Originally Broadcast August 18, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business.

The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about The Center by visiting us on the web at businessofgovernment.org.

And now, The Business of Government Hour.

Mr. Morales: Good morning. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

Today, a commercially and financially viable Postal Service remains vital to the American economy. As technology, commerce, and society evolve, so too must government and corporate business models. This is as true for the U.S. Postal Service as for any other enterprise. As one of the nation's largest employers, the Postal Service is ultimately dependent upon the quality and commitment of its employees to meet its objectives. They are the heart of its brand. Yet, significant shifts are occurring in the workplace, and as a result, the Postal Service is redoubling its efforts to attract and retain high-quality employees.

With us this morning to discuss the strategic human capital efforts of his organization is our special guest, Tony Vegliante, chief human resource officer and executive vice president at the U.S Postal Service.

Good morning, Tony.

Mr. Vegliante: Good morning.

Mr. Morales: Also joining us in our conversation is Bill Takis, IBM's U.S. Postal Service industry leader.

Good morning, Bill.

Mr. Takis: Good morning, Al.

Mr. Morales: Tony, let's start off by learning a little bit more about your organization. There's no doubt that most of our listeners are very familiar with the U.S. Postal Service, but can you give us an overview of its history and its evolution?

Mr. Vegliante: Yes, I can. Well, obviously everyone knows that the Postal Service started with the beginning of the country, but what I'd like to focus on this morning is to talk about the last three major changes in the history of the Postal Service, the dynamic things that have happened as a result of legislative change. So let me go back to prior to 1971.

The Postal Service, you would look at the Postal Service as a federal agency. It had appropriations. It was a monopoly. It was similar to a lot of other agencies, very bureaucratic in nature. We had some service requirements, but basically we maintained our universal service obligation.

In 1971, the Postal Service had legislative change. We went from an appropriated agency to a breakeven situation. We still had the monopoly, but there was a turn from the traditional federal bureaucracy to a business-like entity. Service became much more critical to the Postal Service. We had a measurement system in place, and that evolved over time through this period to become very comprehensive, and we still maintained our universal service obligation.

Recently, we had some more legislative change, which will and has significant impact on the Postal Service. You know, we're now allowed to have part of our business competitive, so we'll have a profit mentality versus our breakeven mentality. We're no longer completely a monopoly; we'll be a competitive environment. You'll go from that business-like running the Postal Service to more of an entrepreneurial need, or an entrepreneurial leadership, to take advantage of some of the benefits that we got through the new law in the competitive area. There's going to be a lot more accountability in our future than there has been in our past due to the pass of this recent legislation. We will have a regulator, and there's going to be a lot of accountability built into the new system. Throughout all this dynamic change, we've maintained that universal service obligation to all the citizens of the United States.

Mr. Morales: Tony, that term of "universal service" begins to paint a picture of a general scale of the operations, but can you clarify that for us a bit more? Can you give us a sense of the size of the Postal Service, the overall budget, the number of full-time employees and contractors that you use?

Mr. Vegliante: Sure. I mean, just to get a sense of the Postal Service, in any community in the United States, you go downtown and there's a post office. You know, we have over 38,000 facilities. We have the largest fleet for delivery and transportation. We have a combination of career employees, non-career employees, contractors. Over 800,000 people are employed with the Postal Service. And we like to say we deliver everywhere every day. Regardless of what part of the country, we make service available to everyone in the United States, both in the continental 48 and all the territories and states outside of the continental 48.

Mr. Takis: Thank you, Tony. I appreciate that overview of the size and scope of the Postal Service and the overall organization, but now, could you turn your attention to tell us a little bit more about your specific role within the Postal Service, and particularly your duties and responsibilities as the chief human resources officer and executive vice president?

Mr. Vegliante: Well, as the chief human resources officer, I'm responsible for all the human resources functions in the Postal Service. That includes our labor relations; that includes our employee relations activities. It also includes our diversity EEO training and development activities. So I have my department broken up along those lines: Labor relations is one group, employee relations -- or we call it employee resource management -- is the second group, and my third group is development and diversity. Also, as executive vice president, I'm a member of the Executive Committee for the Postal Service, so I also deal with issues other than human resources issues.

Mr. Takis: Again, given the operations of the Postal Service and the vast scale and scope and number of employees, those responsibilities certainly pose a lot of challenges, I'm sure. But what would you say -- when you look at your responsibilities and duties, what are those most important challenges -- maybe the top three challenges that you face, and what are you doing about those? How do you go about addressing those?

Mr. Vegliante: The three most significant things that I see happening: I think what's very important is information and data usage technology and automation in our function. We're in the middle of implementing the largest human capital enterprise system in the world. Our shared services center handles all the personnel actions for almost 800,000 employees. That's up and running in Greensboro, and we're about halfway through the process of implementing that. That is very critical to get our systems -- to get our availability of data to all our managers and employees to be able to use it. And eventually, we want to get to a self-service status for human resources offerings.

