EAS Pay-For-Performance (PFP)

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• EAS Pay-For-Performance (PFP)

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USPS Pay-For-Performance
Whats Up With The US Postal Service?

• We achieved record levels of service by
  increasing efficiencies, we were able to hit our
  stride, eliminating costs and driving up total
  factor productivity for an unprecedented eighth
  straight year
• -- 2007 Annual Report

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USPS Pay-For-Performance
Whats Up With The US Postal Service?

• A few agencies have pioneered results-oriented
  performance management. The real
  leader is the U.S. Postal Service. The results
  of the Postal Services variable pay plan have
  been dramatic.

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USPS Pay-For-Performance
Presentation Agenda

• What have we achieved?
• PFP overview
• NPA driving success through metrics
• PES driving success through evaluation
• PES Administration
• Compensation strategies

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USPS Pay-For-Performance
Presentation Agenda

• What have we achieved?
• PFP overview
• NPA driving success through metrics
• PES driving success through evaluation
• PES Administration
• Compensation strategies

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WHAT HAVE WE ACHIEVED?
On-Time Delivery of First Class Mail
Overnight Commitment
Start of new pay-for-performance systems
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WHAT HAVE WE ACHIEVED?
On-Time Delivery of First Class Mail
Two-Day Commitment
Start of new pay-for-performance systems
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WHAT HAVE WE ACHIEVED?
On-Time Delivery of First Class Mail
Three-Day Commitment
Start of new pay-for-performance systems
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WHAT HAVE WE ACHIEVED?
Safety Indictors
Start of new pay-for-performance systems
OSHA II
Lost Workday Injuries
Note Methodology for calculating workplace
injuries changed in 2001.
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WHAT HAVE WE ACHIEVED?
Voice of Employee Survey
Positive Response
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WHAT HAVE WE ACHIEVED?
Total Factor Productivity (Cumulative)
Start of pay-for-performance systems
Cumulative Change
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Ask yourself.

• What can I do as a Manager to contribute to the
  organizations success, my units success and my
  employees success?
• Answer Be an informed leader---
• on NPA
• on Performance Evaluation
• on Pay Policies

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USPS Pay-For-Performance
Presentation Agenda

• What have we achieved?
• PFP overview
• NPA driving success through metrics
• PES driving success through evaluation
• PES Administration
• Compensation strategies

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PFP OVERVIEW

• Three systems manage the Pay-For-Performance
  process

National Performance Assessment (NPA)
Performance Evaluation System (PES)
Hum Cap Enterprise System (HCES)
Manages individual objectives (core
requirements) review/approval process
Applies pay rules
Manages corporate and unit indicators
Use information to improve NPA in your location.
No need for employee input.
Use to select core requirements provide
feedback to evaluator.
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PFP Overview
Old Thinking on Design
Target only motivates those close to the target.
One Target and Performance Pay
PAY
Those far below target, have motivation to lower
the bar for the future.
Those far above target, have motivation to lower
the bar for the future.
FINISH LINE
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PFP Overview
New Thinking on Design
BREAKTHROUGH
.
STRETCH
PAY
PLAN
.
HIGH CONTR
EXCEPTIONAL CONTRIBUTOR
NON CONTR
CONTRIBUTOR
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15-Point Evaluation System
PFP OVERVIEW
NC C C HC EC
3 6 9 12 15
2 5 8 11 14
1 4 7 10 13
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Pay Actions
PFP OVERVIEW
NC C C HC EC
3 0 6 3.5 9 6.5 12 9.5 15 12.0
2 0 5 3.0 8 5.75 11 8.75 14 11.0
1 0 4 2.5 7 5.0 10 8.0 13 10.25

• Paid as salary increase up to grade maximum
  balance as lump sum.

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USPS Pay-For-Performance
Presentation Agenda

• What have we achieved?
• PFP overview
• NPA driving success through metrics
• PES driving success through evaluation
• PES Administration
• Compensation strategies

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NPA Success Through Metrics
Basic Assumptions

• Starting point is extensive balanced scorecard of
  metrics (NPA)
• NPA metrics must be objective, measurable
  independently verifiable
• Program must drive continuous improvement
  year-to-year
• Success is linked from corporate to unit to
  individual objectives

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NPA Success Through Metrics
Goal Alignment Line-of-Sight
100
Corporate/District
50
Corporate Indicators
75
80
100
Unit / Individual
50
25
20
0
Postmasters/ Supervisors
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NPA Success Through Metrics
PFP Model
Area/Field PCES/EAS
HQ PCES/EAS
EAS PM
Corporate and Unit Indicators (NPA)
70 - 90
80
100
Individual Indicators
(Core Requirements)


