees represented by

the D.C. Nurses Association

and the Federation of Postal

Police Officers

—All other postal employees

not represented by unions or

management associations

Obtain employee views on and

participation in improving

workfloor environment.

aIn its comments, NALC stated that we had erroneously listed it as a participant in ASP. As shown

in table 4, for each of the 10 initiatives, we identified the organizations that were participants in or

potential participants in specific initiatives. According to postal officials responsible for

implementing ASP, generally, all craft employees with at least 1 year of work experience in the

Service are eligible to apply for ASP. Thus, our inclusion of NALC as a participant in ASP was

intended to show that NALC employees with a minimum of 1 year of postal work experience can

apply for and, if accepted, participate in ASP.

Source: U.S. Postal Service: Labor-Management Problems Persist on the Workroom Floor

(GAO/GGD-94-201A/B, Sept. 29, 1994) and various postal and union documents that described

specific initiatives.

As shown in table 4, all 10 initiatives required the participation of the

Postal Service. However, the participation of the other seven

organizations—that is, the four major labor unions and the three

management associations—varied depending on the extent to which

employees represented by the unions and the associations were covered

by each initiative. For example, the initiative involving the mediation of

grievances applied only to employees represented by APWU, because this

initiative was established through the 1994 collective bargaining process

that occurred between the Service and APWU. Similarly, the Delivery

Redesign initiative applied only to employees represented by NALC,

because this initiative focused on the work performed by city letter

carriers.

In his comments on a draft of this report, the president of the League of

Postmasters believed that the list of 10 initiatives in our report could be

construed to mean that the League had a stronger presence in the

implementation of the initiatives than was actually the case. The League

mentioned that in most instances, the Service provided the League general

information about the initiatives and a timetable of what was to occur in

their implementation.

Page 24 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

During our discussions with Service, union, and management association

officials on the 10 improvement initiatives, the officials generally agreed

with the overall goals of some of the initiatives. However, the results of

our work indicated that in large part, fundamental disagreements among

the eight organizations on strategies for implementing specific initiatives

continued to hamper their efforts to achieve these goals and improve the

overall working climate for postal employees.

The purpose of some of these initiatives was generally to improve

labor-management relations, thereby enhancing the Service’s performance

in providing postal products and services to its customers. During our

review, we found that various actions had been taken to implement all 10

initiatives that we reviewed. However, we found it difficult to determine

what results, if any, were achieved from 3 of the 10 initiatives primarily

because the initiatives were only recently piloted or implemented. Also,

for 5 of the 10 initiatives, disagreements among the involved participants

on approaches for implementation generally prevented full

implementation of these initiatives and full evaluation of their results. In

addition, although results were available for 2 of the 10 initiatives, these

initiatives were eventually discontinued, primarily because the Service and

the other involved participants disagreed over how best to use the

initiatives to help improve the postal workplace environment.

Actions Have Been Taken

to Implement Three

Initiatives, but It Is Too

Early to Determine Results

For three initiatives, results were difficult to determine, primarily because

they had only been recently piloted or implemented, which made it too

early to fully assess their results. The three initiatives included (1) the

Associate Supervisor Program (ASP); (2) the new performance-based

compensation system for executives, managers, and supervisors; and

(3) CustomerPerfect!

Associate Supervisor

Program

In our 1994 report, we recommended that the Service select and train

supervisors who could serve as facilitator/counselors and who would have

the skills, experience, and interest to treat employees with respect and

dignity, positively motivate employees, recognize and reward them for

good work, promote teamwork, and deal effectively with poor performers.

In an attempt to address this recommendation, the Service established ASP,

a 16-week supervisory training program designed to ensure that

candidates for postal supervisory positions were sufficiently screened and

trained so that after they were placed in supervisory positions, these

supervisors would have a solid foundation that could help them work well

Page 25 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

with employees. A test of ASP was completed in the St. Louis district office

in the fall of 1994, after which the test was expanded to include a total of

10 pilot sites.12 According to a postal official, as of March 1997, about 254

candidates had completed ASP training. Most of these candidates have

already been assigned to supervisory positions in various postal locations.

The Service expects that by the end of fiscal year 1997, 70 of the Service’s

85 postal district offices will have graduated ASP classes or will have

classes ongoing.

During our review, the Service was gathering data from the 10 pilot

locations to evaluate ASP. For example, in March 1997, according to an

official from the Service’s Office of Corporate Development and Training,

that office conducted a 3-day ASP workshop to obtain feedback from the

program participants, including the trainers, coaches, coordinators, and

supervisory candidates who attended ASP training. According to the postal

official, all the participants in the workshop commented that ASP was an

“incredible success.” In addition, the official told us that a San Francisco

post office went from having the worst scores in productivity and the

Service’s External First-Class (EXFC) Measurement System to being one of

the top post offices in the San Francisco district. The official attributed

much of this improvement to the high-quality calibre of the ASP supervisors

who had been assigned to the post office.

As of March 1997, the Service was still completing the last ASP pilot. Upon

completion of the pilot, the Service plans to administer a written survey to

all ASP participants to obtain their comments on the content of the ASP

training course, including such matters as the extent to which they believe

the course met its objectives and whether the ASP instructors were

knowledgeable. Also, the participants are to be asked to assess how they

have been able to transfer their recently learned knowledge and skills to

their current supervisory positions.

In addition, the Service plans to distribute a separate written survey to the

managers of the new ASP supervisors. In this survey, managers are to be

asked to compare the quality of the on-the-job performance of ASP

supervisors to supervisors who had not received ASP training. Also,

managers are to be asked to evaluate ASP supervisors’ communications and

leadership skills as well as their ability to promote and maintain a safe

working environment for employees. Finally, the Service plans to collect

overall performance data, such as EXFC and productivity scores, to

12The 10 sites that participated in the ASP pilot included (1) Dallas, TX; (2) Detroit, MI; (3) Hartford,

CT; (4) Los Angeles, CA; (5) Miami, FL; (6) Philadelphia, PA; (7) Providence, RI; (8) San Francisco, CA;

(9) St. Louis, MO; and (10) Washington, D.C.

Page 26 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

compare a specific postal facility’s performance before receiving ASP

supervisors and after receiving such supervisors to try to determine to

what extent ASP may have affected the performance of the facility.

Various postal, union, and management association officials we

interviewed at some of the ASP pilot locations told us that although they

believed it was too soon to evaluate the results of the program, they

believed it had the potential for providing the Service with more qualified

and better trained supervisors. Also, local union officials we spoke with

said that they liked the additional training that is to be provided to current

postal supervisors under ASP.

13

New Performance-Based

Compensation System for

Executives, Managers, and

Supervisors

In our 1994 report, we discussed past problems with the Service’s

performance-based incentive systems for managers and supervisors. The

problems concerned a system that emphasized providing these employees

with merit pay and promotions for achieving a variety of productivity and

budget goals. Examples of such goals included requiring supervisors to

manage their assigned budgets and control unscheduled employee

absences and overtime usage. However, we found that some supervisors

emphasized “making their numbers” over maintaining good employee

relations.

To help address these problems, we recommended in 1994 that the Service

should provide incentives that would encourage all employees in work

units to share in the tasks necessary for success and that would allow

work units and employees to be recognized and rewarded primarily on the

basis of corporate and unit performance. To address this recommendation,

the Service established a revised compensation system in 1995 for

employees under the Postal and Career Executive Service (PCES). Later, in

1996, the system was expanded to cover the Executive and Administrative

Schedule (EAS), which includes executives, managers, and supervisors.14

The purpose of this system was to establish a performance-based incentive

system of pay increases and bonuses that would appropriately recognize

13According to a postal official responsible for managing ASP, the Service plans to make specific parts

of ASP training available to current postal supervisors, such as conflict resolution and methods for

dealing with problem employees. The purpose of this effort is to provide current postal supervisors

with training that is similar to the training that ASP candidates receive.

14Employees covered by this system basically include (1) postal vice-presidents; (2) managers who

work at Postal Service headquarters in Washington, D.C., and at postal field locations; (3) some

supervisors at postal field locations, including district offices and plants; (4) some postmasters; and

(5) other higher level postal professional, administrative, and technical personnel. This system does

not cover compensation for bargaining unit employees whose pay and benefits are specified in their

unions’ contracts.

Page 27 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

and reward employees for good performance. The amounts of such

increases and bonuses would be based not only on the individual’s

performance rating but also on the performance of the individual’s work

unit, as well as the performance of the Service as an organization.

A key aspect of the revised compensation system is called the Economic

Value Added (EVA) variable pay program, which is a program intended to

provide employees covered by the new compensation system with

bonuses based on specific performance measurements, such as the

financial performance of the Service and levels of customer satisfaction.

Under EVA, in fiscal year 1996, the Service distributed a total of

$169 million in bonuses to a total of about 63,000 postal executives,

managers, supervisors, postmasters, and other higher level nonbargaining

unit employees. Nationally, the average bonus paid to an executive under

PCES amounted to $12,500. Postmasters covered by the new compensation

system and higher level professionals, administrative, and technical

employees each received a bonus that averaged $3,900.15

Another important aspect of the new compensation system was the

inclusion of work unit and corporate measurements in EAS employees’

merit performance evaluations. For fiscal year 1997, these evaluations are

required to include objectives that are aligned with an individual

employee’s work unit goals. The objectives must also align with and

support the Service’s corporate goals. According to postal officials, this

change is intended to (1) enhance EAS employees’ active involvement in

setting objectives to support their work units, (2) establish accountability

for results, and (3) provide monetary acknowledgment of an individual

employee’s contribution to the success of the work unit.

Although the leaders of the three management associations supported the

concept of a performance-based incentive system, two of the three

associations disagreed with the Service on how this system was to be

implemented. Specifically, NAPS agreed to endorse the new pay system.

