2012 Annual Report to Congress
& Comprehensive Statement

Workplace and Employee Programs

During the best of times, managing one of the nation's largest civilian workforces is a challenging task. Maintaining employee engagement through a period of uncertainty and stress is even more difficult.

The Postal Service is fortunate to have employees whose Voice of the Employee (VOE) survey responses validate their awareness of the business conditions facing the organization (85 percent), their commitment to helping the Postal Service succeed (76 percent), and their understanding of how what they do affects service (84 percent).

Taking Steps to Control Labor Costs

Employee compensation accounts for about 80 percent of our operating expenses. So managing labor costs is a critical issue.

To reduce the size of the Postal workforce in response to reductions in mail volume and workload in FY 2012, the Postal Service offered three voluntary early retirement options to targeted groups of employees. 2,925 mailhandlers accepted the buyout offer by the August 2012 deadline.

A total of 4,275 career postmasters accepted buyout offers, and more than 3,300 managers have until Nov. 19, 2012, to decide whether to accept an early retirement offer with no buyout provision.

The Postal Service has eight collective bargaining agreements with six different unions representing more than 500,000 employees. In addition, it consults with management associations representing postmasters and supervisors. Two important accomplishments were:

  • Following binding arbitration, an agreement is now in place through May 2015 with the National Rural Letter Carriers' Association, which includes a two-year wage freeze and lower wage scales for new career and non-career employees.
  • A pay package for postmasters and supervisors has been finalized. It includes a two-year wage freeze and a reduction in the USPS share of FEHB premiums from 81 percent to 72 percent.

Redesigning Talent Management and Development Processes

Currently, 38 percent of Postal executives are eligible to retire, and by the beginning of calendar year 2015, that number will be 53 percent.

With this changing demographic of our workforce, there is a more urgent need to identify and develop top talent for the future. In response to this challenge, the Postal Service has implemented a streamlined approach to corporate succession planning (CSP) based on industry best practices.

The new CSP program focuses on the earlier identification of top performers and robust development plans to accelerate the availability of leadership talent. Expanded coaching and mentoring and more cross-functional developmental opportunities have been implemented.

Talent Acquisition efforts also have been stepped-up to ensure a steady supply of higher-level technical and specialized professionals. In FY 2012, we strengthened our professional technical skills training to support our rapidly changing operations. In addition, the Learning Management System — one of the largest in the nation — has been improved to blend classroom, online and on-the-job training.

Focusing on Employee Engagement

Pride in working for the Postal Service remained strong in FY 2012 at a 75 percent favorable VOE score. We continue to exceed external survey benchmarks against premier private sector companies on feeling valued as a Postal employee.

Communicating effectively with our large, diverse workforce scattered in thousands of locations across the country is challenging. The Postal Service makes information, tools and resources available to employees on its internal website to help them stay informed.

We also use video presentations and Area newsletters. And field managers are supplied with materials for employee briefings and postings.

Maintaining and Improving Dispute Resolution Processes

Overtime grievances

In FY 2012, the Postal Service has focused its attention on reducing overtime grievances. Overtime disputes have been a consistent source of disagreement over an extended period of time. Individual districts have been challenged to identify the root problems that generate these grievances and develop and execute plans to resolve them.

Equal employment opportunity

The Postal Service is committed to providing a safe and productive work environment. It will not tolerate harassment of any type and holds managers responsible for preventing it.

This year, Poster 72, Equal Employment Opportunity is the Law, was updated to include genetic information. The Genetic Information Non-discrimination Act of 2008, (GINA), makes it illegal to discriminate against employees or applicants because of genetic information.

GINA took effect Nov. 21, 2009, and the EEOC issued regulations in July 2010.

The Postal Service provides high quality and timely complaint processing in accordance with EEOC regulations. This year 14,683 EEO informal complaints were filed, with 98.62 percent of them processed within regulatory timeframes. Letters of Acceptance or Dismissal met regulatory timeframes 99 percent of the time, investigations of accepted formal complaints 99 percent of the time, Final Agency Decisions 97 percent of the time, and Notice of Final Action 99 percent of the time.

