In its latest cost-cutting move, the U.S. Postal Service has halted bonuses and other performance awards for managers and administrators, the agency's chief human resources officer confirmed in a Friday memo.
Effective immediately, USPS officials are barred from spending any money on cash awards, gift certificates, event tickets and other tokens of employee recognition, Tony Vegliante wrote in the memo. The "temporary policy change" will continue until further notice, Vegliante wrote, and will apply to all Executive Administrative Service and Postal Career Executive Service employees.
The move is expected save some $7 million for headquarters functions, USPS spokesman Mark Saunders said in an email.
Compensation for postal officers and executives under the agency's pay-for-performance program will also be frozen until further notice, Saunders said in a separate news release.
Although Vegliante's memo left unclear how much the Postal Service has spent thus far on employee awards in fiscal 2011, it said that gift certificates and American Express Gift Cheques purchased before Friday may still be used to recognize staff.
As the end of an "exceptionally challenging fiscal year" approaches, he wrote, "we must continue to identify opportunities to reduce spending where possible, and eliminate costs which are not deemed essential for the continuation of our operations."
The Postal Service is on track to lose more than $8 billion in fiscal 2011. Late last month, the agency indefinitely suspended its share of contributions into the Federal Employees Retirement System in another bid to conserve cash.
About 62,000 employees would have been eligible for the executive and administrative bonuses and other awards based on their work this year, Vegliante had earlier told Federal Times. In some cases, the payments were intended to boost compensation for employees who have reached the top of their pay grades and "to keep our jobs in line with the private sector," he said.
Clerks, mail handlers and other employees represented by unions will still receive budgeted awards, Vegliante said.
The decision to cancel this year's payments will hurt morale, Vegliante acknowledged, but added that "I think our people can appreciate the situation we're in. This isn't because they didn't do something right."