Postal Service Updates Its Transformation Plan

“The Strategic Transformation Plan 2006-2010, the Postal Service roadmap for the future, has been updated to reflect changes from last year’s passage of the Postal Act of 2006. The law makes a number of changes to postal oversight and regulation, but does not alter the Postal Service’s mission – providing trusted, affordable and universal service.”

Postal Service Updates its Transformation Plan to Reflect New Law and New Technologies A few highlights from the Transformation Plan: 

The Postal Service will focus on four critical human resources strategies — engaging employees, developing and managing talent, establishing and maintaining market-based compensation, and managing complement to assure flexibility.


Significant shifts in the workplace are being driven by changes in the environment, workforce, and operating requirements:

Sixty-eight percent of the current Postal Career Executive Service (PCES) will be eligible to retire by 2010. Retirement rates are similar for other critical management and professional staff. Over 240,000 craft employees are eligible to retire during the same timeframe. Recruitment, career development, and succession planning are key issues.

Younger employees have different attitudes, behaviors, and expectations for their careers and the workplace. Overall, they are more flexible and likely to move, and therefore are expected to change employers and jobs several times. They are also looking for more flexibility from employers and greater support at work.

As postal operations become more information-driven, the workplace will need to become more flexible to balance changing workload, evolving networks, productivity improvements, and the need to engage all employees in support of revenue generation activities.

Explore Benefit Options

The Postal Service will work with the Office of Personnel Management to explore the possibility of applying private sector best practices to the FEHBP program for current employees and the over 440,000 postal retirees and survivors receiving benefits. Options include having a single program provider for pharmaceuticals or mental health services, diverting high-cost cases to centers of excellence with lower costs and medical expertise, and expanding the number of coverage tiers. The Postal Service will continue to pursue the possibility for applying for the Medicare Part D (prescription drug) rebates for eligible retirees enrolled in FEHBP. Finally, the Postal Service will continue to explore alternatives to the current health benefits programs for future employees, including wellness programs.

Aggressively Manage Workers’ Compensation

The focus of the workers’ compensation program has been to ensure that postal employees receive the appropriate medical care for on-the-job-injuries while managing the associated cost. The First Health program has been successful in reducing medical costs through their medical network. This program has resulted in gain share payments and additional savings through cost avoidance. The Outplacement Rehabilitation Program has been successful as over 500 former employees have either been placed with a new employer, retired, or had a compensation reduction. Successes of these and other programs are tied to the close working relationship and common goals with the Department of Labor. The Postal Service will improve the First Health process to capture greater savings. The Postal Service is also exploring a prescription drug card program and is currently obtaining bids from major prescription drug networks to reduce costs.

Manage Employee Availability

Employee absences from work as a result of on- and off-the-job injuries and illnesses also represent a significant cost for the Postal Service. Employee absences from work will be managed by expanding the Resource Management system from a sick leave tracking system to a comprehensive tool to manage and increase employee availability. By the end of 2007, this comprehensive approach to resource management, which includes a national wellness program, will be measured by the percentage of employees available for duty.

Increase Flexibility

The Postal Service will continue to enhance and develop additional workforce planning and tracking tools. These tools will provide standardized data reports and modeling tools to meet the needs of field operations. Additionally, for individual operations within a facility, a wide-range of diagnostic tools will be developed to allow managers to assess the improvement potential of their operations through scheduling and staffing changes. Diagnostics will identify staffing/scheduling alternatives to address common problem situations (high overtime, stand-by time, frequent temporary schedule changes, etc.) and potential solutions. With both facility-wide and unit complement modeling with diagnostic tools, the Postal Service will have more accurate plans for determining current staffing and scheduling needs. This modeling effort will also provide the ability to plan for future opportunities to gain greater staffing flexibility and efficiency.

These efforts will analyze future needs and build needed scheduling flexibility into planning assumptions. By utilizing part-time and non-career employment opportunities, the Postal Service can ensure maximum flexibility and efficiency in operating alternatives. Since an evolving incremental approach to changes in the current network is anticipated, efforts will concentrate on managing the associated complement transitions to maintain productivities and service throughout the period of change. In this way individual operating unit performance will not suffer during the implementation of staffing adjustments.

The Postal Service has developed considerable field expertise planning for and achieving the overall complement numbers needed in an operation. Future efforts will concentrate on maintaining maximum flexibility in staffing alternatives and in managing the transition of complement to achieve maximum efficiency.


Engaging employees, managing current and future talent, developing market-based compensation, and aligning complement to customer needs are the right things to do. Changes in these areas will be needed in order for postal customers to benefit from the many opportunities identified in this Plan. Implementing change is difficult — no matter what the industry. While postal employees have a proud history of delivering quality service during adverse situations, changing the culture to be more customer- and business-focused will not happen overnight. The Postal Service and its 700,000 employees have a solid start and will continue to be proactive in preparing to meet the challenges and opportunities ahead.