However, in contrast, officials from NAPUS refused to endorse the new pay

system because they believed “it offered virtually nothing to some of our

members.” Also, in its comments on a draft of this report, the League

stated that it refused to endorse the new pay system because the means by

which the Service implemented EVA precluded most of the Service’s

postmasters, including most of the League’s members, from being eligible

for bonuses.

15Under the new compensation system, the payout percentage figure for postmasters, managers,

supervisors, and higher level professional, administrative, and technical employees included under the

EAS was one-half the amount of the payout percentage figure for postal PCES executives.

Page 28 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

According to NAPUS and League officials, the Service determined that

certain employees who were covered by the requirements of the Fair

Labor Standards Act (FLSA), also known as nonexempt employees,16 should

not be eligible to receive EVA bonuses. NAPUS and League officials

mentioned that the Service’s decision eliminated about 60 percent of the

employees represented by their associations because they were

nonexempt employees. A postal official said that in large part, this

determination was based on the results of a wage comparability study

done recently for the Postal Service in which the wages of postal

employees were compared to wages for employees doing similar work in

the private sector. The official said that the results of the study showed

that nonexempt postal employees were paid from 30 to 60 percent higher

wages compared to employees doing similar work in the private sector.

Also, the official said that nonexempt employees in private sector

organizations with incentive pay programs are generally not eligible to

participate in such programs. Furthermore, the official said that since

nonexempt employees are entitled to receive overtime pay for work they

perform in excess of 40 hours per week, these employees are already

sufficiently compensated for their “extra” work.

NAPUS and League officials also stated that many of the Service’s

nonexempt employees are postmasters who are women and members of

minority groups. Furthermore, the presidents of NAPUS and the League told

us that within recent months, their associations have filed class-action

lawsuits charging that the new compensation system discriminates against

women and minorities. The lawsuits, which were filed in November 1996,

are still pending as of January 1997, according to management association

officials.

In their comments on a draft of this report, three organizations—the Rural

Carriers union, the League, and NAPS—provided us their insights into this

initiative. In his comments, the president of the Rural Carriers union stated

that he supported the concept of EVA but had differences with the Postal

Service in the application of EVA. He mentioned that at the national level,

his union has met to try to determine how the rural carriers’ current

compensation system could be revised so that rural carriers could

participate in EVA. The president further stated that his union was awaiting

an opportunity to participate in EVA, especially since rural carriers’

individual performance goals have always been aligned with their postal

units’ goals, which were established under the Service’s CustomerPerfect!

16Under FLSA, nonexempt employees are required to receive overtime payments for work they

accomplish in excess of 40 hours per week.

Page 29 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

system of management. However, the president said that due to the

enormous resources that the Service has devoted to the implementation of

the Delivery Redesign initiative, it has been unable to provide much

assistance to the Rural Carriers union in developing any type of

performance pay system in addition to the one that the rural carriers

already have. The Rural Carriers president also stated that it is the

individual employee who drives customer satisfaction, creates revenue,

and increases productivity. As such, he believes that the performance of

rural carriers in these areas is already aligned with the concepts of EVA.

As previously mentioned, in his comments, the president of the League

expressed his concern that less than a majority of postmasters were

included under EVA, which caused the League not to support the new pay

system. Also, he commented that (1) nonexempt postmasters who receive

additional pay for working over 40 hours per week should not be excluded

from eligibility for EVA bonuses, because such pay is due these postmasters

for additional work and should not be considered a bonus; and (2) when

trying to support new programs, such as EVA, the Postal Service has often

used the private sector as a basis for comparing the work of postal

employees to employees doing similar work in the private sector.

However, the League president stated that because the Postal Service is

not a private business, the Service should recognize that many postal

positions are unique and cannot be compared to positions in the private

sector. The president of NAPS told us that he believed some postmasters

were overpaid for the work that they did, which included work that

oftentimes was done by craft employees, particularly clerks, such as

sorting mail and providing over-the-counter products and services to

postal customers.

CustomerPerfect! In February 1995, the Service implemented CustomerPerfect!, which has

been described by the Vice President for Quality as a “management system

being constructed and operated by the Postal Service as a vehicle for

constructive change.” He told us that CustomerPerfect! is designed to

assess and, where necessary, improve all aspects of Service operations so

that it can better provide postal products and services to its customers in a

competitive environment.

Postal officials told us that in fiscal year 1995, two CustomerPerfect! pilots

were established in Washington, D.C., and Nashville, TN. Later, in

Page 30 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

February 1996, eight additional pilot sites were added.17 A postal official

mentioned that these pilots consisted primarily of implementing what the

Service called process management, which was described as a systematic

approach to continuously assessing, evaluating, and improving the design

and management of core work processes, including those that facilitate

the processing and delivery of mail products and services to postal

customers. A key aspect of this approach involves the collection and use

of various service and financial performance data, such as EXFC; EVA; and

data on safety in the workplace, including postal vehicle accidents. A

postal official mentioned that the Service plans to expand the process

management aspect of CustomerPerfect! to all 85 postal performance

clusters in fiscal year 1997.18

According to postal officials, CustomerPerfect! was not specifically

designed to address labor-management relations problems. However, they

believe it provides an opportunity for management and craft employees to

work together on problem-solving teams to improve how the Service

accomplishes its overall mission. Postal officials told us that they believed

they had good representation from craft employees on several

problem-solving teams that have been established. They further stated that

all improvement initiatives should be aligned with CustomerPerfect!

According to a postal official, in 1995, the Service offered to provide a

briefing on the goals of CustomerPerfect! to the four unions and the three

management associations. According to a postal official, representatives

from two of the four unions—APWU and Rural Carriers—attended the

briefing. The postal official told us that Mail Handlers and NALC

representatives declined to attend the briefing. Mail Handlers’ officials told

us that they had no interest in the briefing, mainly because the Service had

already made the decision to implement CustomerPerfect! and did not

solicit the union’s input into the development of CustomerPerfect! NALC

officials did not identify a specific reason for not attending the

CustomerPerfect! briefing. However, they told us that the Service

unilaterally terminated the joint Service-NALC improvement initiative called

17The locations of the 10 CustomerPerfect! pilots included the following district offices: (1) the Capital

District, Washington, D.C.; (2) the Central Plains District, Omaha, NE; (3) the Connecticut District,

Hartford, CT; (4) the Greater Indiana District, Indianapolis, IN; (5) the Harrisburg District, Harrisburg,

PA; (6) the Louisiana District, New Orleans, LA; (7) the New York District, New York, NY; (8) the

Sacramento District, Sacramento, CA; (9) the Seattle District, Seattle, WA; and (10) the Tennessee

District, Nashville, TN.

18A performance cluster is an organizational mechanism used by the Service to help track performance

data. For each of the Service’s 85 districts, a cluster usually consists of (1) a district office, which is

responsible for customer service functions mainly through its post offices, stations, and branches; and

(2) a large mail processing and distribution center/facility, which is responsible for processing and

distributing mail mainly through other such centers/facilities, bulk mail centers, and airport mail

centers/facilities.

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Employee Involvement (EI) and is now emphasizing CustomerPerfect!

Representatives from both Mail Handlers and NALC also told us that

CustomerPerfect! was forced on the unions with no attempt by the Service

to solicit their input into the development of CustomerPerfect!

In their comments on a draft of this report, the Rural Carriers union and

the League of Postmasters provided us their insights on CustomerPerfect!

The president of the Rural Carriers union mentioned that he supported

this initiative in concept and that many of his union members have been

involved in CustomerPerfect! process management activities.

Furthermore, he stated that individual performance goals for rural carriers

had always been aligned with a postal unit’s corporate goals under

CustomerPerfect! However, his main concern dealt with how rural carriers

could participate in EVA. The League commented that because Service

goals have been established for each performance cluster, a postal

installation that achieves or exceeds its goals will more than likely not

receive any recognition for such performance if it is included in a cluster

with other installations that have not achieved their goals. According to

the League, this situation is not a good one for providing employees

incentives nor is it good for morale, customer service, or the Postal

Service.

Actions Have Been Taken

to Implement Five

Initiatives, Although

Disagreements Exist Over

Approaches

For five initiatives, the Service and some of the organizations, especially

APWU and NALC, fundamentally disagreed on how specific improvement

initiatives should be implemented. As a result, progress in implementing

these initiatives was difficult to determine. Furthermore, during our

discussions with Service, union, and management association officials on

the five improvement initiatives, the officials generally agreed with the

overall goals of some of the initiatives. However, in large part,

fundamental disagreements among the Service and some of the

organizations on strategies for implementing specific initiatives continued

to hamper their efforts to achieve these goals and improve the overall

working climate for postal employees. The five initiatives included (1) the

labor-management relations summit meeting, (2) Delivery Redesign,

(3) the labor-management cooperation memorandum of understanding,

(4) the mediation of employee grievances, and (5) the crew chief program.

Summit Meeting As discussed earlier in this report, the first initiative—the PMG’s proposed

summit meeting—has not yet taken place, mainly because negotiations on

three of the four unions’ most recent contracts caused these unions to

decline to attend such a summit until the negotiations were completed.

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Negotiations for all four unions were not completed until April 1996. Yet,

as of May 1997 when we completed our review, the PMG’s proposed summit

with all eight organizations had not occurred, nor had it been scheduled.

However, preliminary efforts to convene such a summit have occurred.

They included presummit meetings in November and December 1996 with

APWU and NALC, an additional meeting with APWU and NALC in January 1997,

and plans for presummit meetings with the other remaining five

organizations.

As mentioned previously, we received comments on the summit meeting

from five organizations, including FMCS, APWU, NALC, Rural Carriers, and the

League. A discussion of their comments, which begins on page 20, has

been included at the end of the section of the report entitled “Little

Progress Has Been Made in Improving Labor-Management Relations

Problems.”

