U.S. Postal Service: Little Progress Made in Addressing Persistent
Labor-Management Problems (Testimony, 11/04/97, GAO/T-GGD-98-7).

GAO discussed its report on the efforts of the Postal Service, the four
major labor unions, and the three management associations to improve
employee working conditions and overall labor-management relations,
focusing on: (1) the extent to which the Postal Service, the four
unions, and the three management associations have progressed in
addressing persistent labor-management relations problems since GAO's
1994 report was issued; (2) the implementation of various improvement
efforts, or initiatives, some of which were intended to help these eight
organizations deal with problems identified in the 1994 report; and (3)
approaches that might help the eight organizations improve
labor-management relations.

GAO noted that: (1) little progress has been made in improving
persistent labor-management relations problems at the Postal Service
since 1994; (2) although the Postal Service, the four major unions, and
the three management associations generally agreed that improvements
were needed, they have been unable to agree on common approaches to
solving such problems; (3) these parties have not been able to implement
GAO's recommendation to establish a framework agreement that would
outline common goals and strategies to set the stage for improving the
postal work environment; (4) in a recent report, GAO described some
improvement initiatives that many postal, union, and management
association officials believed held promise for making a difference in
the labor-management relations climate; (5) despite actions taken to
implement such initiatives, little information was available to measure
results, as some initiatives: (a) had only recently been piloted or
implemented; or (b) were not fully implemented or had been discontinued
because postal, union, and management association officials disagreed on
the approaches used to implement the initiatives or on their usefulness
in making improvements; (6) efforts to resolve persistent
labor-management relations problems pose an enormous challenge for the
Postal Service and its unions and management associations; (7) with
assistance from a third-party facilitator, the Postal Service and
leaders from the four union and the three management associations
convened a summit, aimed at providing an opportunity for all the parties
to work toward reaching agreement on how best to address persistent
labor-management relations problems; (8) another such opportunity
involves the strategic plan required by the Government Performance and
Results Act, which can provide a foundation for all major postal
stakeholders to participate in defining common goals and identifying
strategies to be used to achieve these goals; (9) a proposal was
included in pending postal reform legislation to establish a
presidentially appointed commission that could recommend improvements;
(10) GAO continues to believe that it is important for the eight
organizations to agree on appropriate strategies for addressing
labor-management relations problems; (11) various approaches exist that
can be used to help the organizations attain consensus; and (12) without
such consensus, the ability to sustain lasting improvements in the
postal work environment may be difficult to achieve.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD-98-7
     TITLE:  U.S. Postal Service: Little Progress Made in Addressing 
             Persistent Labor-Management Problems
      DATE:  11/04/97
   SUBJECT:  Labor-management relations
             Postal service
             Government employee unions
             Labor negotiations
             Personnel management
             Human resources training
             Surveys
             Employee incentives
             Working conditions
             Federal agency reorganization
IDENTIFIER:  USPS Employee Opinion Survey
             USPS Associate Supervisor Program
             USPS Delivery Redesign Program
             
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Cover
================================================================ COVER


Before the Subcommittee on the Postal Service, House Committee on
Government Reform and Oversight

For Release on Delivery
Expected at
10:00 a.m., EST
Tuesday
November 4, 1997

U.S.  POSTAL SERVICE - LITTLE
PROGRESS MADE IN ADDRESSING
PERSISTENT LABOR-MANAGEMENT
PROBLEMS

Statement of Bernard L.  Ungar
Director, Government Business
Operations Issues

GAO/T-GGD-98-7

GAO/GGD-98-7T


(240271)


Abbreviations
=============================================================== ABBREV

  APWU - American Postal Workers Union
  ASP - Associate Supervisor Program
  EOS - Employee Opinion Survey
  FMCS - Federal Mediation and Conciliation Service
  GAO - General Accounting Office
  NALC - National Association of Letter Carriers
  NAPS - National Association of Postal Supervisors
  NAPUS - National Association of Postmasters of the United States
  PMG - Postmaster General

U.S.  POSTAL SERVICE:  LITTLE
PROGRESS MADE IN ADDRESSING
PERSISTENT LABOR-MANAGEMENT
PROBLEMS
====================================================== Chapter SUMMARY

GAO found that since its September 1994 report was issued, little
progress has been made in improving persistent labor-management
relations problems at the Postal Service.  Although the Service, the
four major unions, and the three management associations generally
agreed that improvements were needed, they have been unable to agree
on common approaches to solving such problems.  Moreover, these
parties have not been able to implement GAO's recommendation to
establish a framework agreement that would outline common goals and
strategies to set the stage for improving the postal work
environment. 