So whether it's management self-service, what a manager needs from human resources to do his job, he should be able to have that at his fingertips on a computer through self-service; or whether it's an employee who has personnel actions -- whether it's retirement, whether it's health benefit changes, or any of the other changes that come as a result of employment -- we want employees to have that at their fingertips online and have it in a self-service mode. So that's the first thrust.

I think the second thrust in an organization as large as the Postal Service and as labor-intensive is to focus on employees, and a lot of that focus has to do with educating employees. They need to understand what the future is all about. You need to work very diligently with our unions and management organizations to bring on some of the changes that I talked about earlier. I'd say over the last five or six years, we've had a very good run working with our management organizations and unions. We've made some major changes. We were able to resolve all our collective bargaining agreements. We were also able to work with our management organizations to implement a new pay-for-performance and evaluation system. So that's very critical to bring the workforce along with the corporation. As things change, they need to be attuned to it.

We need to change our systems and processes so it only enhances the changes, so we have to get the synergy of the whole organization. We've got to get our employees to understand, to learn what the changes are about, learn how they can contribute, learn the impact to them, so they understand what's going on, they have a say, they have a voice, they have an avenue. But also, what I find most important is be able to educate employees about the future so they could start learning to make decisions now or preparing themselves for decisions for the future, so they'll be able to make the right decisions so they can continue in a successful career. And we're very happy with our workforce, and we want that workforce to stay with us.

Mr. Morales: Now, Tony, you started with the Postal Service back in 1978, I believe. Could you describe for our listeners your career path? And what attracted you to the Postal Service?

Mr. Vegliante: I started in 1978 as a career employee. I'd worked as a temporary, a non-career employee, since 1973. Then I got a job as a teacher for a short period of time; I was laid off. And my father had been a career postal employee. He said to me -- after I had sat around the house for one summer, he said to me -- I think that they're hiring at the Postal Service. I heard the discussion and maybe you should do that for a while while you're trying to figure out what you want to do as your next career move. So I said, okay, Dad. I went down and I took the test and I scored and I was hired by the Postal Service.

At that time, we had LSM, letter sorting machines. They were a mechanized sorting machine. I became an LSM operator. It's a sad social comment, but my first year in the Postal Service, I made almost 2-1/2 times I made as a teacher because I worked a lot of overtime. So at that point, I said maybe this is a lot brighter future economically for me than my chosen path as being a high school teacher and an athletic coach, what I was doing at that time.

So I stayed with the Postal Service for a few years as a bargaining unit employee. I actually served a period of time as a union official and steward where I started with in New Haven. I had educational background, so I applied for and was promoted into a training and development assignment in New Haven, and then I kind of migrated towards labor relations and human resources. And I moved through the organization in what at that time was the Northeast region. And over a period of about six to eight years, I went from the local level to -- at that time, we had districts -- to the district level, and then later on in that period I worked at the regional level. And most of that time I spent in labor relations and human resources. However, I did have some assignments and details in other facets of the business.

And then from the Northeast region, I was there for about a year and a half and I got promoted to Headquarters Labor Relations as a Postal Service career executive. And I stayed there from '88 through '96, and I had about three or four different positions in labor relations: basically contract administration, grievance and arbitration, and negotiation throughout that period.

And then in '96, I had an opportunity to go to Baltimore, Maryland, as the district manager for the Baltimore District. I was there from '96 through '99 on the operational side, general management position. Then in 1999, I moved. I got promoted to vice president of labor relations, and I was in that position for a number of years. And then two years ago, I was promoted to the Chief Human Resources Officer.

Mr. Morales: Well, that's certainly a broad set of experiences, so I'm curious, how have these experiences prepared you for your current leadership role, and how has it shaped your management approach and your leadership style?

Mr. Vegliante: Just don't have one perspective. You have a perspective as a bargaining unit employee, as a frontline manager, as a mid-level manager, and then as an executive both in human resources and in operations. I believe I've been able to use all those experiences to temper my decision-making. It's not just a one-sided decision. I can look at it from a district manager's position or an operations position, customer service position, understand what impacts them and try to understand what I'm doing -- how does that impact them and what's the best way to do it?

So it gives you both the depth and the breadth of the organization, and you put that into your decision-making process. The Postal Service, every decision impacts a lot of our operations and a lot of our people, and you've got to take it all into consideration.

And one of our philosophies is we don't want to create distractions for our employees, for our managers. You don't want to create chaos in this type of system that we have, because it's a flow of mail through a building into delivery, and you've got to keep everything flowing. You don't want to just go out and create distractions that have no value, so you have to really focus on your decision-making to make sure that you don't do that.

Mr. Morales: Good, thank you.

What is the U.S. Postal Service's human resource strategy?

We will ask Tony Vegliante, chief human resource officer and executive vice president at the United States Postal Service, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Tony Vegliante, chief human resource officer and executive vice president at the United States Postal Service.

Also joining us in our conversation is Bill Takis, IBM's U.S. Postal Service industry leader.