Delivery Redesign One of our 1994 recommendations was for the Service and the unions to

jointly identify pilot sites where postal and union officials would be willing

to test revised approaches for improving working relations, operations,

and service quality. Specifically, we recommended that for city letter

carriers, a system should be established that incorporated known positive

attributes of the rural letter carrier system, including greater independence

for employees in sorting and delivering mail, incentives for early

completion of work, and a system of accountability for meeting delivery

schedules. In our 1994 report, we said that problems experienced by city

carriers were often related to (1) the close supervision imposed on city

carriers, which often engendered conflicts between supervisors and

carriers, mainly on the amount of time it took for carriers to do their work;

and (2) the existence of performance standards for city carriers that

tended to discourage carriers from doing their best and completing work

quickly. Postal, union, and management association officials we

interviewed generally agreed that such problems called for a revision of

the city letter carrier system.

As discussed in our 1994 report, both the Service and NALC have studied

the city letter carrier system to determine how best to revise it. For

instance, in 1987, the Service and NALC established a joint task force to

study possible changes and improvements in how carrier assignments

were designed, evaluated, and compensated. The study was to identify and

examine those elements of the rural carrier system that helped avert many

of the conflicts common between postal supervisors and city carriers.

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However, the Service and NALC were unable to reach any agreement on

how to change the city carrier assignments.

Consequently, in March 1994, the Service and NALC established similar but

independent efforts to study possible changes to the city letter carrier

system. A national NALC task force reviewed how city routes could be

restructured to better serve carriers, customers, and the Service. Under

consideration was a suggestion made by the NALC Vice President that NALC

consider a route design similar to that used by rural carriers to better deal

with changes in office functions and procedures that could threaten city

carrier job opportunities. At the same time, the Service had also set up

teams to study and propose alternate approaches to the city carrier

system, including examining the possibility of adopting the rural carrier

approach. However, we found no effort between the Service and NALC to

coordinate and consolidate these two studies for addressing the common

concerns.

According to postal officials, in 1997, after numerous discussions with

NALC and with no ultimate agreement on an approach, the Service decided

to test some revised processes for the delivery of mail by city letter

carriers. These processes are collectively known as Delivery Redesign.

The Service’s plan was to use these revised processes as a basis for

helping to develop a city carrier delivery system that could enhance mail

delivery by (1) reducing friction between supervisors and carriers,

(2) providing increased compensation for superior performance, and

(3) removing existing disincentives for doing the job well.

In addition to the current delivery process, the Service is testing 3 revised

delivery processes at 14 selected sites.19 For example, some sites are to

test the separate case and delivery processes under which some carriers

would do only casing20 while others would do only delivery. Also, one of

the revised processes is to involve the Service’s implementation of

performance standards, also known as standard time allowances, to

structure and monitor city carrier performance at these 14 sites. However,

the Service is not testing any compensation alternatives for these

employees, because it needs agreement from NALC. According to an NALC

official, NALC has not agreed to such alternatives, because it considers

19The locations of the 14 test sites included Baton Rouge, LA; Carson City, NV; Columbus, OH; Enid,

OK; Ft. Myers, FL; Grand Rapids, MI; Houston, TX; Lewistown, ID; Los Angeles, CA; Louisville, KY;

New York, NY; Rochester, MN; St. Augustine, FL; and Syracuse, NY.

20The process of casing involves manually putting the mail into delivery order.

Page 34 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

compensation for city carriers an issue that is most appropriately

discussed in the collective bargaining process.

A postal official told us that the testing of the revised city carrier delivery

processes began in Louisville, KY, in March 1997 and will have started in

the other 13 test sites by May 1997. He also told us that although NALC

officials were briefed several times (May, July, and September 1996) on

Delivery Redesign, they have not endorsed the testing of the revised

processes. At the national level, NALC officials declined to comment on the

testing; they told us that they believe the issue of delivery redesign is a

subject to be decided through the collective bargaining process. However,

the officials added that they do not believe that the city letter carrier

delivery system should be structured similarly to the evaluated route

system used by rural carriers. As we reported in 1994, rural carriers work

in environments substantially different from city carriers. As a result, rural

carriers generally have more independence in doing their work. Also, the

compensation systems for rural and city carriers are different. Rural

carriers are salaried workers who do not have to negotiate daily for

overtime. City carriers are hourly workers whose daily pay can vary

depending on the amount of overtime hours they would be required to

work to process and deliver mail on their assigned routes.

Two organizations—NALC and NAPS—provided us their comments on the

Delivery Redesign initiative. NALC objected to the Service’s implementation

of Delivery Redesign, stating that by implementing this initiative, the

Service has violated the requirements of NALC’s contract agreement

regarding time and work standards for city letter carriers. Also, NALC

mentioned that the Service has repeatedly rejected NALC’s invitations to

study the city letter carrier system in a cooperative manner. In addition,

the president of NAPS told us that he believed that the Delivery Redesign

initiative could help improve the city carrier system partly because one

purpose of this initiative was to collect enough information to allow the

city carrier routes to be evaluated daily instead of annually, which is how

rural carrier routes are currently evaluated.

Joint Labor-Management

Cooperation Memorandum

In November 1993, the Service and APWU signed a joint memorandum of

understanding on labor-management cooperation. The memorandum

included various principles that were intended to help the Service and

APWU (1) establish a relationship built on mutual trust and (2) jointly

explore and resolve issues of mutual interest. An example of one of the

principles involved the parties’ commitment to and support of

labor-management cooperation at all levels throughout the Service to

Page 35 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

ensure a productive labor relations climate, a better employee working

environment, and the continued success of the Service. Another principle

was a statement about the willingness of both parties to jointly pursue

strategies that emphasized improving employee working conditions and

satisfying the customer in terms of both service and cost. The

memorandum did not include any information as to how the Service and

APWU planned to measure the results of its implementation.

The cooperation memorandum was a “quid pro quo”21 for another joint

agreement signed at the same time, known as the Remote Barcoding

System (RBCS) Memorandum of Understanding. Under this agreement, the

Service agreed that it would no longer pursue contracting out for certain

clerical services (i.e., keying address data) associated with the automated

mail processing, or RBCS, functions. Instead, the Service agreed to keep this

work in-house, which would primarily be performed at remote encoding

centers (RECs).

During our visits to various RECs located in the field, most postal officials

and union representatives told us that the cooperation memorandum did

not generally make any significant difference in their ability to work well

together. Rather, they told us that they believed their ability to work

cooperatively was attributable primarily to the differences in the nature of

the work at RECs, which had clean, office-like atmospheres, instead of in

facilities such as plants, which were similar to manufacturing facilities.

Also, employees at RECs perform similar types of work (i.e., data entry

functions); at other types of postal locations, the work involves a wide

range of tasks performed by different employees, including sorting mail,

loading and unloading mail trucks, and serving customers. Also, REC

managers we interviewed told us that because REC employees had not

previously worked in the postal environment, they had no preconceived

notions about labor-management relations.

Both Service officials and APWU leaders agreed that the labor-management

relations memorandum had not accomplished its intent of improving

cooperation between the Service and APWU. They told us that the

memorandum had generally not lived up to their expectations. Postal

officials told us that although they and APWU officials continue to work

together, they do not believe that the “far-reaching anticipated effect” of

the memorandum has been achieved.

21The term “quid pro quo” refers to the exchange between two parties of something for something.

Specifically, one of the parties provides or agrees to provide the other party with a good or a service in

exchange for the other party’s agreement to provide a good or service in return.

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B-272446 

Also, although the president of APWU stated that he considered the

cooperation memorandum to be a “framework agreement” between the

union and the Service, he told us that he believed the Service was not

sincere when it signed the memorandum, because the Service

continuously violates the spirit of the memorandum. He mentioned that a

recent example of this type of violation was that the Service tried to annul

both the cooperation memorandum and the RBCS memorandum in 1995.

However, an interest arbitrator refused the Service’s request for

annulment.

In its comments on a draft of this report, APWU agreed that the

memorandum had not lived up to its expectations. However, the union

stated that cooperation between APWU and the Service exists, as

exemplified by the recent establishment of three additional agreements

with the Service. These agreements, which were signed by the Postal

Service and APWU during the period May through July 1997, were intended

to (1) try to significantly reduce or eliminate grievance backlogs;

(2) establish a National Labor Relations Board alternative dispute

resolution procedure concerning information requests; and (3) provide for

the implementation of an administrative dispute resolution procedure to

help resolve employee complaints about specific issues, such as pay. APWU

included copies of the three agreements as enclosures to its written

comments, all of which are included in appendix III. APWU believed that

any assessment of the status of postal labor-management relations should

include an evaluation of the impact of these agreements, despite the fact

that the agreements had only recently been signed by Service and APWU

officials. Because these agreements were not available during the period

of our review, we could not evaluate their implementation.

Mediation of Grievances As a result of the 1994 contract negotiations, APWU and the Service agreed

to include in the union’s contract a program of mediation in which parties

at local installations could request assistance to help facilitate the

grievance/arbitration process and improve the labor-management

relationship. The purpose of this mediation program was to address the

problem of too many grievances not being settled on the workroom floor.

According to a postal official, the Service initially planned to use the

mediation program on a test basis as a means of reducing the large

backlog of grievances awaiting arbitration. To begin this test, the official

told us that as of October 1996, the Service had trained a total of 113

individuals to serve as mediators who could assist in settling grievances

awaiting arbitration at pilot sites that were to be selected. However, APWU

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B-272446 

officials told us that they disagreed with the Service’s plans to test the use

of mediators in this manner. They believed that a massive arbitration effort

was the best means of reducing the large backlog of grievances awaiting

arbitration. According to APWU officials, whenever a large backlog of

grievances awaiting arbitration occurs, such an effort should involve

sending an arbitrator to that installation to hear all the backlogged

grievances.

Both postal and APWU officials told us that the details of how the mediation

program will be implemented are still under discussion. However, none of

the postal or APWU officials we interviewed provided any information on

when these discussions were scheduled for completion.