10 - 30
20
Overall PFP Evaluation (100)
Pay Action
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NPA CORPORATE INDICATORS
Measured at National/District Level
Improve Service Enhance Customer-Focused Culture Generate Revenue Increase Efficiency
Priority Surface w/in 2 Days Priority Air w/in 2 Days Express Mail First Class Overnight First Class 2 Day First Class 3 Day OSHA Illness Injury Rate VOE Survey Score EEO Formal Complaints National Total Revenue Total Factor Productivity Net Income
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NPA UNIT INDICATORS
Measured at Unit Level
Improve Service Enhance Customer-Focused Culture Generate Revenue Increase Efficiency
Priority Surface w/in 2 Days First Enroute Scan to Delivery International Service Safety Programs Grievance Rates Total Operating Expense BPI F1 Deliveries per Hour
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NPA UNIT INDICATORS
Indicators, Weights Targets
Indi-cators Wgt Non-C Non-C Non-C Contributor Contributor Contributor Contributor Contributor Contributor High C High C High C Excep C Excep C Excep C
Indi-cators Wgt 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1 10 91.5 92.0 92.5 93.0 93.5 94.0 94.4 94.9 95.3 95.7 96.1 96.6 97.0 97.4 97.9
2 5 84.3 85.0 85.8 86.5 87.3 88.0 88.6 89.2 89.8 90.4 91.1 91.7 92.3 92.9 93.5
3 5 91.7 92.3 93.0 93.7 94.3 95.0 95.3 95.6 95.8 96.1 96.4 96.7 96.9 97.2 97.5
4 10 92.0 92.4 92.8 93.2 93.6 94.0 94.3 94.5 94.8 95.0 95.4 95.8 96.2 96.6 97.0
Etc. Etc.
Plan
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NPA Success Through Metrics
Be An Informed Leader

• Know the different NPA metrics/targets for your
  position
• Use NPA for monitoring performance
• Use NPA for ideas on improving performance
• Show your employees how to use NPA

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NATIONAL PERF. ASSESSMENT
NPA HOME PAGE
Home Page

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Page 1/1
NPA Success Through Metrics
Status Reports on Corporate Results
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Page 1/1
NPA Success Through Metrics
Status Report on Unit Results
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NATIONAL PERF. ASSESSMENT
NPA IMPROVE YOUR SCORE
Improve Your Score
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NATIONAL PERF. ASSESSMENT
NPA IMPROVE YOUR SCORE
Improve Your Score
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NPA Success Through Metrics
Improve Your Score Quick Link (MVA)
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NATIONAL PERF. ASSESSMENT
Contacts
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USPS Pay-For-Performance
Presentation Agenda

• What have we achieved?
• PFP overview
• NPA driving success through metrics
• PES driving success through evaluation
• PES Administration
• Compensation strategies

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PES Success Through Evaluation
Be An Informed Leader

• Know how individual contributions can lead to
  improved overall performance
• Know the different measurements of individual
  performance (core requirements) for different
  employees

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PFP DETAILS
PFP Model
Area/Field PCES/EAS
HQ PCES/EAS
EAS PM
Corporate and Unit Indicators (NPA)
70 - 90
80
100
Individual Indicators
(Core Requirements)


10 - 30
20
Overall PFP Evaluation (100)
Pay Action
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PFP DETAILS
Overall PFP Evaluation
Field EAS (non-PMs and Non-Managers)
Corporate and Unit Indicators
(National Performance Assessment)
70

Individual Indicators
(Core Requirements)
30
Overall PFP Evaluation (100)
Pay Action
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Field EAS Core Requirements
CORE REQUIREMENTS

• Measurable and trackable through an identified
  data source
• Established at the beginning of the year by HQ
  and made available to employees/evaluators for
  review during the objective-setting process
• Three are selected from a drop-down menu in on
  web according to function and job title

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CORE REQUIREMENTS
Sample Field EAS Core Requirements
Operations Marketing Finance
Increase Operational Productivity Reduce Overtime Plan Reduce Workhours to Plan Increase Carriers in by 1700 Wait Time in Line gt 5 Minutes BMEU Proficiency MERLIN Utilization Customer Satisfaction Measurement (CSM-B) Performance-Based Verification Customer Adoption of Electronic Documentation Workhour Performance to Plan Non-Personnel Expenses to Plan FLASH Non-Payroll Data Entry Salary Benefit Performance to Plan Overtime Percentage
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CORE REQUIREMENTS
Field EAS Pull Down Menu on Web
http//blue.usps.gov/hrisp/ser/pfp/core_req_fy2008
.htm
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Field EAS Oral Communications
CORE REQUIREMENTS
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Field EAS Oral Communications
CORE REQUIREMENTS