Tony, would you elaborate on the U.S. Postal Service's 2006-2010 strategic transformation plan? How does it build on the foundations set by the Postal Transformation Plan of 2002 and continue the transition from an internally focused workplace culture to one focused squarely on postal customers and business results?

Mr. Vegliante: Well, when you look at the strategic transformation plan, it's our plan for the next four years. We've laid out our strategy for the future. And in this process, we let all the constituents in the Postal Service have input into the process and become familiar with it, so we try to look at the future through eyes of many different people, our internal constituents as well as external constituency. You take the whole gamut of ideas and whatnot, and then you lay out your plan for the future to make the transformation from where we are today to where we believe we need to be in the future.

And we're very focused on the customers and business results, but we need to do better at it and we need to bring the culture along when you make that type of change. To take an organization and to change the measurements and to highlight customers, you can do that, but you need to bring everybody else along to be successful. What are the business outcomes that we need to achieve to be successful, and how do we treat our customers as the best customers in the world? We want them to keep coming back. We need to talk to them. We need to get information from them to make sure that our services and products are what they need and what they want. So the transformation plan helps us lay that out. It's broken into segments that we know we need to go after in our strategic transformation to make the desired changes to get us to this end result.

Mr. Morales: Now, could you elaborate a bit more on the Postal Service's efforts to develop its customer-focused approach? To what extent do programs such as the Postal Ambassadors Program and the Customer Connect for Carriers program enable this shift?

Mr. Vegliante: As I said before, it's very important that we become customer-focused. Now, we use the term "employee engagement." And when we talk about employee engagement, we talk about engaging our employees with our customers and with our business results. So the Postal Ambassadors Program, the Customer Connect Program, are just two of the efforts that we tried to implement to engage our employees in those strategies, and we've been successful in doing that.

Our Business Connect, which is another program that we have with our postmasters, and they connect with businesses in their communities to get to that customer focus, to get the right business results. It's a very important strategy is to engage our employees in these initiatives.

Mr. Takis: I know back in 2002 that the Postal Service designed and implemented a Pay-for-Performance Program. You talked a little bit about that a few moments ago. Could you elaborate a little bit more on that effort and where it stands right now? And in particular, how does it encourage that culture you're talking about, performance within the Postal Service?

Mr. Vegliante: In 2002, I was part of the team that developed and implemented the Pay-for-Performance Program. And just a little bit of our history. You know, traditionally, we had the federal pay system, we had step increases, cost of living adjustments, base salary increases. Then the Postal Service evolved in the '90s to an economic value-added. You measured the value added in any given year, and that determined the incentives that you paid your employees.

2001/2002, we wanted to reach farther into the organization, and we wanted to get a system that rewarded people more for their impact on the organization. So we looked at a corporate performance -- that's all employees -- we took it down to the next level, which is the team or unit level -- to the number of employees that work in one facility or one type of operation. There's measured results on the outcome of that operation. And then we added another level, which is the individual's performance. So we looked at specifically how does the individual impact the organization? How should he be measured for his reward or his pay increases?

And so we have this overarching five criteria -- customer services, business, employee, cost, and revenue -- five criteria that then cascade down through the various measurements. What's different about this is people now better know how they can influence the outcome of both their personal compensation, but also their contribution to the Postal Service.

The results speak for themselves. We've had continuous improvement in productivity and service. We've recently had some all-time service scores we're very proud of. I think it's added a lot to the focus. It's added a lot to getting all employees on one team going for those right business results that we talked before. We're very proud of it. We think it worked very well. It was well-accepted by employees.

Originally, we worked through the management organizations. They were part of the team that developed it, so it was a collaborative effort to come up with this. I think the Postal Service is doing better, and the individuals are doing better as a result of this pay-for-performance system.

Mr. Takis: Could you tell us a little bit more about how you developed and implemented your current performance measurement system? And in particular, could you tell us a little bit about the National Performance Assessment and how you do that?

Mr. Vegliante: It's a pay-for-performance system. What the National Performance Assessment is -- that's just an information system that feeds all the data on all the measured objectives into one system. So what the National Performance Assessment, or we call NPA, does is it's an ongoing report of results, where you stand on any particular given that's how we measure a year. Not every indicator, but most indicators you could look at on a weekly or a biweekly basis to see where you stand, how you're performing, and then you can better understand what you need to do to perform -- where your strengths and weaknesses are. So the National Performance Assessment, the NPA, is very important, because that's our communication to our management team on how you're doing, what's going on, and that creates a focus.

The overall pay-for-performance, as I said, consists of those three parts. And as I said, we developed in collaboration with our management organization -- the League of Postmasters, the National Postmasters Association of the United States, and the National Association of Postal Supervisors -- we got together in collaboration and we worked through this entire process. It's a weighted scorecard, balanced scorecard by items. It's just worked very well.

We have a performance assessment system that goes along with it that measures the performance and puts all the criteria in place that a manager needs to utilize to manage the performance of his employees on a periodic basis. And we require certain things to happen at certain times of the year to make sure that there's this dialogue about performance that's always happening between managers and supervisors.

