EXECUTIVE SUMMARY
Each year, the Postal Service must submit to the Commission copies of its most recent Annual Performance Report and Annual Performance Plan. On December 27, 2013, the Postal Service filed its fiscal year (FY) 2013 Annual Performance Report (FY 2013 Report) and FY 2014 Annual Performance Plan (FY 2014 Plan). In this report, the Commission evaluates whether the Postal Service has met the performance goals in the Postal Service’s FY 2013 Report and reviews the initiatives and targets established in the FY 2014 Plan.
In the first part of this report, the Commission analyzes the Postal Service’s four performance goals, each of which includes performance indicators that define the level of performance to be achieved. The performance goals are: (1) Service; (2) Customer Experience; (3) Financial Results; and (4) Workplace Environment. The Commission also reviews the Postal Service’s strategic initiatives, which are intended to clarify the connections between the performance goals and the actions necessary to achieve them. In the second part of this report, the Commission discusses the completeness of the Postal Service’s filings related to statutory and regulatory requirements. The Commission’s principal findings are as follows:
Service Performance
Overall, the Postal Service partially met the Service performance goal because it met some, but not all, service performance indicator targets. For presort First-Class Mail, all performance indicator targets were met. Single-Piece First-Class Mail performance results were mixed.
While the Postal Service measures service performance for all market dominant products, in FY 2013 only service performance for First-Class Mail was included as performance indicators for the Service performance goal. The Postal Service added a new Standard Mail composite target in its FY 2014 Plan. The Commission finds it encouraging that the Postal Service is now measuring and setting performance targets for other market dominant products.
Customer Experience
The Postal Service did not meet its Customer Experience performance goal in FY 2013. It had set a target of 82.5 and achieved an overall customer experience score of 78.4.
The Customer Experience goal is measured by national surveys of residential and small/medium business customers. While the Postal Service also surveys large business customers, that survey data are not used in assessing performance towards achieving the Customer Experience goal. To ensure that the satisfaction of all Postal Service customers is being addressed, the Postal Service should include a customer experience performance indicator and target measure for large business customer experiences.
In addition, a significant percentage of large business survey respondents do not meet the Postal Service’s definition of “large business.” The Postal Service should explore this issue to ensure that the survey results reflect the customer experience of the targeted respondents.
Financial Results
The Postal Service partially met its Financial Results performance goal. The FY 2013 Deliveries Per Hour (DPH) result, which the Postal Service uses to measure productivity, did not meet the target. However, the operating loss was less than forecasted.
As in previous reviews of Postal Service Annual Performance Reports and Plans, the Commission finds that the Total Factor Productivity (TFP) index may be a better measure of productivity than DPH because it includes major workload components, such as collecting, processing, transporting, and sequencing of mail for delivery that DPH does not.
Workplace Environment
The Postal Service partially met the Workplace Environment performance goal. In FY 2013, its Occupational Safety and Health Administration’s (OSHA) Illness and Injury (I&I) Rate of 5.61 met the performance target, but not the Voice of the Employee (VOE) survey target. The VOE survey score remained constant at 64.7 throughout FY 2011, FY 2012, and FY 2013, which demonstrates that the Postal Service is neither improving nor declining in this area. Additionally, given what appear to be possible delays in the Postal Service’s updates to its OSHA I&I Rate information and methodological differences from year to year, the Commission suggests the Postal Service consider adding the Department of Labor’s Total Case Rate as a performance indicator for the Workplace Environment performance goal since it is a standard, stable measure tracked for all federal agencies.
Strategic Initiatives
The strategic initiatives facilitate the Commission’s review of the performance goals under 39 U.S.C. § 3653(d) and are considered part of the Annual Performance Report and Plan. In future filings, the Postal Service should describe the relationships between the strategic initiatives and performance goals and provide the performance indicators used to measure progress in meeting targets.
The Commission also suggests that for performance goals not completely achieved, the Postal Service consider using specific strategic initiative performance measures from its internal management program activity performance measurement system to identify which strategic initiative performance did not meet program activity target goals.
Compliance with Filing Requirements
The Commission finds that the FY 2013 Report satisfies the applicable statutory and regulatory filing requirements for each performance goal. The FY 2014 Plan meets most of the applicable statutory and regulatory requirements.
The Commission’s evaluation of the Postal Service’s progress towards meeting performance goals is hampered by the manner in which the Postal Service prepares its Annual Performance Report and Plan. Strategic initiatives are included in the FY 2013 Comprehensive Statement on Postal Operations (FY 2013 Comprehensive Statement) rather than in the Postal Service’s Annual Performance Report and Plan. In addition, performance measures should be specific for each program activity, and strategic initiatives would benefit from consistency year to year.