In its comments on a draft of this report, APWU stated that after the first

joint agreement on mediation was included in the 1994 contract, the

Service tried to move ahead and implement its own type of mediation

program instead of trying to reach a joint understanding with APWU on how

the program should be implemented. Nevertheless, as previously

mentioned in our discussion on the Joint Labor-Management Cooperation

Memorandum, in May 1997, APWU and the Service established another

agreement that includes provisions for using various types of mediation

processes to help (1) eliminate the current grievance backlog, (2) prevent

future reoccurrences of such backlogs through the improvement of

labor-management relations, and (3) address the root causes that generate

grievances. A copy of this agreement is included in appendix III.

Crew Chief In our 1994 report, we discussed the Service’s testing of the crew chief

program, a program that was designed to allow craft employees to take

greater responsibility for moving the mail. The purpose of this program

was to address craft employees’ concerns that they had only limited

involvement in the daily decisions affecting their work because

management generally did not value their input on how to organize and

accomplish the work.

During 1990 interest arbitration proceedings, APWU proposed the crew

chief concept because it believed the organization of postal work was

outdated and inefficient and created an unnecessarily adversarial and

bureaucratic work environment. The Service was not opposed to the

concept but felt there were too many questions, such as how crew chiefs

would be selected, that needed to be addressed before any agreement

could be considered. As a result of these proceedings, the Service and

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APWU entered into a June 1991 Memorandum of Understanding to pilot test

the crew chief program with clerk craft employees.

Beginning in July 1992, a pilot of the program was conducted in a total of

12 postal locations, including 7 mail processing and distribution plants and

various post offices in 5 postal districts.22 These sites were jointly selected

by the Service and APWU from a list of sites that were willing to participate

in the program. At the pilot sites, crew chiefs were chosen on the basis of

seniority or selected by a joint committee of union and postal employees

and were given 40 hours of on-site training. Each of the sites had the

option of adopting an “unelection” process whereby employees could vote

every 90 days to replace their crew chief. Postal supervisors were

prohibited by the APWU collective bargaining agreement from doing craft

work, but as a craft employee, the crew chief could work with unit

employees. However, unlike supervisors, crew chiefs could not approve

leave for employees or take disciplinary actions against them.

In 1994, we reported that the pilot of the crew chief program was

completed in March 1994. However, according to program participants,

including managers and supervisors as well as crew chiefs whom we

interviewed at specific postal sites, the results of the pilot were mixed. On

the one hand, some program participants told us that they believed craft

employees were generally more comfortable taking instructions from, and

expressing their concerns to, crew chiefs rather than to supervisors.

Participants also told us that crew chief positions alleviated some of the

increased pressure on supervisors that resulted from the Service’s 1992

reduction in supervisory staffing. However, on the other hand, we found

that the crew chief program did not address some important issues that

caused workfloor tensions between supervisors and employees.

Specifically, the crew chief program did not give all employees more

control over their work processes; it empowered only the crew chief. Also,

this program did not provide any new incentives for team performance or

procedures for holding employees and supervisors accountable for poor

performance.

As discussed in our 1994 report, supervisors and crew chiefs often did not

fully understand their respective roles and responsibilities. They said that

the duties that supervisors allowed crew chiefs to perform varied

significantly among the postal pilot sites and also among the work tours at

22The locations of the seven pilot plants included (1) Birmingham, AL; (2) Lehigh Valley, PA;

(3) Louisville, KY; (4) Rochester, NY; (5) Royal Oak, MI; (6) Sacramento, CA; and (7) St. Paul, MN. The

5 pilot district offices included (1) Las Vegas, NV; (2) Louisiana, LA; (3) South Jersey, NJ; (4) Sun

Coast, FL; and (5) Western New York, NY.

Page 39 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

specific sites. Supervisors and crew chiefs also said that selecting the crew

chief on the basis of seniority did not ensure that the best-qualified person

was selected for the position. Some supervisors perceived crew chiefs as a

threat to their job security, so they bypassed them and dealt directly with

employees. Also, NAPS did not support the crew chief program, mainly

because its president considered crew chiefs to be another layer of

management. The existing supervisors at the crew chief test sites were left

in place, and the Service did not redefine their roles in a self-managed

work environment.

In recent interviews, a postal official said that although the Service

believed that crew chiefs in post offices generally had a positive effect on

postal operations, it did not believe that similar positive outcomes were

evident in the plant locations that used crew chiefs. Furthermore, this

official told us that after the completion of the pilot, the topic of crew

chiefs was set aside because of the 1994 contract negotiations with APWU.

He also told us that after the negotiations were completed, discussions

began again on the results of the crew chief pilot. However, according to

postal and APWU officials, they were still evaluating these results as of

February 1997.

Two employee organizations—APWU and NAPS—provided us their

comments on the crew chief program. According to APWU, a study of the

program by an individual at Wayne State University revealed that morale

and job satisfaction had improved at virtually all the sites that used crew

chiefs and that such improvements were more evident at postal

installations that provided retail services than at mail processing

installations. Also, APWU mentioned that the Service still resists the crew

chief program because APWU believes that the Service is intent on retaining

what APWU termed “. . . the same bureaucracy and administrative hierarchy

that has existed since [the 1992] reorganization with all its consequent

ramifications for continued ’contentiousness’.” APWU stated that it

considered the crew chief program to be successful and expressed

considerable concern that the Service still resisted it. Moreover, APWU

commented that we ignored the fact that crew chiefs—also referred to by

APWU as negotiated group leaders—were being successfully used at RECs,

and the overall performance of the RECs has exceeded expectations.

However, our purpose for including RECs in our review was to determine

the extent to which the joint labor-management cooperation memorandum

had been implemented, not to review the overall operations of RECs. Thus,

we did not review the use of crew chiefs or negotiated group leaders at

RECs or the overall performance of RECs.

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The president of NAPS also commented on the crew chief program, stating

that his organization generally did not favor the program, mainly because

it empowered only one person on the mail processing team—the crew

chief, who often functioned as a second supervisor in addition to the

team’s primary supervisor. The president believed that all employees on a

mail processing team should be empowered to work together to do

whatever it takes to process and distribute the mail efficiently and that

only one team supervisor was needed to coordinate mail processing and

distribution activities. By empowering all the team’s employees in this

manner, the NAPS president believed that a crew chief was not needed.

Discontinued Initiatives For two initiatives, efforts to continue implementing them were hampered

primarily by disagreements among the Service and the other involved

participants over how best to use the initiatives to help improve the postal

workplace environment. Also, according to postal officials, a lack of union

participation in one of the two initiatives generally caused the Service to

discontinue its use. The two initiatives included (1) the employee opinion

survey (EOS) and (2) the Employee Involvement (EI) program.

Employee Opinion Survey

(EOS)

The nationwide annual employee opinion survey (EOS), which began in

1992 and continued through 1995, was a voluntary survey that was

designed to gather the opinions of all postal employees on the Postal

Service’s strengths and shortcomings as an employer. Postal officials told

us that such opinions have been useful in helping the Service determine

the extent of labor-management problems throughout the organization and

make efforts to address such problems.

According to postal officials, problems with the EOS arose during

negotiations on some of the 1994 union contracts. Both postal and union

officials stated that during those negotiations, the Service used our 1994

report, which included the results of the 1992 and 1993 EOS, in its

discussion of various contract issues with three unions (APWU, Mail

Handlers, and NALC). In our 1994 report we found that past EOS results have

indicated that many mail processing and distribution employees who had

responded to the survey said that they (1) were generally satisfied with

their pay and benefits, (2) liked the work they did, and (3) were proud to

work for the Postal Service. However, a postal official stated that the

Service’s use of our findings, which were partially based on the EOS results,

caused problems with some union officials. He told us that NALC boycotted

the 1995 EOS because it believed EOS was inappropriately used during the

1994 contract negotiations.

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According to postal officials, NALC and APWU encouraged their members not

to complete future surveys. Also, the officials told us that although the

Mail Handlers and Rural Carriers unions did not urge their members to

boycott future surveys, the resistance by APWU and NALC members was

enough to skew the results of the EOS and render it almost useless. This

action by the unions led to the discontinuance of the EOS in 1996. Also,

officials from a management association told us that they did not believe

the results of employee surveys should be used in determining

management pay levels, because they believed craft employees have

manipulated, and would continue to manipulate, surveys to discredit their

supervisors.

In their comments on a draft of this report, four organizations—APWU,

NALC, Mail Handlers, and the League—provided us their insights on EOS.

Three of the four organizations—APWU, NALC, and Mail Handlers—did not

support the implementation of EOS nor the use of its results. Specifically,

these three organizations objected to what they believed was the Service’s

inappropriate use of EOS results as a basis for justifying its position in

collective bargaining.

APWU stated that it generally does not object to employee surveys and did

not object to EOS until postal officials began using the survey’s results in

the 1994 contract negotiations to justify their bargaining positions, which

in part led to the APWU boycott of the 1995 EOS. NALC stated that although

surveys such as EOS can be useful tools, they can produce (1) data that can

be manipulated, (2) results that can be misinterpreted, and (3) conclusions

that may be inappropriately used. Although NALC stated that it was willing

to work with the Service in developing and implementing an employee

survey, it believed that the Service’s unilateral implementation of EOS and

its inappropriate use of results during contract negotiations undermined

the credibility of EOS.

Also, Mail Handlers stated that during 1994 contract negotiations, the

Service used EOS results to support its position that union members did not

need increased wages and benefits. As a result, in July 1995, the Mail

Handlers union stated that it adopted a resolution, which included its

reasons for objecting to EOS. According to the Mail Handlers union, the

resolution stated that Mail Handlers did not support EOS and requested that

those of its members who chose to complete the 1995 EOS should do so in

a manner that would render it useless. In addition, the League commented

that although the Service implied that EOS was discontinued because of a

lack of union participation, the League understood that it was because

Page 42 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

both the Service and the unions had used EOS data to support their

positions on various issues such as pay and benefits.

