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Mr. McCLOSKEY. Mr. Chairman, I yield.

Chairman CLAY. The people who don't sign the waiver go into a pool, and you say you will try to find them something.

Mr. RUNYON. Yes, sir.

Chairman Clay. What happens to them the minute they go into the pool? Do they continue to get their pay?

Mr. RUNYON. Yes, sir.

Chairman CLAY. And they don't have any responsibility? What do they do?

Mr. RUNYON. What we are going to be doing is training them for other jobs, teaching them how to do new jobs. So it is a matter of helping them solve the problems that we have created.

Chairman CLAY. Thank you.
Thank you for yielding.

Mr. MCCLOSKEY. Mr. Runyon, just hopping around a little bit, in your bond issue option, which sounds very promising vis-a-vis financing to the way you are now, I remember extended discussions with Comer Coppie and, indeed, a meeting with the Under Secretary of the Treasury. You could almost slice the tension with a knife publicly and privately. Has Treasury signed off on this proposal yet?

Mr. RUNYON. No, sir.

Mr. McCLOSKEY. In all candor and as a tribute to you, I think they may have met their match in stalling or being less cooperative than they should. Could you offer us some insight into that and maybe the defeasance issue? I'm on your side on that. It was somewhat of a distressful meeting with the Treasury and, quite frankly, some hostility from them that was, I think, unjustified.

Mr. RUNYON. The way we work with them-first, Treasury has never, to my knowledge, refinanced a debt that they own. They re serve the right to refuse to loan us money before we can go outside. So we will supply that right. And, by the way, we set the conditions under which we want to borrow that money, and the conditions that we want to borrow that money is to have call provisions. FFB does not provide call provisions, and so we need call provisions, because to be fiscally responsible we have to have the ability to use those call provisions.

We figure that they will probably refuse to refinance the debt that we are calling, at which time we have the legal right to go to Wall Street, or go wherever-in this case, Wall Street—to borrow that money. So we think that we have every right to do what we are setting out to do. This is something that I have had some experience with at TVA. We have made several bond issues there. We made one $4 billion bond issue, then a month later we made another $4 billion issue. I think they have made another couple of billion dollar bond issues since I left there. So I think that they have refinanced about $10 billion.

At the interest rates that are available now, for us not to refinance would make us fiscally irresponsible, and we have a responsibility to the people who use the Postal Service to reduce our costs in every way we know, and that is one way that we know how to do it, and we think we need to go forward and do it.

Mr. McCLOSKEY. I agree, and I commend you on that, and since I have been somewhat involved previously I would appreciate being advised as to how that goes, particularly if there is any problem.

Something that has been alluded to once or twice already—and this may be my next to the last question, Mr. Chairman; there are many other people with interesting concerns—but when you called me, Mr. Runyon, on the first day that you were announcing the plan, in essence, you said, “This is not going to affect anyone that handles the mail”-you know, the mail handlers, the clerks, et cetera—"and we are going after management here." I guess your statement says 11,000 plus managers have decided to take the early out. Your goal was around 30,000 or 40,000 managers.

What is the status and this has been alluded to already, but what is the status of all this now? As was talked about time and time again at the previous hearing with Mr. Coughlin, I don't quite sense, at least in my area of the Midwest, the hysteria that was rampant a month ago, but there is still major stress and problems.

As an example, one post office is sending clerks and carriers down to help another post office bringing in interim or temporary carriers and clerks who are, so far, 100 percent failing the physicals. So there is going to be some delivery where rubber hits the road problems. But where are we really on these management goals?

I am just concerned that what you told me would not affect the people that handle the mails. If anything, it is the people that handle the mails that are overwhelmingly taking advantage of these early outs. I can't see how you can lose all those skills in a matter of 2 months, as I said to Mr. Coughlin, and not have major stress.

Mr. RUNYON. Of the 28,000 craft people that you are talking about, 12,000 of those positions are not mail handling positions, they are administrative functions. Then we have the other 11,400, I believe it is, of supervisors. So we actually have only about 7,000 employees to go, to accomplish the 30,000 administrative positions we are talking about, and we think that because of the number of retirements that we have, we will be able to place people in different locations.

Of these craft positions that we are talking about, some of our supervisors came from those positions.

Mr. McCLOSKEY. I understand.

Mr. RUNYON. As a matter of fact, we have had some supervisors recently who have asked to go back into those craft positions, which is helping some of the problems.

Chairman Clay. The time of the gentleman has expired.
Mr. McCLOSKEY. An additional minute, please.

But you really do not think we are getting an overabundance of craft, clerks, and carriers leaving as to what you had originally programmed?

Mr. RUNYON. No. We are about on target with what we programmed, and the extension, by the way, to November 20 does not include those people.

Mr. McCLOSKEY. Thank you, Mr. Postmaster General.
Thank you, Mr. Chairman.