In its recent report, GAO described some improvement initiatives that
many postal, union, and management association officials believed
held promise for making a positive difference in the labor-management
relations climate.  Despite actions taken to implement such
initiatives, little information was available to measure results. 
Some initiatives had only recently been piloted or implemented. 
Other initiatives were not fully implemented or had been discontinued
because postal, union, and management association officials disagreed
on the approaches used to implement the initiatives or on the
usefulness of the initiatives to help make improvements. 

Efforts to resolve persistent labor-management relations problems
pose an enormous challenge for the Service and its unions and
management associations.  However, in today's dynamic and competitive
communications environment, the Service can ill afford to be burdened
with these problems.  Recently, with assistance from a third-party
facilitator, the Service and leaders from the four major unions and
the three management associations convened a summit, aimed at
providing an opportunity for all the parties to work toward reaching
agreement on how best to address persistent labor-management
relations problems.  Another such opportunity involves the strategic
plan required by the Government Performance and Results Act, which
can provide a foundation for all major postal stakeholders to
participate in defining common goals and identifying strategies to be
used to achieve these goals.  In addition, a proposal was included in
the pending postal reform legislation to establish a presidentially
appointed Commission that could recommend improvements. 

GAO continues to believe that it is important for the eight
organizations to agree on appropriate strategies for addressing
labor-management relations problems.  Various approaches exist that
can be used to help the organizations attain consensus.  Without such
consensus, the ability to sustain lasting improvements in the postal
work environment may be difficult to achieve. 


U.S.  POSTAL SERVICE:  LITTLE
PROGRESS MADE IN ADDRESSING
PERSISTENT LABOR-MANAGEMENT
PROBLEMS
==================================================== Chapter STATEMENT

Mr.  Chairman and Members of the Subcommittee: 

We are pleased to be here today to discuss our report\1 on the
efforts of the Postal Service, the four major labor unions, and the
three management associations to improve employee working conditions
and overall labor-management relations.\2 Our recently issued report
provides updated information related to our September 1994 report,
which identified various labor-management relations problems in the
Postal Service and made recommendations for addressing such
problems.\3 In our most recent report, we discussed the challenges
that these eight organizations continue to face in attempting to
improve labor-management relations.  Specifically, this report
provides information on three topics:  (1) the extent to which the
Service, the four unions, and the three management associations have
progressed in addressing persistent labor-management relations
problems since our 1994 report was issued; (2) the implementation of
various improvement efforts, referred to in the report as
initiatives, some of which were intended to help these eight
organizations deal with the problems that we identified in our 1994
report; and (3) approaches that might help the eight organizations
improve labor-management relations. 

To determine implementation progress on the initiatives, we
identified 32 improvement initiatives that had been implemented and
confirmed with postal, union, and management association officials
that these initiatives generally included all known initiatives that
had been implemented.  Given time and resource limitations, which
made detailed follow-up on all 32 initiatives impractical, we focused
on obtaining information on the status and results of 10 of the 32
initiatives, which we believed had potential to address some of the
recommendations in our 1994 report.  To identify approaches that
could help the eight organizations achieve consensus, we generally
reviewed proposed postal reform legislation and the sections of the
Government Performance and Results Act related to the Postal Service. 
Also, we interviewed the Director of the Federal Mediation and
Conciliation Service (FMCS) to obtain information about the extent to
which the Service was using a third party to serve as a facilitator
in labor-management discussions, which we recommended in our 1994
report. 


--------------------
\1 U.S.  Postal Service:  Little Progress Made in Addressing
Persistent Labor-Management Problems (GAO/GGD-98-1; Oct.  1, 1997). 

\2 The four major postal labor unions include the American Postal
Workers Union (APWU), the National Association of Letter Carriers
(NALC), the National Postal Mail Handlers Union (Mail Handlers), and
the National Rural Letter Carriers' Association (Rural Carriers). 
The three management associations include the National Association of
Postal Supervisors (NAPS), the National Association of Postmasters of
the United States (NAPUS), and the National League of Postmasters of
the United States (the League). 

\3 U.S.  Postal Service:  Labor-Management Problems Persist on the
Workroom Floor (GAO/GGD-94-201A/B; Sept.  29, 1994). 