Employee Involvement As discussed in our 1994 report, the Employee Involvement (EI) initiative

began in 1982 and was designed to end or alleviate the adversarial

relationship in the workplace climate. Through the implementation of EI,

the Service and NALC intended to (1) redirect postal management away

from the traditional authoritarian practices toward a style that would

encourage employee involvement and (2) enhance the dignity of postal

employees by providing them with a chance for self-fulfillment in their

work.

According to a postal official, EI was discontinued, primarily because it no

longer contributed significantly to the goals of the Service and was unable

to address the root causes of conflict in the workplace or foster the

empowerment of city letter carriers. The postal official told us that when

EI was first established in 1981, it accomplished some positive results in

the workplace. However, in recent years, EI has not helped to improve the

postal workplace as much as it once did. The official told us that a key

reason was that for the past 3 years, all joint EI meetings between Service

and NALC officials were cancelled due to negotiations over NALC’s most

recent contract. The official also told us that during 1994 contract

negotiations, the Service and NALC disagreed over various aspects of EI,

including what type of work the 400 trained EI facilitators should perform.

According to the official, these facilitators were working in various postal

field locations as full-time EI facilitators, which prevented them from

performing functions directly related to mail processing and delivery.

NALC disagreed with the Service’s reasons for discontinuing EI. An NALC

official characterized EI as a remarkable achievement in

labor-management cooperation. He mentioned that EI represented one of

the Service’s and NALC’s earliest efforts to replace the traditional

authoritarian and hierarchical work processes in the postal workplace

climate with a system of increased cooperation and enhanced worker

empowerment. Although the Service decided to discontinue its support of

EI, the NALC official told us that the union intends to continue working to

reinstate the EI program.

In its comments on a draft of this report, NALC reiterated its concern about

the Service’s April 1996 termination of EI, which NALC termed “. . . an

extraordinarily regressive act.” Shortly after EI was terminated, the

president of NALC mentioned that he had written to the Vice President of

Page 43 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

Labor Relations for the Postal Service to protest the action. Also, the NALC

president stated that he believed the timing of EI’s termination, which

coincided with the time that the Delivery Redesign initiative was begun,

indicated that in its approach to dealing with NALC, the Service had moved

from a position of jointness and cooperation to one of domination and

confrontation. The president stated further that he believed the Service’s

revised approach should be an issue of greater concern to us than any of

the initiatives we had selected to review. As noted in the Objectives,

Scope, and Methodology section, we selected the initiatives included in

this review based primarily on (1) discussions with the Postal Service and

its unions and management associations and (2) the extent to which the

initiatives had the potential to address our previous recommendations. EI

was not included in our review.

Continued Need to

Improve

Labor-Management

Relations

Improving labor-management relations at the Postal Service has been and

continues to be an enormous challenge and a major concern for the Postal

Service and its unions and management associations. With the significant

future challenges it faces to compete in a fast-moving communications

marketplace, the Service can ill afford to be burdened with long-standing

labor-management relations problems. We continue to believe that in

order for any improvement efforts to be sustained, it is important for the

Service, the four unions, and the three management associations to agree

on common approaches for addressing labor-management relations

problems so that positive working principles and values can be recognized

and encouraged in postal locations throughout the nation, especially in

locations where labor-management relations are particularly adversarial.

Our work has shown that there is no clear or easy solution to improving

these problems. However, continued adversarial relations could lead to

escalating workplace difficulties and hamper the Service’s efforts to

achieve its intended improvements.

The limited experience the Postal Service and its unions and management

associations have had with FMCS in an attempt to convene a postal summit

meeting, although not fully successful to date, nonetheless has suggested

that the option of using a third-party facilitator to help the parties reach

agreement on common goals and approaches has merit. The use of FMCS,

as recommended in our 1994 report, was requested by the PMG in early

1996 and encouraged by the Chairman of the House Subcommittee on the

Postal Service in March 1996. Although efforts to arrange a summit

continue, the window of opportunity for developing such an agreement

may be short-lived because of contract negotiations involving three of the

Page 44 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

four unions whose bargaining agreements are due to expire in

November 1998.23 As previously mentioned, in 1994, after formal contract

negotiations had begun for APWU, Mail Handlers, and NALC, these unions

were generally reluctant to engage in discussions outside the contract

negotiations until they were completed.

A second approach to improving labor-management relations was

included in the postal reform legislation introduced by the Chairman of the

House Subcommittee on the Postal Service in June 1996 and reintroduced

in January 1997. Under this proposed legislation, a temporary,

presidentially appointed seven-member Postal Employee-Management

Commission would be established. The proposed Commission would be

responsible for evaluating and recommending solutions to the workplace

difficulties confronting the Service and would prepare its first set of

reports within 18 months and terminate after preparing its second and

third sets of reports.24 The Commission would include two members

representing the views of large nonpostal labor organizations; two

members from the management ranks of similarly sized private

corporations; and three members well-known in the field of

employee-management relations, labor mediation, and collective

bargaining, one of whom would not represent the interests of either

employees or management and would serve as the chair. Some concerns

have been raised that the proposed Commission would not include

representatives of the Postal Service or its unions or management

associations, and thus the results of its work may not be acceptable to

some or all of those parties. In July 1996, representatives of each of the

four major unions testified before the House Subcommittee on the Postal

Service that the Commission was not needed to solve labor-management

relations problems at the Postal Service. They said that the affected parties

should be responsible for resolving the problems.

Finally, the Government Performance and Results Act provides an

opportunity for Congress; the Postal Service, its unions, and its

management associations; and other stakeholders with an interest in

postal activities, such as firms that use or support the use of third-class

mail for advertising purposes and firms that sell products by mail order, to

collectively focus on and jointly engage in discussions about the mission

and proposed goals for the Postal Service and the strategies to be used to

23The collective bargaining agreements for APWU, NALC, and Mail Handlers are due to expire in

November 1998. The agreement for Rural Carriers is due to expire in November 1999.

24Under this proposed legislation, the Commission would submit its recommendations in the form of a

written report to the President and Congress to the extent that such recommendations involved any

legislation and to the Postal Service to the extent that the recommendations did not involve legislation.

Page 45 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

achieve desired results. Such discussions can provide Congress and the

other stakeholders with opportunities not only to better understand the

Service’s mission and goals but also to work together to develop and reach

consensus on strategies to be used in attaining such goals, especially those

that relate to the long-standing labor-management relations problems that

challenge the Service.

The Postal Service is currently developing its strategic plan as required by

the Results Act for submission to Congress by September 30, 1997. The

plan is intended to provide a foundation for defining what the Service

seeks to accomplish, identify the strategies the Service will use to achieve

desired results, and provide performance measures to determine how well

it succeeds in reaching result-oriented goals and achieving objectives.

Also, as part of this process, the Results Act requires that the Service

solicit the views of its stakeholders on the development of its strategic

plan and keep Congress advised of the plan’s contents. The Service

published notices in the Federal Register asking the public for input on its

proposed plan no later than June 15, 1997. This comment period provided

an opportunity for those who might be affected by decisions relating to the

future of the Postal Service to voice their views on the strategies to be

used by the Postal Service. Furthermore, the strategic plan is intended to

be part of a dynamic and inclusive process that fosters communication

between the Service and its stakeholders—including the unions and

management associations—and that can help clarify organizational

priorities and unify postal employees in the pursuit of shared goals.

Comments From the

Postal Service, Labor

Unions, Management

Associations, and

FMCS and Our

Evaluation

We provided a draft of our report to nine organizations for their review

and comment. The nine organizations included

• the Postal Service;

• the four labor unions, including APWU, NALC, Mail Handlers, and Rural

Carriers;

• the three management associations, including NAPS, NAPUS, and the League

of Postmasters; and

• FMCS.

We received written comments from the Postal Service, the four major

labor unions, and one of the three management associations—the League

of Postmasters. We also obtained oral comments from the Director of FMCS

and the presidents of NAPS and NAPUS.

Page 46 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

The comments we received from the 9 organizations included diverse

opinions on the 3 sections of the report that dealt with (1) the report’s

basic message that little progress had been made in improving

labor-management relations problems; (2) the implementation of and the

results associated with the 10 improvement initiatives; and (3) the

opportunities that are available to help the Service, the 4 unions, and the 3

management associations reach agreement on how to address

labor-management relations problems. Regarding the report’s basic

message, although the nine organizations generally agreed that little

progress had been made and labor-management relations problems have

persisted, some of them expressed different opinions on the reasons why

such problems continued to exist. With respect to the 10 improvement

initiatives, many of the organizations expressed different opinions about

such matters as how some of the initiatives were implemented, including

what role the organizations played in their implementation, and what

results were associated with specific initiatives. Concerning the

opportunities that could be used to help the Service, the four unions, and

the three management associations agree on how to address persistent

labor-management relations problems, the organizations expressed

various opinions about the potential of these opportunities for helping the

organizations resolve such problems. Also, some of the organizations

believed that entities outside the Postal Service, including Congress,

should not be involved in discussions about postal labor-management

relations problems. Some of these organizations believed that the parties

directly affected by such problems, namely the Service, the four unions,

and the three management associations, should be the ones to decide how

best to address the problems.

We understand that the nine organizations had different perspectives on

these matters. However, we believe that the diversity of their opinions

reinforces the overall message of this report and provides additional

insight as to why little progress in improving persistent labor-management

relations problems has been made since the issuance of our

September 1994 report. We continue to believe that the establishment of a

framework agreement, as recommended in our 1994 report, is needed to

help the Service, the unions, and the management associations agree on

the appropriate goals and approaches for dealing with persistent

labor-management relations problems. Also, we believe that opportunities

such as the ones discussed in this report, including the use of a third-party

facilitator, the proposed labor-management relations commission, and the

requirements of the Government Performance and Results Act, can

provide the Service, the unions, and the management associations

Page 47 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

alternatives to explore in trying to determine how best to reach agreement

on dealing with such problems, so that the Service’s work environment

can be improved and its competitive position in a dynamic

communications marketplace can be maintained.