Mr. Takis: Tony, I'd like to step back a little bit now and talk a little bit about an overview of the Postal Service's overall human capital strategy, and how does that strategy align with your overall organization's missions and goals and organizational objectives that you talked about before?

Mr. Vegliante: You know, just in simple language, what we like to say our strategy is to add value to the organization and to the employees within the organization. And what do I mean by that? We want to get the best product available to our customers, which we consider both the postal management and our employees.

Another part of our strategy is we want to become one of the best places to work. We want to look at recruitment and retention. We want to look at the package that we offer to our employees. We want to do the right things, because our strength is our employees. So we have very good employees. We want to make it a good place to work. We want to keep those employees. We want to retain our employees. We want to recruit good employees, and we want to maximize their potential within the organization. And we spend a lot of time and effort on succession planning and development and things like that so we can do that.

But it's more than just that. It's all our employees. It's our bargaining unit employees. You know, we have a good, strong employee engagement on safety and health for our employees. We have a lot of projects, like an ergonomic project and an OSHA-type project to make the workplace a better place to work, a safer place to work. So we focus on making the Postal Service a good place to work, as well as adding value to the overall organization. So in very simple terms, those are the things that we look at.

Mr. Morales: Tony, I want to take you back to one of the key challenges that you referenced in our last segment, around the enterprise systems. One HR vision underscores the need to transition human resources from a paper-based set of work processes to a paperless web-enabled set of processes. How does the human capital enterprise system factor into this effort, and what are the benefits of this system?

Mr. Vegliante: Well, the human capital enterprise system, that takes an architecture of our infrastructure in human resources, and we now have one. We used to have 49 legacy systems running in the human resources department. We've cut that in half. Our plan is next year to cut it in half again. And hopefully, eventually, we can just get to one infrastructure that shares data and information.

Some of the other benefits of that system is it starts the effort to go paperless. So right now, every employee in the Postal Service has their own personnel file, and that's a paper document. It's a folder in a personnel office -- all over the country. We're beginning the process to take all that personnel information and put it on an electronic format and stop the paper processes. That's one example of how we can go from paper to a web-enabled process.

The other part of it is a lot of our forms -- a lot of the things, we're re-engineering our processes. It's all going online, our promotional processes, our hiring processes, our job bidding processes, our benefits selection processes. That was all paper at one time. Now that's moved, so it's all online. And we keep moving through this process and we keep finding opportunities to streamline.

As I said earlier, we're on phase one. We'll have two more phases that'll deal with other human resources functions. But each phase and each function gives us another opportunity to get away from paper and to get into a web-enabled process.

Mr. Morales: Tony, it strikes me that in an organization such as the Postal Service, development is critical to employees' success throughout all levels. Could you elaborate on the Strategic Training Initiative, and how does this program align training with the organization's goal-setting process and serve as a focal point for setting training priorities?

Mr. Vegliante: The Strategic Training Initiative is a process that we put in place. So we have a committee that looks at all the training that's proffered for the next business year. And then that training has to meet certain criteria to become part of our Strategic Training Initiative: it has to align with the goals, it has to have a business need, or it has to have a legal requirement.

So we take a focus through training -- point it in the next year towards what we need to accomplish, whether it's business results, employee results, or some things that we're legally required to do. So the Strategic Training Initiative is just another way to create focus amongst the very diverse and large workforce so we can get everybody on the same sheet of music, everybody focused on the right thing. So it's been very helpful for us.

It creates that once a year, you have to step back and say, okay, what's important next year and how are we going to accomplish it, and what training objectives do we need to put in place to make those things happen?

Mr. Morales: That's great.

What about the U.S. Postal Service's workforce planning efforts? We will ask Tony Vegliante, chief human resource officer and executive vice president at the U.S. Postal Service, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Tony Vegliante, chief human resource officer at the U.S. Postal Service.

Also joining us in our conversation is Bill Takis, IBM's U.S. Postal Service industry leader.

Tony, recognizing the importance of identifying talent and improving employee skills, could you outline the key U.S. Postal Service recruitment efforts for today? To what extent do such programs as the Management Intern and the Professional Specialist Training programs assist you in your recruiting efforts? And could you tell us a little bit about the Postal Service's implementation of an e-recruitment application?

Mr. Vegliante: Sure. Let me start with our recruitment efforts. Recently what we've done in our employee resource management areas, we created a group dedicated to just recruitment. So we're looking at preparing ourselves for the future. And when I say "the future," I mean the near future, because talent is going to become a commodity that's harder to come by in the future. You know, we've dedicated a number of people within a department now that we've never had before, and we're going to put a really strong presence out in the private sector recruiting people with the skills that we need. And we're also going to retool how we recruit all our employees.

We understand what the future of recruitment and talent is. We understand that some of the recruitment agencies will tell you about the talent war of the future. We look at it as the talent opportunity in the future, and there's a lot of things that we haven't done in the past that we are now going to do. And we feel very comfortable that we're going to be at the right place to be able to get the right people to help the Postal Service be successful. So that was one of the things that we've done recently.