   LITTLE PROGRESS HAS BEEN MADE
   IN IMPROVING LABOR-MANAGEMENT
   RELATIONS PROBLEMS
-------------------------------------------------- Chapter STATEMENT:1

Since our 1994 report was issued, the Postal Service has improved its
overall financial performance, as well as its delivery of First-Class
Mail.  However, little progress has been made in improving persistent
labor-management relations problems.  In many instances, such
problems were caused by autocratic management styles, the sometimes
adversarial relationships between postal management and union
leadership at the local and national levels, and an inappropriate and
inadequate performance management system.  Labor-management problems
make it more difficult for these organizations to work together to
improve the Service's performance so it can remain competitive in
today's dynamic and competitive communications market. 

In recent years, we have found that the sometimes adversarial
relationships between postal management and union leadership at
national and local levels have generally persisted, as characterized
by

(1)a continued reliance on arbitration by three of the four major
unions to settle their contract negotiation impasses with the
Service, also known as interest arbitration;

(2)a significant rise not only in the number of grievances that have
been appealed to higher levels but also in the number of those
awaiting arbitration; and

(3)until recently, the inability of the Service and the other seven
organizations to convene a labor-management relations summit to
discuss problems and explore solutions. 

According to various postal, union, and management association
officials whom we interviewed, the problems persist primarily because
the parties involved cannot agree on common approaches for addressing
these problems.  This, in turn, has prevented the Service and the
other seven organizations from sustaining the intended benefits of
specific improvement efforts that could help improve the postal
workroom climate.  I would now like to discuss these problems in more
detail. 

Regarding the use of interest arbitration, as discussed in our 1994
report, contract negotiations occur nationally between the Service
and the four labor unions every 3 or 4 years.  Since as far back as
1978, interest arbitration has sometimes been used to resolve
bargaining deadlocks in contract negotiations by APWU, NALC, and Mail
Handlers.  The most recent negotiations occurred for contracts
expiring in November 1994 for those three unions.\4 The issues at
stake were similar to those raised in previous negotiations, which
included the unions' concerns about wage and benefit increases and
job security and postal management's concerns about cost cutting and
flexibility in hiring practices.  According to a postal official,
negotiations about old issues that keep resurfacing have at times
been bitter and damaging to the relationship between the Service and
the unions at the national level.  Union officials also cited the
Service's contracting out of various postal functions--also known as
outsourcing--as a topic that has caused them a great deal of concern. 

Another problem concerns the number of unsettled grievances.\5 In our
1994 report, we highlighted issues associated with the
grievance/arbitration process, including the high number of
grievances that had been filed and the inability of postal and union
officials to resolve them at the lowest possible levels.  The
Service's national grievance arbitration database showed that in
fiscal year 1994, a total of 65,062 grievances involved postal
management and union officials at the area office level.  According
to the Service, this number has increased to 89,931 in fiscal year
1996, an increase of approximately 38 percent.  Also, according to
Service data, the number of grievances awaiting arbitration by a
third-party arbitrator--known as backlogged grievances--has increased
from 36,669 in fiscal year 1994 to 69,555 in fiscal year 1996, an
increase of approximately 90 percent.\6

Although the postal management and union officials we interviewed for
our 1994 review agreed that the total volume of grievances was too
high, they differed on the causes of this high volume.  These
officials told us that their views had not changed significantly
since we issued our 1994 report.  Generally, the officials tended to
blame each other for the high volume of grievances being filed and
the large number of backlogged grievances. 

Finally, at the time our 1997 report was issued, the Postal Service
and the other seven organizations had been unable to convene a
labor-management relations summit.  The Postmaster General (PMG)
proposed the summit over 2 years ago to, among other things, address
our recommendation to establish a framework agreement of common goals
and approaches that could help postal, union, and management
association officials improve labor-management relations and employee
working conditions.  Initially, the responses from the other seven
organizations to the PMG's invitation were mixed.  For instance,
around January 1995, the leaders of the three management associations
and the Rural Carriers union accepted the invitation to participate
in the summit.  However, at that time, the contracts for three
unions--APWU, NALC, and Mail Handlers--had expired and negotiations
had begun.  The union leaders said they were waiting until contract
negotiations were completed before making a decision on the summit. 
In April 1996, when negotiations had been completed, the three unions
agreed to participate. 

Because of these initial difficulties in convening the summit, in
February 1996, the Service asked the Director of FMCS to provide
mediation services to help convene the summit.  Also, in March 1996,
Mr.  Chairman, you encouraged the FMCS Director to assist the Service
by providing such services.  As discussed in our 1997 report,
although various preliminary meetings had taken place to determine an
agenda, the efforts to convene a summit were not successful. 
Recently, according to an FMCS official, a summit occurred on October
29, 1997, that was attended by various officials from the eight
organizations, including the Postal Service, the four major unions,
and the three management associations.  We are encouraged by the fact
that this meeting occurred.  Such meetings can provide the
participants a means of working toward reaching agreement on common
approaches for addressing labor-management relations problems.  We
believe that such agreement is a key factor in helping these
organizations sustain improvements in their relations and in the
postal work environment. 


