The future of the U.S. Postal Service’s controversial incentive pay program for senior managers could be decided Monday by its Board of Governors.
Consideration what to do with the program–modify it or possibly eliminate it altogether–is the first item on the agenda for the postal board’s closed-door meeting in Washington.
Postal governors, who could not be reached for comment about the matter, are expected to make their decision known at Tuesday’s public meeting. The agenda for that meeting has not been announced.
With the USPS facing a whopping $1 billion loss this fiscal year, the Economic Value Added Pay for Performance Program has come under fire in recent months from both rank-and-file postal workers and members of Congress.
In view of the impending $1 billion deficit, postal officials–who predict the USPS could lose as much as $3 billion in fiscal 2002–are planning later this year to ask the Postal Rate Commission to endorse another rate hike for sometime next summer of between 10% and 15%.
While angry postal workers have sharply criticized the program on Internet chat rooms and just only a few workers and supervisors have defended it, Rep. Walter B. Jones (R-NC) introduced a non-binding resolution in the House prohibiting the USPS from paying “productivity bonuses” to senior managers “in any year in which the USPS anticipates that it will operate at a deficit or in which a general increase in postal rates has been requested, gone into effect, or is likely to become effective.”
The measure, H.Res.144, is before the House Government Reform Committee chaired by Rep. Dan Burton (R-IN). He has not indicated when, or if, it will be considered by the panel.
The controversy over the program, said Gene A. Del Polito, Association for Postal Commerce president, is just one “of a number of issues that ought to clearly demonstrate to postal governors that the postal service’s compensation programs are broken and should be restructured in the context of postal reform.”
Alliance of Nonprofit Mailers executive director Neal Denton, who also supports a pay incentive program for senior managers, said the USPS should revise the program, adding that “it needs to be fair and reasonable” with payouts “not dependant upon whether the USPS has a surplus or a deficit.”
The program was instituted in 1996 by then Postmaster General Marvin T. Runyon as a way of rewarding senior postal managers who meet or exceed productivity goals financially with a percentage of their annual salaries. Those percentages ranged from a low of 2.5% to a high of 15%.
It has been the center of controversy twice this year, particularly since DIRECT Newsline’s July 13 report of a memo to senior managers from Postmaster General Jack Potter, who took office a month earlier, that the potential incentive pay increase–which critics call bonuses and the USPS does not–could be as much as 25% this year because of increased worker productivity.
Last March Senators Fred Thompson (R-TN) and Jeff Sessions (R-AL) blasted the USPS for paying out some $280 million bonuses to roughly 80,000 postal managers while it was planning to raise postage rates for the second time this year. In January, the USPS raised its rates by an average of 4.6% and then on July 1 it raised them another 1.4%.
Both times postal officials strongly defended the program saying that postal managers earn the money “entirely on performance” and “are not capricious or based on anyone’s evaluation, but entirely on performance.”
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