Contract investigators and final agency decision writers are used to help maintain the neutrality of the investigation and decision process. The Postal Service also has 21 interagency agreements to process EEO cases on a fee-for-service basis.

Working Hard to Maintain a Safe, Secure Workplace Environment

The Postal Service is committed to the safety and health of all Postal and contract employees, the requirements of the Occupational Safety and Health Administration (OSHA) are designed to protect employees from safety and health hazards.

The Postal Service's safety record continues to improve annually. In FY 2012, the OSHA injury and illness (I&I) frequency rate of 5.44 per 100 employees is a nine percent improvement over last year. These results are due to continued emphasis on safety by employees and management, including having safety a part of management pay for performance stressing development of Accident Reduction Plans, and completion of safety inspections, as well as timely abatement of identified deficiencies.

In FY 2012, there was a decrease in new injury and illness claims. The Postal Service filed 43,268 new claims in FY 2012 compared to 44,659 in 2011, for a 3.1 percent decrease.

Re-enforcing the Value of Diversity in the Workforce

The Postal Service is committed to a diverse workforce, which means building an inclusive environment that respects the uniqueness of every individual and encourages the contributions of people from different backgrounds, experiences and perspectives.

In FY 2012, minorities comprised 31.2 percent of the workforce and women comprised 44.1 percent. 21.2 percent of employees are Black/African-American; 8.1 percent are Asian; 1.6 percent are American Indian or Alaska Native; and 0.3 percent are Native Hawaiian or Pacific Islanders. Additionally, 8.8 percent of the workforce is of Hispanic/Latino ethnicity.

Providing Easily Accessible Employee Support Services

The Postal Service provides a broad range of support services, including a robust Employee Assistance Program that offers professional assistance to employees facing difficult personal problems.

There is an easy-to-use Internet service that employees can access from home or at the office to obtain information on benefits, career opportunities, employment rights, health and safety, organizational changes, retirement, etc.

Workforce problems also are identified using the Voice of the Employee (VOE) survey and other programs, and resources are provided to address emerging workplace problems before they become serious.

Monitoring Employee Compensation

Pay and bonuses for non-bargaining employees, including officers and executives, remained frozen in FY 2012. This was the fourth consecutive year that compensation for executive officers has been impacted by either a freeze in salary and/or a non-payment of performance lump sums.

Pay for performance remains a fundamental part of our management system. Goals are still set, and individual performance is formally reviewed semi-annually. Comparability of Postal pay and benefits with the private sector continues to be a complex issue with different interpretations of standards.

Executive Compensation


Total Compensation in Excess of Federal Executive Level 1 Compensation ($199,700 in Calendar Year 2011)

Drew T. Aliperto


Megan J. Brennan


Ellis A. Burgoyne


Joseph Corbett


Patrick R. Donahoe


David C. Fields

$19, 346

Mary A. Gibbons


Timothy C. Haney


William C. Rucker III


Karen E. Schenck


Jordan M. Small


Anthony J. Vegliante


Linda Welch


Note: Provided in Compliance with Title 39, Section 3686 (d)

Evaluating Alternate Health Care Proposals for Postal Employees

Currently, the Postal Service and its employees participate in the Office of Personnel Management Federal Employees Heath Benefits plan.

In addition to paying annual retiree health care premiums of $2.6 billion, the Postal Service is required to pre-fund the Retiree Health Benefits Fund by about $5.6 billion annually through 2016, although the Postal Service was forced to default on the 2011 and 2012 payments, totaling $11.1 billion, due to insufficient cash.

These requirements, coupled with the decline in revenue and mail volume facing the Postal Service, have prompted Postal management to propose offering its own health care benefits plan which would require employee participation in Medicare parts A and B and offer a four-tiered health care coverage structure. Its estimated that the Postal health plan would virtually eliminate the unfunded retiree health care liability.