--------------------
\4 For rural carriers, whose contract expired in November 1995,
negotiations resulted in the establishment of a new contract without
the use of interest arbitration.  The rural carriers have had a more
cooperative relationship with the Postal Service and generally have
been able to negotiate contracts without arbitration. 

\5 The grievance/arbitration process is the primary mechanism craft
employees use to communicate their work-related concerns; and a
"grievance," according to postal labor agreements, is "a dispute,
difference, disagreement, or complaint between the parties related to
wages, hours, and conditions of employment."

\6 Stated another way, in fiscal year 1996, the average rate of
grievances to be decided at the area level had risen to 13 for every
100 postal craft employees, compared to fiscal year 1994 when the
average rate was 10 such grievances per 100 craft employees.  For
backlogged grievances, in fiscal year 1996, the average rate of such
grievances had risen to 10 grievances per 100 craft employees, an
increase from the average rate of 6 such grievances per 100 craft
employees in fiscal year 1994. 


   ACTIONS TO IMPLEMENT
   INITIATIVES HAVE BEEN TAKEN,
   BUT LITTLE INFORMATION WAS
   AVAILABLE ON RESULTS
-------------------------------------------------- Chapter STATEMENT:2

Since our 1994 report was issued, the Postal Service and the other
seven organizations have continued their efforts to address
labor-management problems by implementing, or attempting to
implement, specific improvement initiatives.  During our discussions
with these officials, they said that they generally agreed with the
overall goals of some of the 10 improvement initiatives that we
focused on.  They also believed that some of these initiatives held
promise for making a positive difference in the labor-management
relations climate.  However, although various actions had been taken
to implement the 10 initiatives that we reviewed, we found it
difficult to determine what results, if any, were achieved, mainly
because (1) some initiatives had only recently been piloted or
implemented, (2) some were only partially implemented because of
disagreements on how to implement them, and (3) some were
discontinued because the Service and the other involved participants
disagreed on how best to use the initiatives to help improve the
postal work environment.  For each of these categories, I would like
to discuss an initiative that shows why we found it difficult to
determine results. 

  -- The Associate Supervisor Program (ASP) is an example of a
     recently implemented initiative that many officials believe may
     have the potential to improve the postal work environment.  ASP
     is a 16-week training program for new postal supervisors that
     was first established in 1994.  As of March 1997, the Service
     was still completing the last ASP pilot.  Various postal, union,
     and management association officials we interviewed at some ASP
     pilot locations told us that although they believed it was too
     soon to evaluate the results of the program, they believed it
     had the potential for providing the Service with more qualified
     and better trained supervisors.  Also, local union officials
     told us they liked the additional training that is to be
     provided to current postal supervisors under ASP.\7

  -- Delivery Redesign is an example of an initiative that has been
     only partially implemented because of disagreements among the
     parties on how to implement it.  Delivery Redesign is a program
     begun in 1995 that was to make appropriate changes to the system
     by which city letter carriers, represented by NALC, sort and
     deliver mail.  According to postal officials, in 1997, after
     numerous discussions with NALC that resulted in no agreement on
     an approach, the Service decided to test some revised processes
     for mail delivery by city letter carriers.  These processes are
     collectively known as Delivery Redesign.  Postal officials also
     told us that NALC officials, although briefed several times
     (May, July, and September 1996) on Delivery Redesign, have not
     endorsed the testing of the revised processes.  At the national
     level, NALC officials told us that they believed that revisions
     to the processes by which city carriers sort and deliver mail
     should be established through the collective bargaining process. 

  -- The Employee Opinion Survey (EOS) is an example of an initiative
     that was discontinued.  The nationwide annual EOS, begun in 1992
     and continued through 1995, was a voluntary survey designed to
     gather the opinions of all postal employees about the Service's
     strengths and shortcomings as an employer.  Postal officials
     told us that such opinions have been useful in helping the
     Service determine the extent of labor-management problems
     throughout the organization and make efforts to address those
     problems.  Efforts to continue implementing this initiative were
     hampered primarily by disagreements among the Service and the
     other involved participants over how best to use the initiative
     to help improve the postal work environment.  Also, according to
     postal officials, a lack of union participation in this
     initiative generally caused the Service to discontinue its use. 
     According to some postal and union officials, the 1995 EOS was
     boycotted primarily because some unions believed that the
     Service inappropriately used the results of past surveys during
     the 1994 contract negotiations. 