The programs such as Management Intern or Professional Specialist Trainee programs are very good programs that we have within the Postal Service where we could reach out to people who meet certain criteria, put them in a learning situation for two years where they can develop into either mid-level managers or technical staff jobs -- it's a way to build your bench for the future in the areas that you feel do not have enough people in place. So you look at what the future and the demographics say over the next five or six years. The Baby Booming generation's going to be leaving the workforce, and you're going to have to be ready for that because you've going to have a lot of people leaving critical positions and skilled positions. You've got to get people ready. This is one of our strategies along with our recruitment and along with our internal development processes that let us build our bench and plan for the future.

Mr. Morales: Now, along the same lines, workforce planning is critical to future success, and will contribute to the greater flexibility and efficiency at the Postal Service. Could you outline your workforce planning efforts? How are you reducing redundancies and overlaps of responsibility to better align with your business goals?

Mr. Vegliante: Workforce planning is very critical to the Postal Service. I have a department that works directly for me that works intimately with human resources and operations in our overall workforce planning. And we've started within the last year and a half, we're taking the planning process through our areas, our regions, and we're taking it down to the districts and down to the post offices and operational units.

But we have a very elaborate online system. We have a lot of information, a lot of web technology, which allows not only people to do immediate planning, but it also allows them to plan for the future. There's a lot of ability to take the business assumptions today, put them in the planning model, and see what your staffing needs are going to be a year from now or two years from now. And farther out, we're comfortable with all the impacts. It allows us to take our capital investments that impact our workforce and plan for the future, and how that investment is going to impact our employees.

And it gives us plenty of lead time to do various things to lessen that impact and allow us to be successful in the implementation of whatever that investment is. So it definitely has helped in our efficiency and our productivity.

We have a number of opportunities to become more flexible with our labor contracts. We're spending a lot of time and effort to educate people on what they should and shouldn't be doing, and how to maximize that flexibility to improve our postal operations. So it's an ongoing process. It's at every level of the organization. We're educating, and we're supplying not only data, but we're supplying data and tools to better influence outcomes that we need.

Mr. Takis: Certainly the Postal Service's ability to address those future challenges hinges on the establishment of a very strong leadership continuum. Could you talk to us a little bit more about your efforts in that area; in particular, the corporate succession planning, the leadership development process that you all use, and executive development continuum? How do these efforts intersect and how do they work together with each other?

Mr. Vegliante: This is very critical to the future of the Postal Service. And when we created the new Diversity and Development Department, that was the first thing that we focused on is how do we take all of these developmental processes and opportunities and align them into one structure so an employee can see how he moves throughout his career, what are his opportunities? And we can see what we need to make sure it gets put in place so that employee is developed. So you have corporate succession planning, which is a process we go through every two years. And we look at all the executives and all the officers in the organization, and we do planning on developing people for those replacements.

EAS leadership development is the next level down, mid-level management. We're starting to do the similar to what we do with executives with the next level in the organization of managers. What I like to say is we recognize that we have talented people. We have people that are very good performers, they're top performers. We'll compare our employees with anybody's. But our task, management's job, is to reach down into the organization much earlier in a person's career, identify their strengths, their weaknesses, their competencies, and point them in the direction that they'll be most successful for themselves and for the organization. And that's what we're starting to do with our EAS leadership.

The executive development continuum is basically our outline how a manager moves into the executive ranks and moves through the organizations. If you can picture a pyramid, the bottom of the pyramid would be all new executives, and then we have developmental steps up the pyramid. It's based on performance and it's based on skill need. It starts with the entire group, and based on performance, it gets a little bit more narrow.

As the responsibility and accountability for the higher level jobs becomes -- you move up this pyramid, but it's laid out for everyone. It starts right at the beginning of your executive career, and it walks you through the rest of your executive career and these are all your opportunities. These are the training that we're going to offer, that we're going to insist that our employees have to be ready to take on challenges in the future. But it's also what I call your roadmap for success. You know, you can do these things and you can -- coupled with your performance, which is key, succession planning and all these developmental programs, that's going to move you through the organization to positions of greater responsibility and authority.

So we're lining it all up. We want one vision for our employees so they can become -- whether it's an executive or a manager -- they understand the path through the organization throughout their career, what they need to do to get promoted, with a strong emphasis on performance.

Mr. Takis: Well, certainly having an engaged workforce, which you're describing right there, is critical to the overall continued organizational success of the Postal Service. And I know that you continue to track workplace concerns by asking career employees to complete the Voice of the Employee Survey. Could you talk to us a little bit more about that Voice of the Employee Survey, and in particular, could you highlight some of the recent results and how you validate those results and how they're used?

Mr. Vegliante: Voice of the Employee Survey, or what we call our VOE Survey, that's one of our corporate measures in our performance system, and we measure our units on that survey. And basically the survey looks at a number of workplace criteria situations and it asks our employees how they would measure their workplace. So whether it's headquarters or a region or an area or a post office or a district, we have this process that reaches out to our employees. They can give us their feedback on how they feel about all these various workplace-related issues.