• Oral Communications
• No target should ever be set for this Behavioral
  Objective
• Employees write Narrative describing the action
  they plan to take to achieve objectives
• This objective should NOT be used as a means to
  add additional core requirements

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PES Success Through Evaluation
Process Overview

• Objective Setting
• Mid-Year Accomplishments/Review
• End-of-Year Accomplishments/Review
• Rating Process

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PES Success Through Evaluation
Process Overview

• Objective Setting
• Mid-Year Accomplishments/Review
• End-of-Year Accomplishments/Review
• Rating Process

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Objective Setting
PES Success Through Evaluation

• Interactive Process between Evaluator and
  Employee
• Evaluator must first know the focus for the
  year for his/her team
• Interactive discussion with employee as to
  explain focus and to discuss core requirements
• Clarify expectations and come to a mutual
  understanding of the cores selected

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PES Success Through Evaluation
Objective Setting Setting Targets
BREAKTHROUGH
.
STRETCH
PAY
PLAN
.
HIGH CONTR
EXCEPTIONAL CONTRIBUTOR
NON CONTR
CONTRIBUTOR
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Objective Setting
PES Success Through Evaluation

• Contributor Achievement to Plan. Think in
  terms of beating the same score for last year.
  Set targets at this level to beat the prior
  years performance
• High Contributor Stretch. Set the target at
  this performance level to be a challenging jump,
  more challenging than plan but possible to
  achieve.
• Exceptional Contributor Breakthrough. This may
  seem almost unattainable but bears exceptional
  rewards. Breakthrough performance is the most
  challenging it has a direct impact on unit and
  corporate performance.

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PES Success Through Evaluation
Process Overview

• Objective Setting
• Mid-Year Accomplishments/Review
• End-of-Year Accomplishments/Review
• Rating Process

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PES Success Through Evaluation
Mid-Year Accomplishments/Review

• On-going opportunity for feedback
• Where are we
• Where do we need to go
• How do we get there
• Recommendations for continuous improvement

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PES Success Through Evaluation
Process Overview

• Objective Setting
• Mid-Year Accomplishments/Review
• End-of-Year Accomplishments/Review
• Rating Process

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PES Success Through Evaluation
End-of-Year Accomplishments/Review

• Pulls together contributions to corporate and
  unit performance and individual core requirements
• End of Year
• Core Requirements
• NPA Report Card

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PES Success Through Evaluation
Process Overview

• Objective Setting
• Mid-Year Accomplishments/Review
• End-of-Year Accomplishments/Evaluation
• Rating Process

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PES Success Through Evaluation
End-of-Year Rating

• Assigns individual core requirement ratings
• Based on targets set
• Rated on a 1 through 15 scale
• Allows for flexibility in distinguishing
  differences in performance
• Potential for more precise feedback/ratings of
  performance

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PES Success Through Evaluation
Sample End-of-Year Rating Calculation

• Sample Based on Pay Package
• Field EAS
• Individual Core Requirements 30
• NPA 70

• Postmasters
• Individual Core Requirements 20
• NPA 80

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PES Success Through Evaluation
End-of-Year Rating
Indicator Weight Rating Score
NPA Composite Summary 70 70 5.65 3.96
Core Requirements 30 8 6 0.48
Core Requirements 30 8 7 0.56
Core Requirements 30 8 7 0.56
Core Requirements 30 6 6 0.36
Overall PFP Rating 5.92
Rounded to nearest whole number 6 Rounded to nearest whole number 6 Rounded to nearest whole number 6
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USPS Pay-For-Performance
Presentation Agenda

• What have we achieved?
• PFP overview
• NPA driving success through metrics
• PES driving success through evaluation
• PES Administration
• Compensation Strategies