We incorporated comments where appropriate from all nine organizations,

including the Service, the four unions, the three management associations,

and FMCS, as their comments pertained to the three major sections of the

report in which we discussed our findings. We have included copies of the

written comments we received from the Postal Service, APWU, NALC, Mail

Handlers, Rural Carriers, and the League of Postmasters, along with our

additional comments, as appendixes II through VII, respectively.

Comments Related to the

Report’s Message

In the section of the report entitled “Little Progress Has Been Made in

Improving Labor-Management Relations Problems,” which begins on page

10, we discussed the report’s basic message that these problems, which

were identified in our 1994 report, still persisted. Representatives from the

nine organizations generally agreed that labor-management relations

problems continued to exist in the Postal Service and that little progress

had been made in addressing them. In their written comments, some

organizations discussed in more detail the reasons why they believed such

problems still existed. Among other things, these reasons included

concerns about the Postal Service’s contracting out of some postal

functions, the lack of trust between employees and managers, and the

importance of permitting the Postal Service and its unions and

management associations to operate without interference from outside

parties.

In addition to these written comments, the president of NAPS told us that

he believed the reason for the continued problems was that most

employee organizations were more concerned with trying to preserve their

own existence rather than trying to help ensure the future security of the

Postal Service as an organization. He believed that it was time for the

unions and the management associations to begin educating their

members about the need for these organizations to focus on maintaining

the existence of the Service because, without the Service, the employee

organizations would have no reason to exist.

Comments Related to

Specific Improvement

Initiatives

In the section of the report entitled “Status and Results of Initiatives to

Improve Labor-Management Relations,” which begins on page 21, we

presented information on the efforts that the Service, the 4 labor unions,

Page 48 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

and the 3 management associations have made to implement 10

improvement initiatives. In this section, we included the comments that

we received from some of these organizations, such as APWU, NALC, and

NAPS, which provided us their insights about specific improvement

initiatives, including the crew chief program, the postal employee opinion

survey, and EI. The organizations that commented on specific initiatives

provided information that generally (1) discussed the extent to which they

participated in helping to develop and implement specific initiatives,

(2) described the outcomes that they believed resulted from specific

initiatives, and (3) identified the reasons why they believed specific

initiatives had not achieved their intended outcomes.

Comments Related to

Opportunities for

Improving

Labor-Management

Relations

In the section of the report entitled “Continued Need to Improve

Labor-Management Relations,” which begins on page 44, we discussed

opportunities that are currently available for the Service, the 4 unions, and

the 3 management associations to use in attempting to reach agreement on

strategies for improving labor-management relations problems. The

opportunities we discussed in our report included (1) the continued use of

a third-party facilitator, such as FMCS, to help these eight organizations

agree on common goals and approaches; (2) the establishment of a

presidentially appointed commission of outside experts to evaluate and

recommend solutions to labor-management relations problems; and

(3) the inclusion of the eight organizations, Congress, and other parties

interested in postal activities in a dialogue as part of the Government

Performance and Results Act that can help all postal stakeholders focus

on defining the Service’s mission and goals and the means to achieve such

goals.

Some of the organizations provided us their comments on one or more of

these three issues. Concerning the first issue about the use of a third-party

facilitator to help the eight postal parties reach agreement, we received

comments from five organizations. However, instead of the third-party

facilitator, their comments generally focused more on the PMG’s proposed

summit meeting for which the Director of FMCS has been performing the

facilitator role in attempting to convene the meeting. We received

comments on the meeting from FMCS, APWU, NALC, Rural Carriers, and the

League, all of which provided different perspectives on the anticipated

merits of the proposed summit meeting. The information we obtained

about the meeting is included in the section of the report entitled “Little

Progress Has Been Made in Improving Labor-Management Relations

Problems.” This section includes information on the summit meeting,

Page 49 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

which begins on page 19, and the comments on the meeting that we

received from the five organizations.

The second issue involved the establishment of the seven-member

labor-management relations commission that was included in proposed

legislation by the House Subcommittee on the Postal Service. We received

comments on this issue from the Postal Service and one of the three

management associations—the League of Postmasters.

In its comments, the Service endorsed the proposal by the House

Subcommittee on the Postal Service that a commission be established to

evaluate and recommend solutions to labor-management relations

problems. The Service believed that it would prefer to support the work of

such a commission rather than engage in continued recriminations and

finger-pointing with the unions on why so little progress in addressing

such problems had been made, which has often occurred in the past. The

Service had two suggestions for the Subcommittee’s consideration in the

establishment of the commission. First, the Service suggested that a

shorter time period (i.e., 1 year instead of 3-1/2 years) be established for

the commission to complete its work. The Service stated that 3-1/2 years

was too long a period of time for the commission to evaluate and

recommend solutions to persistent labor-management relations problems,

mainly because a significant amount of work by us and others has already

been done to identify that such problems continue to exist and that this

work should not have to be repeated. Second, the Service suggested that

the commission be established under the auspices of an independent

academic organization to help ensure that (1) the commission’s work

could be started as quickly as possible without having discussions about

its establishment tied to discussions about the postal reform legislation

and (2) the chances that the commission’s recommendations would be

accepted could be increased.

In its comments on a draft of this report, the League mentioned that as

described in the proposed legislation, the proposed commission would not

include representatives of postal employees or customers. The League also

expressed concern about the fact that the members of the commission

would be making decisions about how to resolve labor-management

relations problems without being responsible for ensuring that such

problems were resolved.

Recent discussions we held with the presidents of the four unions and the

remaining two of the three management associations (i.e., NAPS and NAPUS)

Page 50 GAO/GGD-98-1 Postal Service Labor-Management Relations
B-272446 

confirmed that they are also concerned about the composition of the

commission as well as the need for it. Given these opinions, the Service

expressed a concern that without the involvement of an independent body,

implementation of the commission’s recommendations may be difficult to

accomplish.

Concerning the third issue—the opportunity for parties interested in

postal activities to engage in a dialogue as part of Results Act

requirements—only APWU provided comments. According to the president

of APWU, he received a copy of the Postal Service’s draft strategic plan

around June 16, 1997, which he considered rather late. The Results Act

required that the final plan be submitted to Congress no later than

September 30, 1997. Accordingly, the APWU president believed that such

lateness reduced the value of his input on the draft plan and led him to

question whether the Service’s attempt to seek input was sincere.

As arranged with you, unless you publicly announce its contents earlier,

we plan no further distribution of this report until 30 days from its issue

date. At that time, we will send copies of this report to the Ranking

Minority Member of your Subcommittee, the Chairmen and Ranking

Minority Members of the House and Senate oversight committees, the

Postmaster General, and to other interested parties. Copies will also be

made available to others upon request.

If you or your staff have any questions about this report, please contact me

on (202) 512-4232; or Teresa Anderson, Assistant Director, on

(202) 512-7658. Major contributors to this report are included in appendix

VIII.

Sincerely yours,

Bernard L. Ungar

Director, Government Business

 Operations Issues

Page 51 GAO/GGD-98-1 Postal Service Labor-Management Relations
Contents

Letter 1

Appendix I 

Description of

Grievance/Arbitration

Process

56

Appendix II 

Comments From the

Postal Service

58

Appendix III 

Comments From the

American Postal

Workers Union

60

Appendix IV 

Comments From the

National Association

of Letter Carriers

80

Appendix V 

Comments From the

National Postal Mail

Handlers Union

92

Appendix VI 

Comments From the

National Rural Letter

Carriers’ Association

95

Page 52 GAO/GGD-98-1 Postal Service Labor-Management Relations
Contents

Appendix VII 

Comments From the

National League of

Postmasters of the

United States

98

Appendix VIII 

Major Contributors to

This Report

107

Tables Table 1: Composition of Postal Service Workforce at the End of

Fiscal Year 1996

4

Table 2: Organizations Representing Career Bargaining

Employees as of September 1996

5

Table 3: Brief Descriptions of Steps and Key Parties Involved in

the Grievance/Arbitration Process

15

Table 4: List of 10 Selected Initiatives, Their Major Participants,

and Related 1994 GAO Recommendations

22

Figures Figure 1: Average Rate of Postal Service Grievances Appealed to

Step 3 per 100 Craft Employees During Fiscal Years 1994 Through

1996

16

Figure 2: Postal Service Grievances Awaiting Arbitration for

Fiscal Years 1994 Through 1996

17

Figure 3: Average Rate of Postal Service Grievances Awaiting

Arbitration per 100 Craft Employees for Fiscal Years 1994

through 1996

18

Page 53 GAO/GGD-98-1 Postal Service Labor-Management Relations
Contents

Abbreviations

AFL-CIO American Federation of Labor-Congress of Industrial

Organizations

APWU American Postal Workers Union

ASP Associate Supervisor Program

EAS Executive and Administrative Schedule

EI Employee Involvement

EOS Employee Opinion Survey

EVA Economic Value Added

EXFC External First-Class Measurement System

FLSA Fair Labor Standards Act

FMCS Federal Mediation and Conciliation Service

MBP Management by Participation

NALC National Association of Letter Carriers

NAPS National Association of Postal Supervisors

NAPUS National Association of Postmasters of the United States

NLRA National Labor Relations Act

NPMHU National Postal Mail Handlers Union

NRLCA National Rural Letter Carriers’ Association

PCES Postal Career Executive Service

PRA Postal Reorganization Act of 1970

PMG Postmaster General

QWL Quality of Work Life

RBCS Remote Bar Coding System

REC Remote encoding center

TFP Total factor productivity

UMPS Union-Management Pairs

Page 54 GAO/GGD-98-1 Postal Service Labor-Management Relations
Page 55 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix I 

Description of Grievance/Arbitration

Process

As defined in postal labor agreements, a “grievance” is “a dispute,

difference, disagreement, or complaint between the parties related to

wages, hours, and conditions of employment.” The Postal Service’s

process for resolving grievances is similar to that used in the private sector

and other public organizations.