--------------------
\7 According to a postal official responsible for managing ASP, the
Service plans to make specific parts of ASP training available to
current postal supervisors, such as conflict resolution and methods
for dealing with problem employees.  The purpose of this effort is to
provide current postal supervisors with training that is similar to
the training that ASP candidates receive. 


   CONTINUED NEED TO IMPROVE
   LABOR-MANAGEMENT RELATIONS
-------------------------------------------------- Chapter STATEMENT:3

As discussed in our report, we continue to believe that to sustain
and achieve maximum benefits from any improvement efforts, it is
important for the Service, the four major unions, and the three
management associations to agree on common approaches for addressing
labor-management relations problems.  Our work has shown that there
are no clear or easy solutions to these problems.  But continued
adversarial relations could lead to escalating workplace difficulties
and hamper efforts to achieve desired improvements. 

In our report, we identified some approaches that might help the
Service, the unions, and the management associations reach consensus
on strategies for dealing with persistent labor-management relations
problems.  Such approaches included

  -- the use of a third-party facilitator,

  -- the requirements of the Government Performance and Results Act,
     and

  -- the proposed Postal Employee-Management Commission. 

As I mentioned previously, with the assistance of FMCS, the Postal
Service, the four major unions, and the three management associations
recently convened a postal summit meeting.  As discussed in our 1994
report, we believe that the use of FMCS as a third-party facilitator
indicated that outside advice and assistance can be useful in helping
the eight organizations move forward in their attempts to reach
agreement on common approaches for addressing labor-management
relations problems. 

In addition, the Government Performance and Results Act provides an
opportunity for joint discussions.  Under the Results Act, Congress,
the Postal Service, its unions, and its management associations as
well as other stakeholders with an interest in postal activities can
discuss not only the mission and proposed goals for the Postal
Service but also the strategies to be used to achieve desired
results.  These discussions can provide Congress and the other
stakeholders a chance to better understand the Service's mission and
goals.  Such discussions can also provide opportunities for the
parties to work together to reach consensus on strategies for
attaining such goals, especially those that relate to the
long-standing labor-management relations problems that continue to
challenge the Service. 

Another approach aimed at improving labor-management relations is the
proposed establishment of an employee-management commission that was
included in the postal reform legislation you introduced in June 1996
and reintroduced in January 1997.  Under this proposed legislation, a
temporary, presidentially appointed seven-member Postal
Employee-Management Commission would be established.  This Commission
would be responsible for evaluating and recommending solutions to the
workplace difficulties confronting the Service.  The proposed
Commission would prepare its first set of reports within 18 months
and terminate after preparing its second and third sets of reports.\8


--------------------
\8 Under this proposed legislation, the Commission would submit its
recommendations in the form of a written report to the President and
Congress to the extent that such recommendations involved any
legislation and to the Postal Service to the extent that the
recommendations did not involve legislation. 


   COMMENTS FROM THE POSTAL
   SERVICE, LABOR UNIONS,
   MANAGEMENT ASSOCIATIONS, AND
   FMCS
-------------------------------------------------- Chapter STATEMENT:4

We received comments on a draft of our report from nine
organizations--the Service, the four major unions, the three
management associations, and FMCS.  The nine organizations generally
agreed with the report's basic message that little progress had been
made in improving persistent labor-management relations problems,
although they expressed different opinions as to why.  Also, the nine
organizations often had different views on such matters as the
implementation of and results associated with the 10 initiatives; the
likelihood of the organizations to reach consensus on the resolution
of persistent labor-management relations problems; the desirability
of having external parties, such as Congress, become involved in
addressing such problems; and the comprehensiveness of our
methodology, which we believed was reasonable and appropriate given
the time and resources available.  We believe that the diversity of
opinions on these matters reinforces the overall message of our most
recent report and provides additional insight on the challenges that
lie ahead with efforts to try to improve labor-management relations
problems in the Postal Service. 


------------------------------------------------ Chapter STATEMENT:4.1

In summary, the continued inability to reach agreement has prevented
the Service, the four major unions, and the three management
associations from implementing our recommendation to develop a
framework agreement.  We continue to believe that such an agreement
is needed to help the Service, the unions, and the management
associations reach consensus on the appropriate goals and approaches
for dealing with persistent labor-management relations problems and
improving the postal work environment.  Although we recognize that
achieving consensus may not be easy, we believe that without it,
workplace difficulties could escalate and hamper efforts to bring
about desired improvements. 

Mr.  Chairman, this concludes my prepared statement.  My colleague
and I would be pleased to respond to any questions you may have. 


*** End of document. ***