Chairman CLAY. I hope the gentleman remembers in January, when you vote on chairmen of the committees, that I'm very patient and tolerant and all of that.

Mrs. Morella.
Mrs. MORELLA. Thank you, Mr. Chairman.

I'm glad he asked that question, because I was trying to mentally go through that figuring; if you had 11,500 and then you had your other craft people—and I didn't think the craft positions were included as managerial—and I wondered where 7,000 alone was all that was necessary. So I appreciated that line of questioning.

When you streamline the headquarters and downsize the Postal Service, there is going to be undoubtedly a need for management training. I wondered if you might comment on what your plans are for management training-how many facilities there are, will these training centers be kept open? I would like to personally ask you about whether you have any comments in regard to the William Bolger Management Academy, about which I have had many inquiries. May I ask that as my first question?

Mr. RUNYON. Yes. We are looking at the training we will do. We need to improve our training. It needs to be better than it has been. We will be looking at where we do the training. Those decisions have not all been made at this time. But we will be using the Bolger Academy as one of the places where we do our career counseling.

Training is a very important part of our business. We need a lot of training in order to change the culture in the Postal Service. Now training is not the only thing that will do that. Actions by all people are going to help influence that. But we are not backing off on the kinds of training and the amount of training that we are doing.

Mrs. MORELLA. You think that would be important. I am pleased to hear that response and the fact also that the William Bolger Management Academy is not in any kind of jeopardy, because it is needed.

I notice that nonbargaining unit employees are being offered this 6-months lump sum in one lump-sum payment on January 4, 1993, but the bargaining unit employees will get the 6-months lump sum in two parts; half will be this October 30, and the other half on January 4. I just wondered, is there a reason why these two groups are being treated differently? Does it have to do with a tax advantage?

Mr. RUNYON. Those decisions are the result of negotiations with the persons who represent those people, and there was a difference of opinion on their part as to the way they wanted to do it. It made absolutely no difference to us how we did that.

The fact is that by having these payments take place in January actually saves money for the Postal Service, because the amount of interest that is available on that money still in the hands of the Postal Service is of benefit to the Postal Service. We were prepared to pay them immediately, the representatives of those groups of people came to different conclusions. But that is not a decision that we really had an interest in, other than to do what the employees wanted to do.

Mrs. MORELLA. I understand.

My next question: It has been brought to my attention that the executive and administrative schedule employees—the EAS employees are undergoing performance evaluations as the Postal Service is implementing a 38-percent reduction in personnel. EAS employees may eventually compete with lower-level employees for the remaining positions. Therefore, rating an employee higher than their own rating might well go against the EAS employee's interests.

On the other hand, supervisors who are secure in their positions may inflate the ratings for their employees in order not to lose staff. Since appraisals are not subject to grievance procedures, the scenario has a possibility that it could occur. EAS employees are affected by these practices when applying for external positions as well since most Federal agencies do use the performance appraisals in ranking job applicants.

This was a scenario suggested to me by some constituents, and I think it is worth getting your comment on, Mr. Postmaster General.

Mr. RUNYON. First I should comment that our appraisal system and evaluation system in the Postal Service is also broken. I don't think that we do a very good job in those appraisals, and I have asked that we improve that system, and that is the reason that you are getting some of these comments.

I think that appraisals should be done more often than we do them now. I have found that some employees have not had any for 1 or 2 years, and as I went to look at them to evaluate people from my own standpoint, the people that I needed to consider, evaluations they weren't there.

So I think that it is a system that needs to be improved, and we will be doing that. It is not something we are doing right this minute because we are doing other things first, but that system needs to be improved.

Mrs. MORELLA. Could you get somebody on your staff to give me a response in writing to that?

Mr. RUNYON. Yes, I will.

Mrs. MORELLA. That would ameliorate any fears or concerns that individuals would have.

Mr. RUNYON. I will submit that for the record.
Mrs. MORELLA. Thank you.
[The information follows:]

EVALUATION OF EAS EMPLOYEES In September 1992, hundreds of Headquarters Executive and Administrative Schedule (EAS) employees were evaluated on the basis of their fiscal year 1992 performance. The managers making the evaluations used EAS performance measurement procedures similar to those used in the past. While the evaluation process is not subject to grievance/arbitration procedures, employees who believe that the final overall rating is not an accurate reflection of their performance may request a review by their managers' supervisor.

The Postal Service knows of no instances of managers inflating evaluations of current employees in order to increase their competitiveness for positions in the new structure or for other Federal Government jobs. Moreover, in selecting an employee for a post in the downsized organization, that individual's merit ratings for a single year was, at best, only one of many factors considered.

Mrs. MORELLA. You mentioned in your statement that the Postal Service has contracted with Lee Hecht Harrison. I just wonder how much it is costing for that, and how long do you think this contract should go on, will go on?

Mr. RUNYON. I will submit the cost for the record, because I am not familiar with the details of that.

[The information follows:)

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