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ADMINISTRATION
Objective Setting
Start
Employee and evaluator have a one-on-one meeting
to discuss core requirements.
Employee logs in to PES and accesses the
Objective Setting screen.
Employee enters core requirements and submits
them to his evaluator for review.
E-mail alerts employee that objectives were
returned for additional work
Evaluator logs in to PES, reviews the employees
objectives, and either approves them or returns
them for additional work.
Objectives approved by evaluator
End
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ADMINISTRATION
Mid-Year Accomplishments/Review
Start
Legend
Employee Action
Employee logs in to PES accesses the Mid-Year
Accomplishments screen.
Evaluator Action
Higher-Level Evaluator Action
Employee enters accomplishments submits them to
his evaluator for review.
E-mail alerts employee that accomps. were
returned for additional work
Accomps. do not require additional work
Evaluator logs in to PES reviews employee
accomplishments.
Evaluator holds one-on-one meeting with the
employee.
Evaluator logs back in to PES, records final
comments, and records the date of the discussion.
Optional Higher-level evaluator can record
comments.
End
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ADMINISTRATION
EOY Accomplishments/Evaluation
Start
Legend
Employee Action
Employee logs in to PES accesses the End-of-Year
Accomplishments screen.
Evaluator Action
Higher-Level Evaluator Action
Employee enters accomplishments submits them to
his evaluator for review.
E-mail alerts employee that accomps. were
returned for additional work
Accomps. do not require additional work
Evaluator logs in to PES reviews employee
accomplishments.
Evaluator holds one-on-one meeting with the
employee.
Evaluator logs back in to PES, records final
comments, and records the date of the discussion.
Optional Higher-level evaluator can record
comments.
End
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ADMINISTRATION
Rating Process
Start
Evaluator Action
Legend
Higher-Level Evaluator Action
Evaluator logs in to PES accesses Rating screen.
Evaluator accesses an employees record.
Employee should get no rating
Employee should be rated
Employee should be excluded
Evaluator enters a recommended rating.
Evaluator assigns appropriate no rating code.
Evaluator excludes employee provides comments.
Evaluator submits recommended ratings to
higher-level evaluators.
Higher-level evaluator logs in to PES accesses
Rating screen.
Higher-level evaluator reviews and either
approves or changes each rating that requires his
review.
End
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USPS Pay-For-Performance
Presentation Agenda

• What have we achieved?
• PFP overview
• NPA driving success through metrics
• PES driving success through evaluation
• PES Administration
• Compensation Strategies

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Compensation Strategies
Be An Informed Leader

• Understand postal compensation strategies
• Know how success on PFP impacts your pay
• Know how success on PFP impacts your subordinate
  employees pay
• Use PFP calculators for illustrating how PFP is
  calculated within EAS grades
• Know the different pay rules for LWOP, partial
  year participation, and job changes occurring
  before the payment

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1970 Postal Reorganization Act
Compensation Strategies

• Mandatory Compensation Levels
• Pay comparability to the private sector
• Salary cap to cabinet level
• Provide Federal retirement, unemployment, and
  injury compensation systems
• Other Mandates
• Attraction retention of qualified management
• Adequate reasonable differential
• Well motivated workforce

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Compensation Strategies
1970 Postal Reorganization Act

• Collective bargaining
• 625,000 blue collar employees
• Binding arbitration
• Pay consultations
• 75,000 supervisors postmasters
• USPS has final say

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Compensation Strategies
Employment Cost Index (ECI)
If Under Market
INCREASE
If At Market
About 2.5
If Over Market
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Compensation Strategies
EAS Grade Maximum Changes
EAS Grds FY 2001 Merit 12/29/01 FY 2002 Merit 12/28/02 FY 2003 Merit 12/27/03 FY 2004 PFP 1/8/05 FY 2005 PFP 1/7/06 FY 2006 PFP 1/6/07
22-26 3.75 3.75 4.0 3.5 3.75 2.25
16-21 3.3 3.3 3.5 3.25 3.5 2.25
11-15 2.55 2.55 3.0 3.0 3.0 2.25
1-10 0.0 0.0 0.0 1.5 1.5 1.0
A-E .50 .50 .50 .25 .50 .25
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15-Point Evaluation System
PAY ACTIONS
NC C C HC EC
3 6 9 12 15
2 5 8 11 14
1 4 7 10 13
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EAS PFP Pay Matrix
PAY ACTIONS
NC C C HC EC
3 0 6 3.5 9 6.5 12 9.5 15 12.0
2 0 5 3.0 8 5.75 11 8.75 14 11.0
1 0 4 2.5 7 5.0 10 8.0 13 10.25

• Paid as salary increase up to grade maximum
  balance as lump sum.

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Compensation Strategies
EAS PFP Calculator
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Compensation Strategies
http//blue.usps.gov/hrisp/comp/paysalary/payforpe
rformance.htm