3. SPECIAL EMPHASIS PROGRAM

The Special Emphasis Program helps ensure that all employees are fully utilized in the Postal Service workforce and have an equal opportunity to compete in every aspect of employment, including but not limited to recruitment, hiring, retention, training, career development, and promotions. As part of this program, during 2005 the Postal Service sponsored and participated in numerous conferences focused on equal opportunity, including conventions of the National Association for the Advancement of Colored People, the Urban League, the Organization of Chinese Americans, the African-American Postal League United for Success, and the Asian Pacific American Federal Career Advancement Summit. Additionally, special events were held to commemorate Black History, Women's History, Hispanic Heritage, Asian Pacific Heritage, and American Indian Heritage Months.

3. Compensation and Benefits

A. PAY COMPARABILITY

1. BARGAINING UNIT EMPLOYEES’ PAY AND BENEFITS

The average annual pay and benefits for career bargaining unit employees was $62,635 this year, excluding corporate-wide expenses which cannot be attributed to individual employees.

In an attempt to achieve compensation rates comparable to those in the private sector, negotiations between the Postal Service and its unions continue to apply the principle of moderate restraint set forth in past interest arbitration awards for those units that have compensation exceeding private sector levels.

2. NONBARGAINING UNIT EMPLOYEES’ PAY AND BENEFITS

Pay for supervisors, postmasters, and other nonbargaining employees provides an adequate and reasonable differential between first-line supervisors and bargaining-unit clerks and carriers, and meets or exceeds comparability standards.

In 2005 nonbargaining-unit employees participated in the second year of Pay-for-Performance (PFP). PFP provides for meaningful distinctions in performance ratings based on objective indicators of performance. This program continues our 10-year history of providing market-based, performance-driven pay for these employees, and is further discussed in the "Pay-for-Performance" section below.

3. EXECUTIVE PAY AND BENEFITS

Due to the limit imposed on PCES salaries by the Postal Reorganization Act, pay and benefits for many postal officers and executives do not meet comparability standards. However, within these statutory salary limitations, the Postal Service continues to provide performance-driven pay actions in support of its goal to enhance the performance-based culture.

4. PAY-FOR-PERFORMANCE

All phases of the Pay-for-Performance merit program became fully automated in the Performance Evaluation System. More than 77 thousand EAS and PCES employees now participate. PFP enables employees to concentrate on achievements within their control and based on their line of sight in the organization. Employees learn at the beginning of the evaluation period where priorities lie, what is expected of them, and how results impact the organization. PFP introduces a heightened awareness of performance distinctions, and individuals are recognized for the contributions they make to unit and corporate performance. Automatic or across-the-board pay increases have been eliminated for all executives and nonbargaining employees.

Employees are evaluated on unit and corporate performance indicators as well as individual performance objectives. The unit and corporate performance indicators are established and measured in the National Performance Assessment (NPA) system, and are aligned to improve customer service, generate revenue, manage costs, and enhance a performance-based culture. Individual core requirements provide a mechanism for employees to identify their personal contributions to unit and corporate success. When determining core requirements, employees meet with their evaluator to discuss and define specific target outcomes. The Postal Service Intranet serves as the key tool for communicating and implementing Pay-for-Performance and reinforces the Postal Service's commitment to provide specific and tangible feedback on individual performance toward established targets. The system also calculates end-of-year ratings based on achievements against targets.

5. RETIREMENT SYSTEMS

The Civil Service Retirement System (CSRS) and the Federal Employees' Retirement System (FERS) exceed the private sector comparability standard, but are required benefits under the Postal Reorganization Act. Reasons why these plans exceed private sector levels include the pension entitlement formula, full benefits being available as early as age 55, and full or nearly full indexing of pension benefits to inflation.

6. FAIR LABOR STANDARDS ACT

In 2004 the Postal Service conducted a comprehensive review of the overtime status of its exempt personnel under the guidelines of the Fair Labor Standards Act (FLSA). New regulations issued by the Department of Labor required that a review be conducted of more than 4 thousand positions. As a result of this comprehensive review, the Postal Service ensured it was in compliance with the new regulations. During 2005 the Postal Service continued to be meet compliance requirements for all FLSA guidelines.