USPS Management Bonuses Draw Wide Criticism

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Members of Congress, postal workers and watchdog groups are angry over the planned payment of productivity incentives to senior managers by the U.S. Postal Service.


In a letter to about 900 top postal executives this month, postmaster general Jack Potter said that if the USPS continues to increase productivity this year, managers' bonuses could amount to one-quarter of their salaries.


Postal message boards were filled this month with negative entries about the incentives. In addition, Citizens Against Government Waste excoriated the USPS' senior executives for "voting themselves bonuses of up to 25 percent of their salaries."


"The postal executives' decision to reward themselves with extra cash in a year of record-breaking losses sums up what's wrong with the post office management," said the group's vice president, Leslie Paige.


"It's really beyond parody," Paige said. "In private-sector business, the shareholders would probably have dismissed the executive who even proposed this idea. The post office's senior staff [is] mostly career civil servants, used to endlessly increasing rates, mediocre innovation, poor long-term productivity rates and a government-protected market share."


An online poll taken by Federal Times found that 89.4 percent of the 1,519 respondents, who mostly are federal workers, were against the payouts while only 10.5 percent were in favor.


The amount of money distributed in incentives is determined using a process called economic value added, or EVA. The size of the incentives -- what the USPS calls its pay-for-performance program -- depends on that positive economic value. The bonuses are calculated based on the amount of mail delivered, the number of new addresses and the number of workers in the mail system.


In 2000, postal performance generated a bonus fund of $208 million, which was distributed among 84,000 executives. That year, the postal service finished with a $199 million deficit.


The agency is expected to lose $1 billion or more this year and seek a substantial rate increase in October.


Meanwhile, Rep. Walter B. Jones, R-NC, introduced in May a resolution to prohibit the USPS from paying the bonuses. The nonbinding resolution, H.R. 144, urges the postal service not to pay 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."


Recent coverage of the EVA program has prompted more members of Congress to co-sponsor the resolution, a spokeswoman for Jones said. A vote on the measure has not been scheduled.


The incentive program, launched in 1996 by then-postmaster general Marvin T. Runyon, is also before the House Government Reform Committee, chaired by Rep. Dan Burton, R-IN, who has yet to schedule a hearing on it.


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