The survey has a very good response rate, which is in the sixties, which I think is on the high end of most surveys. And then we have an index, which is your actual score rated on a very good/good type of rating, projective rating. That's a little bit higher, that part of our survey.

So we have had a lot of good results. We've had the survey in place for quite a while. What we're going to be doing is looking at the survey to see what changes do we need to put in the future. We want to look at best practices from other organizations, but we've come a long way on this survey. It tells us questions about the workplace, about how employees are treated, about the information employees get. It talks about customers, value. It talks about the things that we think are critical to the organization, and it's another tool to allow employees to give us feedback.

Mr. Morales: And your feed this information back to the employees, the results?

Mr. Vegliante: And the results are published quarterly. Yes, we feed it back to the entire organization.

Mr. Takis: I know that one of the greatest investments that the Postal Service can make for its employees is maintaining a safe work environment. I know that the Postal Service takes that very, very seriously. Could you talk to us a little bit about your efforts to make the Postal Service a safer place to work? And in particular, to what extent do the things that you talked about before, like the ergonomic risk reduction process and the Voluntary Protection Program, enable you to be successful in this area?

Mr. Vegliante: Well, I think the most important thing I could say about our safety process is our evolution in the safety area. I mean, I think everyone in the Postal Service recognizes it's not an us against them. It's not management against employees. It's both groups working to make it a safe place. Just simply said, our employees come to work healthy. We want them to go home healthy. Okay? They have families. They have outside interests. We don't want to see that impacted or impaired by a workplace injury.

So I think, as I talked earlier about employee engagement, we thought it was very important, very important, for our safety strategy, but for our overall employee strategy, to engage our employees in this area. So the ergonomic risk reduction process and the Voluntary Protection Program allowed us to create employee engagement in the workplace related to safety and health. So these are very, very good programs, OSHA-sponsored programs.

We have dedicated resources working on this. We measure it. We have goals based on the Voluntary Protection Program. We have more sites than anyone else in the country in the Voluntary Protection Program. This past year, we've passed all the other businesses that are in the program, so we have the most sites. We've done just an outstanding job. And it's not a management job or a safety or a human resources job. It's the Postal Service. It's our employees, our unions working with OSHA to make the Postal Service a better and safe place to work.

Mr. Morales: Tony, this theme of engaging employees has clearly produced some very, very positive results for the Postal Service. Could you outline your efforts in this regard to reduce the number of workplace disputes?

Mr. Vegliante: I think it's important to realize, if you're going to engage your employees, you're not going to engage an employee who has a dispute. You need to deal with the atmosphere and the environment in the workplace, and part of that is employee disputes. And what do employees want? They want their dispute handled, they want it timely, and they want an answer. And that's where our focus has been.

And you could go to a number of areas within the Postal Service -- whether it's our grievance process, our EEO process, or any of our appeals processes -- and what we've done in the last four or five years is really focused, worked jointly with our unions on the grievance part. We've significantly reduced workplace disputes, probably from a high of over 100,000 pending grievances down to less than 30,000 grievances. And that's a joint effort by both management and labor to make that happen, to address those disputes, and to keep things moving along and addressing employees' concerns.

Let me reiterate. The worst thing you can have is an employee on the workroom floor who doesn't get their particular dispute addressed.

I think the other area is we've stepped into the mediation forum. We have a REDRESS program, which is -- Resolve Employment Disputes and Reach Equitable Solutions Swiftly are the words to that acronym. But basically it's a mediation program that we put in place a number of years ago that is another avenue to resolve disputes. We also have mediation processes in our internal dispute resolution processes. So we focus on not fighting the employee, but resolving the dispute. We want to resolve it as early as possible. Once again, we want to keep the focus on the customer and business results, and we don't want to create distractions by having all these disputes in our system and not being addressed. So that's very important. If you want to get your employees engaged, it's going to cost you the time and effort to resolve their disputes and improve the environment.

Mr. Morales: That's fantastic advice.

Earlier, we talked a little bit about the Baby Boomer generation, but nowadays, younger employees are having different attitudes, behaviors, and expectations for their careers and the workplace. Overall, they tend to be more flexible and likely to move, and therefore, are expected to change employers and jobs several times during their career. They're also looking for more flexibility from employers, and greater support in the workplace.

Could you elaborate on the Postal Service's efforts to meet the challenges of this younger generation, and a changing workforce?

Mr. Vegliante: You know, one thing we recognize, and we have a lot of discussion on this, is the workforce of the future is going to be different. There isn't an expectation to have one employer for a 30- or 35-year career. There isn't the same expectation on benefits and retirement. There's a different expectation on mobility for an individual. We're learning that we can't expect what we got in the past, to get that in the future, so you're going to have to adjust your expectations. And then, hopefully, you could take this as an opportunity to create some ways to retain and recruit people.