Depending on the type of grievance, the process may involve up to 4 or 5

steps, and each step generally requires the involvement of specific postal

and union officials. For instance, at each of the first 3 steps in the process,

the parties that become involved include lower to higher union and postal

management level officials in their respective organizations, such as post

offices, mail processing and distribution centers, and area offices. Step 4 in

the grievance process occurs only if either the Service or the union

believes that an interpretation of the union’s collective bargaining

agreement is needed, in which case national level postal and union

officials would become involved. The fifth and final step in the grievance

process involves outside binding arbitration by a neutral third party. Both

employees and the four unions that represent them can initiate grievances.

The 5 steps of the process are described below.

Step 1: Oral Grievance • The employee or union steward discusses the grievance with the

supervisor within 14 days of the action giving rise to the grievance.

• The supervisor renders an oral decision within 5 days.

• The union has 10 days to appeal the supervisor’s decision.

Step 2: Written Grievance • The grievance is filed in writing on a standard grievance form with the

installation head or designee.

• The installation head and the union steward or representative meet within

7 days.

• The installation head’s decision is furnished to the union representative

within 10 days.

• The union has 15 days to appeal the installation head’s decision.

Step 3: Written Appeal of

Grievance

• The union files a written appeal with the Area Office’s director of human

resources.

• The union’s Area representative meets with the representative designated

by the Postal Service within 15 days.

• The Postal Service’s step 3 decision is provided to the union representative

within 15 days.

• The union has 21 days to appeal the decision to arbitration (step 5).

Page 56 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix I 

Description of Grievance/Arbitration

Process

Step 4: National Level Review

of Grievances Involving an

Interpretation of the Union’s

National Agreement

• If either party maintains that the grievance involves a matter concerning

the interpretation of the National Agreement, the union has 21 days to

refer the matter to the national level of the union and the Postal Service.

• Representatives of the national union and the postal headquarters meet

within 30 days.

• The Postal Service issues a written decision within 15 days.

• The union has 30 days to appeal the Postal Service’s decision to

arbitration.

Step 5: Arbitration • An arbitrator is selected and a hearing is scheduled under the terms of the

National Agreement, depending on the type of grievance.

• The arbitrator’s decision is final and binding.

Page 57 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix II 

Comments From the Postal Service

See p. 48.

See pp. 49-51.

Page 58 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix II 

Comments From the Postal Service

Page 59 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

See pp. 48-49.

Page 60 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

See comment 2.

Now on p. 11.

Page 61 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

See p. 21.

Page 62 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

See pp. 35-37.

See pp. 37-38.

See pp. 38-41.

Also see comment 3.

Page 63 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

See pp. 41-43.

Page 64 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

See p. 51.

Page 65 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 66 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 67 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 68 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 69 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 70 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 71 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 72 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 73 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 74 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 75 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 76 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

Page 77 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

The following are GAO’s comments on specific issues included in the letter

dated July 21, 1997, from the American Postal Workers Union (APWU).

Other issues that were discussed in the letter have been included in the

report text.

GAO Comments 1. We do not agree with APWU’s assessment that the basic premise of the

report—that labor-management relations problems have generally

contributed to a sometimes contentious work environment and lower

productivity—was misleading. In discussing these issues, we did not

suggest, as APWU stated, that such an environment resulted from some top

down directive from the unions. Rather, as discussed in our 1994 report,

such an environment appeared to have resulted from various problems,

including autocratic management styles, adversarial employee and union

attitudes, and inappropriate and inadequate performance management

systems. We identified these problems mainly through the results of the

1992 and 1993 postal employee opinion surveys and our interviews with

postal, union, and management association officials.

Also, we did not suggest that such problems as the high level of grievance

activity and poor relations between postal craft employees and

supervisors were the result of union propaganda or internal union politics.

Instead, as discussed in our 1994 report, we determined that various data,

including (1) increased grievance rates, (2) repeated uses of arbitration to

settle contract negotiations, and (3) responses to the 1992 and 1993 postal

employee opinion surveys indicated that postal, union, and management

association officials needed to change their relationships and work

together to help improve the Service’s corporate culture, so that the Postal

Service can become more competitive and a better place to work.

2. In its comments, APWU stated that it believed the report’s premise—that

the Service has experienced lower productivity or insufficient productivity

improvements compared to the private sector—was flawed. APWU also

cited various problems with our discussion of TFP in the report and

believed that we had implied that TFP was retarded by labor. In addition,

APWU expressed concern about our characterization that the Service’s

economic performance was causing it to lose market share to its

competitors. Furthermore, APWU included in its comments specific data on

such topics as (1) comparisons of Service and APWU labor productivity to

that of the non-farm labor sector and (2) the Service’s share of the

advertising revenue that has been generated by major communications

participants, such as newspapers, radio, and television.

Page 78 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix III 

Comments From the American Postal

Workers Union

The discussion on TFP in our report was intended to provide additional

information and perspective on the Service’s overall productivity and

performance compared to other performance indicators such as net

income and delivery scores for specific classes of mail. We did not verify

the accuracy of the TFP information that we obtained from the Service nor

did we verify the data that APWU included with its comments related to

such topics as labor productivity and advertising revenue. Also, we did not

suggest as APWU stated that the behavior of TFP was retarded by labor. In

addition, we stated in our report that the Service was concerned about the

fact that customers were increasingly turning to competitors or alternative

communications methods. This information was not our characterization,

as asserted by APWU, but it was information that we obtained from Service

officials.

3. In discussing the crew chief program, APWU commented that we ignored

the fact that negotiated group leaders—employees whose responsibilities

are similar to those of crew chiefs—were being successfully used at RECs,

and the overall performance of the RECs has exceeded expectations. Our

primary purpose for including RECs in our review was to determine the

extent to which the joint APWU-Service labor-management cooperation

memorandum had been implemented, not to review the overall operations

of RECs. Thus, we did not review the use of negotiated group leaders at

RECs or the overall performance of RECs.

Page 79 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

Page 80 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

Now on p. 25.

Now on p. 19.

See pp. 19-21.

See p. 24.

Page 81 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

Now on p. 12.

See p. 35.

Page 82 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

See comment 2.

Now on p. 13.

Page 83 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

See pp. 43-44.

Page 84 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

See pp. 42-43.

Page 85 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

See comment 3.

Page 86 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

See comment 3.

Page 87 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

See pp. 47-48.

Page 88 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

The following are GAO’s comments on specific issues included in the letter

dated July 17, 1997, from the National Association of Letter Carriers

(NALC). Other issues discussed in the letter have been included in the

report text.

GAO Comments 1. We do not agree with NALC’s opinion that our methodology in reviewing

improvement initiatives was fundamentally flawed. The methodology we

used for our 1994 report laid the groundwork for concluding that problems

in labor-management relations persisted on the workroom floor of various

postal facilities. The methodology that supported the work for this review

involved a similar approach, which generally included (1) interviews with

responsible postal, union, and management association officials both in

headquarters and at selected postal field locations and (2) reviews of

relevant documents. As discussed in the section of the report entitled

“Objectives, Scope, and Methodology,” which begins on page 7, this work

was intended to help us determine the extent to which progress in

improving such problems had been made, including whether the results of

specific improvement initiatives had contributed to such progress.

As we mentioned in the methodology section, the 32 initiatives we

originally identified for our review covered a wide range of postal

improvement activities. We recognize that such initiatives offered

opportunities for the Service and NALC, as well as the other three unions

and the three management associations, to try to improve the postal work

environment. However, we determined that because we were faced with a

limited amount of time and resources, we were unable to review all 32

initiatives. We determined that our efforts could best be spent by

reviewing those initiatives that we believed had significant potential to

address the recommendations in the 1994 report, and that, of the 32

initiatives, 10 appeared to fit this criterion. As described in our

methodology, our work included (1) discussions with various

headquarters and field postal officials responsible for implementing and

monitoring the 10 initiatives, (2) discussions with national and field union

and management association representatives who were involved with or

affected by the implementation of the 10 initiatives we reviewed, and

(3) reviews of relevant documents associated with the implementation of

the 10 initiatives. We believe that by using this approach, we were able to

obtain sufficient information that enabled us to determine the overall

extent to which progress had been made in improving various

labor-management relations problems that were identified in our 1994

report.

Page 89 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

2. In its comments, NALC stated that it believed it was inappropriate to

compare the rural letter carrier system to the city carrier system. Thus,

NALC believed that we should not cite the rural carrier system as a model

for the Service and NALC to use in their attempts to revise the city letter

carrier system. As discussed in our 1994 report, both the Service and NALC

agreed that the city letter carrier system had problems and needed to be

changed. We identified various positive attributes of the rural carrier

system, such as greater independence for employees in sorting and

delivering mail, that we believed the Service and NALC could consider in

attempting to revise the city carrier system. However, we did not advocate

that city carriers merely adopt the rural carrier system. Rather, we

recommended that working together, the Service and NALC should test

revised approaches that incorporate known positive attributes of the rural

carrier system to determine how such attributes might be used in the city

carrier system. We continue to believe that the implementation of this

recommendation may help address some of the problems that we found

were associated with the city letter carrier system.

3. In its comments, NALC expressed concern about the fact that we did not

discuss two initiatives in our report. The two initiatives included (1) the

1992 Joint Statement on Violence and Behavior in the Work Place and

(2) the Union-Management Pairs (UMPS) program.

Concerning the joint statement on violence, NALC believed that it was

curious that although this initiative was included in the original list of 32

initiatives, we did not include it in our report. Also, NALC stated that it

believed the statement might have been “. . . an instructive area of inquiry,

since it portrays the best and worst of union-management joint efforts to

address labor-management cultural issues.” According to NALC, the signing

of the statement by the Service and the unions was the best aspect of this

initiative, but the worst part was the Service’s refusal to recognize the

statement as an enforceable agreement against postal supervisors.

