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Chapter 3 Our Workforce

As a labor-intensive business, the Postal Service continually seeks to balance human resources so that it provides high-quality customer service as efficiently as possible. This is accomplished through careful workforce planning, optimizing the mix of career and noncareer employees, recruiting a highly-qualified workforce, providing competitive compensation and benefits, and offering effective job-based training and career development.

Compensation and Benefits

Compensation and benefits for current employees and retiree health benefits make up 80 percent of postal operating expenses. Compensation plans are designed to attract, retain, and motivate employees, while meeting all relevant statutory requirements. The sections below discuss the Postal Service’s statutory standard of pay comparability to the U.S. private sector, primary benefit plan features, and developments in compensation and benefits in 2007.


The average annual pay and benefits for career bargaining unit employees was $63,771 this year, excluding corporate-wide expenses that cannot be attributed to individual employees. To achieve compensation rates comparable with the private sector, negotiations between the Postal Service and 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.

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

Due to limits imposed by the Postal Reorganization Act and the Postal Act of 2006, the salaries, pay and benefits for many 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 its performance-based culture.


The Postal Service’s award winning Pay-for-Performance (PFP) program continued to drive organizational success in 2007. The performance results are highlighted in Chapter 5. First implemented in 2003 for postal executives and extended to Executive and Administrative Schedule (EAS) employees in 2004, the program is the sole source of annual pay adjustments for white-collar postal employees. The foundation of the evaluation system is a balanced scorecard of objective, independently-verifiable measures of service, workplace environment, productivity, and financial performance. Performance indicators are measured at national, area, district, business unit, and individual levels so that meaningful performance distinctions are made within the line-of-sight of all managers.

A significant event in 2007 was the 4-year extension of PFP resulting from pay consultations with management associations representing 72,000 supervisors and postmasters. The consultation package ensures that performance-driven pay adjustments will occur within a market-based pay structure through 2010.

At the start of the annual evaluation period, EAS and Postal Career Executive Service (PCES) employees learn the priorities of the organization and the expectations for their individual performance. Every employee is evaluated against corporate, unit, and individual objectives. Corporate and unit indicators are set and measured in the National Performance Assessment (NPA) system. NPA combines service, revenue, cost, and workforce-related indicators. Results against these general targets are balanced with the employee’s individual core requirements. The individual requirements are specific to the employee’s personal contributions to unit and corporate success. The Performance Evaluation System (PES), a Web-based system on the Postal Service Intranet, automates the recording of core requirements and accomplishment data. PES has improved efforts to provide timely and specific feedback on individual performance.

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