In the Postal Service, there's a lot of different jobs. You have finance, you have IT, you have human resources, you have operations, you have government relations, you have the law department. I mean, you have a very broad scope of jobs. People want change, they want differences. And part of our retention and recruitment philosophy is that you come into the Postal Service, you're not wedded to that position when you come into the Postal Service. You have all these opportunities, there's training programs. There's opportunities to move in different functions and take on different roles within the organization. So I think that's a strength that we can elaborate on in the future.

The second part of that is the mobility. Anywhere they want to go in the United States, we're there, so we could meet a lot of needs of people if they want to move, and we're more than happy to do that. That's very healthy in our organization for people to move from different parts of the country and work in different operations.

So we recognize the difference. We know we have to retool our strategies to deal with it. But if you take the strengths in what we offer as an organization and build that into part of your retention and recruitment process, I think we're going to have answers that people didn't expect. And before you know it, they may stick around for 30 years, like I did.

Mr. Morales: What does the future hold for the U.S. Postal Service? We will ask Tony Vegliante, chief human resource officer and executive vice president at the U.S. Postal Service, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Tony Vegliante, chief human resource officer and executive vice president at the U.S. Postal Service.

Also joining us in our conversation is Bill Takis, IBM's U.S. Postal Service industry leader.

Tony, could you elaborate on your strategy to create and cultivate a culture of excellence and performance within the Postal Service?

Mr. Vegliante: As I talked about earlier, a lot of our strategy deals with our people. I've continually talked about performance, and we're trying to build performance and excellence into everything we do, and it's really important that you build it in your people processes. Now, one of the things that we did in our pay-for-performance is we eliminated a finish line mentality. And what I mean by "a finish line mentality" is if you set a goal at a certain rate, once that rate is met, you've met the goal and the game is kind of over.

What we've gone to is a continuous improvement. So if you meet the goal, the game's not over. You can continue improving and being rewarded for it. So as people come in and work through their careers in the Postal Service, a lot of these things are going to be emphasized, have been emphasized, and will be emphasized stronger. But to me, the strategy is through your people. It's through their performance.

And let me just say this about our employees: we have one of the best groups of employees, but they're very proud in the job that they do for the American public, for the United States. They just do an outstanding job. I think it's recognized in every community. So that just shows you that our employees want to be excellent, and they want to perform and they want to perform for everyone, and they've done a great job. So it's inherent in our company. We've just got to find ways to refine it and bring it out. And I think a critical part of that strategy is to do it through our people processes.

Mr. Morales: So Tony, as you sort of look down the road, and we talked a lot about the changing demographics of the workforce and the needs of this new generation, how do you envision the Postal Service's human capital needs evolving over the next three to five years? But more importantly, how do you envision your office evolving to meet these changes?

Mr. Vegliante: I see the Postal Service human capital needs evolving in a number of ways. We're going to still need a large number of employees. We're still going to deliver and process and transport mail. But as we've talked earlier, the focus is going to continue on our customer and our performance to our customer. So we're going to look at our human capital needs and we're going to start building that end much earlier in the process, and we're going to look for people that have the competencies and are compatible to that philosophy. It's very important to match your workforce to what your customer needs are, and we're looking for people who can be compatible with that and will do that.

My office -- I think we've started the recruitment office. The talent management is very critical. We're starting our journey into the next generation after the Baby Boomers, getting prepared for that. We're going to be changing some of our organization. Our design won't change, but our focus is going to be on talent management. It's going to be on our people, and we're going to find best ways to do that. We'll be adjusting as we are today and we'll adjust in the future on a lot of the things that we do that will make us successful there.

So we see an evolution, and we're involved in the evolution. Right now, we're doing a number of things along with human capital enterprise, online recruitment, online hiring, a lot of web-based processes as well creating organizations to focus on that need in the future within human resources.

So we've started the journey, so to speak, and we need to continue it. But every day I guess a new part of the journey lays out for you. What do we need to do next and what's critical? We have to focus on a lot of skilled positions, like our IT, our accounting, safety and health. There's a lot of required skills within the Postal Service. And we're learning how to do that and we're doing it better and better. And I just think it's, like you said, it's an evolutionary process and we're going to be building and working towards that over the next three to five years.

Mr. Takis: I know that Computer World magazine recently placed the Postal Service on its list of the top 2006 top 100 places to work for IT professionals. And given such wonderful recognition, could you tell us a little bit about what emerging technologies that you see that hold the most promise for improving the management of human resources within the Postal Service? And in particular, how do you intend to sustain that recognition going forward?

Mr. Vegliante: As far as the emerging technologies, as I spoke earlier about our human capital enterprise project, we have that infrastructure put in place now, and that's an SAP infrastructure that we utilize, so we're looking at capitalizing on that. I think that technology is going to allow us to have all our human resources information in one infrastructure, and it's going to be easier to use that across functional lines. We're going to be able to get much greater participation in employee and management self-service. That's very critical for us. And I think a lot of the other opportunities that we have is just to automate processes. We'll have significant improvement in the time that it takes to perform processes that are critical to the Postal Service.

