USPS Announces Pay-For-Performance Plans

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Postal officials said that the agency would pay $164.1 million to 84,000 supervisors, managers and postmasters for meeting their performance goals in fiscal 2001 before year's end. The bonuses will average $2,200 per participant.


Last year, the U.S. Postal Service said it paid $197 million in this program.


According to the agency, the USPS has been required to offer its managers these pay-for-performance incentives since 1996 when senior managers negotiated a pay-for-performance package in lieu of annual cost-of-living increases and overtime pay.


The Council for Citizens Against Government Waste, Washington, criticized the announcement, especially since the USPS is expecting a deficit of $1.35 billion for the 2002 fiscal year and just announced a $1.7 billion deficit for the 2001 fiscal year.


"Taking bonuses while [the USPS] is riding a $1.7 billion loss and panhandling for a taxpayer bailout is unconscionable," said CAGW vice president Leslie K. Paige. "This agency was projecting a $1.3 billion financial loss this year even before Sept. 11. Now, postal management is engaged in an aggressive lobbying campaign to obtain a multibillion-dollar bailout from the taxpayers ... You do not give yourself bonuses when your company is in crisis and asking for bailout assistance. A private sector manager who proposed such a scheme would be laughed out of the boardroom."


The USPS, however, continues to defend the program.


"The postal service is not mandated to make a profit, we are a not-for-profit agency. Therefore, it is unreasonable to tie employee incentive programs to whether there is a surplus or a deficit," said Gerry Krienkamp, a USPS spokesman. "Instead, the pay-for-performance program is agreed upon compensation for eligible employees. If the employees meet their goals, they should be compensated for their achievements."


Krienkamp also said calling the pay-for-performance program a bonus program is a misnomer. "The payment has to be earned, and it is based on goals that are defined at the beginning of the year," he said.


Krienkamp also said that "unlike other federal employees, we've given up the general paid increases, the automatic step increases, or the cost-of-living bonus allowances, for example, that they get. If we had been under the old system, we would have paid out $500 million more in salaries than we are paying this year."


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