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. 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 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. 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 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. 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 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. 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. 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, 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); 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.