As you said, Computer World recognized the Postal Service. We have a great IT department in the Postal Service. There's so many opportunities in so many areas. There's a very diverse opportunity for employees in IT within all our functions. We're becoming a much more IT-savvy organization. So I just think we're going to sustain that recognition. And part of the way you're going to sustain it, it's going to become much more critical to the core business of the Postal Service, that type of IT skill, as well as all the administrative support function areas. That's where we're going. We're going to focus on better information, better use of data. I think that just -- it's going to be a tremendous opportunity for IT people in the future, and it's going to be an interesting and good place to work.

Mr. Morales: Tony, you earlier touched lightly on the potential retirement wave within the Postal Service. Given that approximately 68 percent of the current postal career executive service will be eligible to retire in 2010, what plans are in place to mitigate the potential shock?

Mr. Vegliante: The eligibility is based on meeting the criteria for either Civil Service or FERS, but our average employee works three years beyond that. So we're looking at a period of time, say, from this year to 2013. And in our planning process, I spoke about succession planning. I spoke about the implementation of moving that type of a process into the next level below in managers. We've identified -- we have a very comprehensive succession planning.

I mean, this executive core succession planning is done by the postmaster general. It's done by the top officer in the organization. He dedicates time over a two-week period every two years and just talks about all these people in their current positions and what their opportunities are for the future, what their strengths and weaknesses are in the future, how are we going to develop people. And then we earmark people for development in areas of opportunities that their managers think that they'll be able to perform in the future.

So we spend a lot of time doing that. We're reaching farther down in the organization, and we have a good pool, a good bench right now. But we know that you can't rest on your laurels, so we're looking for the bench behind the bench. And we want to build that bench up stronger, so two years from now as this bench depletes, we're going to be moving people into that bench and then backfilling them in behind. So it's an ongoing process.

You have to recognize employees are going to retire, employees are going to move on, so you need a solid group of people behind them. And it's our job to make sure they have the right experiences, the right educational opportunities and a good understanding of the organization, and that their leadership skills are honed so they could step into these positions.

Now, this is something we've been doing for a number of years. In a large organization like the Postal Service, the advantage you have is you have so many people working for you, and you have a great pool of people. It's management's job to go out and develop them to make sure they're ready. And we're really going into this area with eyes wide open, knowing what the challenges are and whatnot, but there's a lot of focus and dedication from the top of the house down not to find that we're short when it comes time to fill these vacancies. So we're going to have those benches built.

Mr. Morales: Great. Tony, at the top of the hour, you told us just a wonderful story of how you got started at the Postal Service and obviously you've had a very successful career. So what advice would you give to someone who perhaps is thinking about a career in public service, or perhaps is looking at the Postal Service?

Mr. Vegliante: Well, I think the best advice I can give someone is to take the opportunity. Come into an organization like the Postal Service. There's just a tremendous amount of opportunity. It has the disadvantages and advantages of being a large organization. I've learned so much and I've met so many people from across the country, and worked with such a diverse group of people, and it's made me develop, and it's helped me grow as a manager and a leader. And I'm not sure I would have got that anywhere else than what I've gotten at the Postal Service.

I spoke earlier about the pride in the Postal Service and the dedication of our employees. That's kind of unique to the Postal Service, and it's an organization you want to be a part of. It's a postal family, we call it. It just adds to your work experience to be in an environment like that.

But my father told me this when he talked me into taking the test for the Postal Service that summer when I was enjoying the beach more than work. He said, if you go to the Postal Service, you do your job, you'll have opportunities to get ahead if you want to get ahead. You'll have a good job if you don't want to get ahead and you just want to perform the job that you have. But it's all up to you. You're in it. You have an opportunity, and basically, you could make your choice to go as far as you want in the Postal Service, depending on your initiative and your energy.

So I look at it as it's a great place to work from that perspective. I think we just offer a lot. It's very comparable in a lot of areas: benefits, retirement. It's just great. It's just a great place to work and I'm proud of my career and being part of the Postal Service.

Mr. Morales: That's wonderful advice. Thank you very much. Unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule.

But, more importantly, Bill and I would like to thank you for your dedicated service to the Postal Service.

Mr. Vegliante: Let me just wrap up by saying thank you. I'm very happy that I had this opportunity to speak. And just for the listeners, if anybody wants to learn more about the Postal Service, about our products, about what we offer, you can go to usps.com, and you'll have an opportunity to look at a lot of different things that we offer and get a lot of information about the Postal Service.

So once again, let me thank everyone for giving me this opportunity.

Mr. Morales: Great. Thank you very much.

This has been The Business of Government Hour, featuring a conversation with Tony Vegliante, chief human resource officer and executive vice president at the United States Postal Service.

My co-host has been Bill Takis, IBM's Postal Service industry leader.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional support and respect.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

This has been The Business of Government Hour.

Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's businessofgovernment.org.