As explained previously in comment 1, time and resource limitations

prevented us from reviewing all 32 initiatives. We believed that the 10

initiatives we selected were those that had significant potential for

addressing the recommendations included in our 1994 report. Since we did

not review the joint statement on violence, we cannot comment on NALC’s

statements about this initiative. However, we believe that such a statement

provides the Service, its unions, and management associations an

opportunity to work together to solve problems, which may help these

Page 90 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix IV 

Comments From the National Association of

Letter Carriers

organizations improve cooperation between employees and supervisors

and reduce workfloor tensions.

Concerning the Union-Management Pairs (UMPS) program, NALC stated that

it was a joint, cooperative program, one in which postal management and

union officials worked together to try to resolve disputes between

employees and supervisors without lengthy delays or arbitration. NALC

believed that UMPS was a successful program that helped bring about a

drastic reduction in grievances and arbitrations and that in its 10 years of

existence, it generated a positive labor-management ambiance. Although

NALC stated that it wanted to expand the use of UMPS, the Service has

refused to do so.

Like the joint statement on violence, UMPS had been included in the

original list of 32 initiatives, and, as mentioned previously, time and

resource limitations precluded us from reviewing all 32 initiatives.

However, as discussed in our 1994 report, UMPS provided the Service and

NALC an opportunity to try to jointly resolve disputes between employees

and supervisors before such disputes escalated into formal grievances. We

believe that such an effort can help these organizations improve

communications and reduce conflicts between employees and

supervisors.

Page 91 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix V 

Comments From the National Postal Mail

Handlers Union

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See pp. 47-48.

Now on p. 5.

See comment 1.

Page 92 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix V 

Comments From the National Postal Mail

Handlers Union

Now on p. 42.

See pp. 42-43.

Page 93 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix V 

Comments From the National Postal Mail

Handlers Union

The following is GAO’s comment on a specific issue included in the letter

dated July 22, 1997, from the National Postal Mail Handlers Union (Mail

Handlers). Other issues that were discussed in the letter have been

included in the report text.

GAO Comment 1. In its letter, the Mail Handlers union disagreed with our statement that

about 80 percent of employees represented by the four major postal

unions have joined and paid dues. According to Mail Handlers, this figure

should be higher than 80 percent. Also, Mail Handlers mentioned in its

letter the union security provisions of the National Labor Relations Act

(NLRA) and its desire to see such provisions applied to the Postal Service,

which, if enacted by Congress, would mean that postal employees

represented by a labor organization must join and pay dues to that

organization.

According to PRA, employees have the right, but are not required, to join a

labor organization. The overall percentage figure that we included in the

report on the number of union members was intended to provide a general

perspective on the extent to which those employees represented by unions

were actual members of the union.

We obtained information on the total number of employees represented by

the four labor unions from the Postal Service’s On-Rolls and Paid

Employees Statistics National Summary. Also, we recently contacted

union officials in the four major postal labor unions to obtain estimated

figures on employees who had joined the unions and paid dues. As shown

in the report text on page 5, union officials estimated the following

percentages of union members who had paid dues as of September 1996:

81 percent for APWU, 83 percent for Rural Carriers, 85 percent for Mail

Handlers, and 92 percent for NALC.

We did not verify the accuracy of the data in the Service’s summary nor

did we verify the accuracy of the data provided by the four unions. In

addition, since we did not address the union security provisions of NLRA as

they might apply to the Postal Service, we could not comment on this

issue.

Page 94 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VI 

Comments From the National Rural Letter

Carriers’ Association

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

See pp. 13

and 19.

Page 95 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VI 

Comments From the National Rural Letter

Carriers’ Association

See pp. 29-30

and 32.

See p. 21.

Page 96 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VI 

Comments From the National Rural Letter

Carriers’ Association

The following is GAO’s comment on a specific issue included in the letter

dated June 11, 1997, from the National Rural Letter Carriers” Association

(Rural Carriers). Other issues that were discussed in the letter have been

included in the report text.

GAO Comment 1. In its letter, the Rural Carriers union discussed its continued

involvement in the Quality of Work Life/Employee Involvement (QWL/EI)

initiative. Rural Carriers stated that this initiative has been ongoing since

1982 and QWL/EI participants have addressed various substantive

work-related issues, such as the implementation and monitoring of

automation, new rural carrier training and safety issues. Rural Carriers

also mentioned that no permanent QWL/EI structure exists mainly because

rural carriers who participate are not expected to devote their full time to

QWL/EI activities and also, participants rotate through the QWL/EI program.

The QWL/EI initiative was included in the original list of 32 initiatives that

we had identified at the onset of our review. However, as discussed in the

section of this report entitled “Objectives, Scope, and Methodology,”

which begins on page 7, time and resource limitations precluded us from

reviewing all 32 initiatives. Thus, from the list of 32 initiatives, we selected

10 that we determined had significant potential to address the

recommendations in our 1994 report. Although we did not review the

QWL/EI initiative in this report, as discussed in our September 1994 report,

we found that when local postal management, unions, and employees

were committed to improvement initiatives such as QWL/EI, the results

were often positive and had the potential for helping to (1) develop mutual

trust and cooperation, (2) change management styles, and (3) increase an

awareness that quality of worklife is just as important as the “bottom line.”

Page 97 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

See pp. 47-48.

Page 98 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

Now on p. 19.

See p. 21.

See p. 24.

See comment 2.

See pp. 42-43.

Page 99 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

See comment 3.

Now on p. 28.

Also see comment 4.

See pp. 29-30.

See p. 30.

Page 100 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

See p. 32.

See p. 50.

See comment 5.

Page 101 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

Page 102 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

Page 103 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

Page 104 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

The following are GAO’s comments on specific issues included in the letter

dated July 22, 1997, from the National League of Postmasters of the United

States (the League). Other issues that were discussed in the letter have

been included in the report text.

GAO Comments 1. In its letter, the League commented on a statement we made in the

report, which indicated that since 1970, the distinction between NAPUS and

the League had become blurred and their memberships overlapped (i.e.,

many postmasters belonged to both organizations). According to the

League, this statement was unclear. Thus, we revised the text to indicate

that many postmasters belong to both NAPUS and the League and that both

organizations address issues of interest to all postmasters.

2. In its letter, the League mentioned that it asked the Service to

implement a specific project known as the Special Services

Implementation Task Force. However, the League stated that the Service

did not consult or work with the League during the planning stages of the

project, and the League was consulted only near the end of the project.

Also, the League mentioned that the Service asked the League to

participate in the development of training courses. Although the results

have not yet been determined, the League stated that the results of this

work on training look promising. Since we did not review these initiatives,

we cannot comment on the information that the League provided on them.

3. In its comments, the League mentioned the Management by

Participation (MBP) initiative, which provided the Service and the three

management associations an opportunity to help eliminate authoritarian

management styles. The League indicated that although MBP was viewed as

a worthwhile initiative and helped make various improvements, it was

discontinued during or shortly after the PMG’s 1992 postal reorganization.

At the beginning of our work, MBP was included in the list of 32 initiatives.

However, as discussed in the section entitled “Objectives, Scope, and

Methodology,” which begins on page 7, time and resource limitations

precluded us from reviewing all 32 initiatives. Thus, we focused our efforts

on 10 initiatives that we determined had significant potential for

addressing our 1994 recommendations. Since we did not review MBP in this

report, we cannot comment on the information that the League provided

on MBP. However, in chapter 6 and appendix II of volume II of our 1994

report, we included information on MBP, which was a process for

disseminating participative management concepts to postal supervisors,

Page 105 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VII 

Comments From the National League of

Postmasters of the United States

managers, and postmasters so that a more participative work environment

could be fostered and realistic solutions to business problems could be

developed.

4. In its letter, the League commented on the new compensation system

for managers and supervisors, including the EVA program. The League

stated that our report implied that most postmasters were included in EVA;

but, according to the League, most postmasters were excluded from EVA.

In our report, we stated that League and NAPUS officials told us that based

on the Service’s decision that nonexempt employees should not be eligible

to receive EVA bonuses, about 60 percent of employees represented by

these associations were eliminated because they were nonexempt

employees. We believe that by including this statement in the report, we

had already indicated the League’s concern that a majority of the

employees it represented was excluded from EVA.

The League also commented that it refused to endorse the new pay system

because it excluded most of the Service’s postmasters, including most of

the League’s members. As suggested by the League, we included this

information in the text of the report where the new compensation system

was discussed.

5. In its letter, the League suggested that separate meetings between each

of the seven employee organizations and the Postal Service might help

develop cooperation and trust between the parties. According to the

League, after such meetings had taken place, all eight parties could come

together for what would hopefully prove to be a more productive and

successful meeting. As discussed in this report, in November 1994, the PMG

invited the four labor unions and the three management associations to

meet with the Service in trying to determine, among other things, how best

to implement the recommendations included in our September 1994

report. A key recommendation in our report was the establishment by

these eight parties of a framework agreement to outline overall objectives

and approaches for demonstrating improvements in the workroom climate

of both mail processing and delivery functions. However, we did not

specify the means by which the eight organizations should establish such

an agreement.

Page 106 GAO/GGD-98-1 Postal Service Labor-Management Relations
Appendix VIII 

Major Contributors to This Report

General Government

Division, Washington,

D.C.

Michael E. Motley, Associate Director

Teresa L. Anderson, Assistant Director

James T. Campbell, Assistant Director (Retired)

Anne M. Hilleary, Evaluator-in-Charge

Tammy R. Conquest, Senior Evaluator

Melvin J. Horne, Senior Evaluator

Chau Vu Walters, Senior Evaluator

Arnel P. Cortez, Evaluator

Dallas Regional Office Billy W. Scott, Senior Evaluator

Hugh F. Reynolds, Evaluator

Denver Regional

Office

Robert E. Kigerl, Evaluator

Robert W. Stewart, Evaluator

(240212) Page 107 GAO/GGD-98-1 Postal Service Labor-Management Relations
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