LABOR-MANAGEMENT PARTNERSHIP A REPORT TO THE PRESIDENT

United States Office of Personnel Management

LABOR-MANAGEMENT PARTNERSHIP
A REPORT TO THE PRESIDENT
December 2000

Section III - Results and Accomplishments

President Clinton's reaffirmation memorandum directs agencies to "identify specific improvements in customer service, quality, productivity, efficiency, and quality of worklife that have been achieved as a result of partnership." This section of the report will examine the results agencies and unions have achieved through partnership.

Most reports contained little quantitative data to support the conclusions about partnership and its impact. In the areas of customer service, quality, and productivity, a substantial number of reports contained no information at all about improvements resulting from partnership.

We believe many agencies are finding it extraordinarily difficult to quantify changes in labor-management relations and to measure the impact of those changes on the performance of large, complex organizations. Two agencies that conducted such an analysis -- the Customs Service and the Social Security Administration -- each spent close to one year developing an analytical framework, establishing baseline data, collecting labor relations information across their entire organizations, developing models that quantify the costs and benefits of partnership, and comparing agency performance before and after partnership.

As we mentioned earlier, the National Partnership Council's current study of partnership in eight Federal agencies will yield a partnership evaluation model that agencies and unions throughout the Federal Government can rely on to assess the impact of their own labor-management partnerships. In future reports, we would expect to see more quantitative information concerning the impact of partnership on Federal agency performance.

1. Customer Service

Ten agencies reported that labor-management partnership had directly and significantly improved customer service throughout most of the agency. We characterized these results as substantial. Another nine agencies reported that partnership had directly and significantly improved customer service in some parts of the agency. We characterized these results as moderate. Four agencies reported little improvement to customer service due to partnership, results we characterized as minimal. Fifteen agencies did not report anything at all about the impact of partnership on customer service.

Listed in Table 11 are agencies that have made substantial improvements in customer service as a result of partnership. Listed in Table 12 are agencies that have achieved moderate improvements.

Table 11

Defense
Education
Federal Mediation and Conciliation Service
General Services Administration
Interior
Labor

Merit Systems Protection Board
Social Security Administration
Treasury
United States Agency for International Development

Table 12

Agriculture
Consumer Product Safety Commission
Energy
Federal Trade Commission
Justice
National Labor Relations Board
Office of Personnel Management
Transportation
Veterans Affairs

Here are two leading examples of quantifiable improvements in customer service resulting from partnership:

Since 1995, the United States Mint has participated in the American Customer Satisfaction Index (ACSI). This broad-based, comprehensive survey measures consumer satisfaction for a variety of private companies and public organizations. The Mint has consistently ranked near the top for customer service, placing among many highly respected private organizations such as BMW of North America, Daimler-Chrysler, and Hershey Foods. AFGE and the Mint have jointly developed the agency's strategic business plan for the past 6 years. The Mint attributes much of its impressive ACSI ranking to customer service enhancements developed and implemented in partnership with AFGE.
The Social Security Administration receives almost a quarter of a million calls per day on its toll-free customer service line. Through its partnership with AFGE, SSA has reengineered many business practices related to its 800 number. This has produced dramatic gains in customer service. In 1995, SSA's 800 number outscored all other organizations for customer satisfaction, rating higher than private industry leaders like Nordstrom, LL Bean, and Xerox. In 1999, SSA received an overall customer satisfaction rating of 88%, with a score of 90% for the courtesy of its 800 number representatives.

2. Quality

The results are also mixed when it comes to assessing partnerships' impact on the quality of products and services. Nine agencies reported substantial improvements in quality as a result of partnership. Another 11 agencies reported at least moderate improvements to quality. Eighteen agencies -- almost half -- reported nothing at all in this category.

Listed in Table 13 are agencies that have made substantial improvements in quality as a result of partnership. Listed in Table 14 are agencies that have achieved moderate improvements.

Table 13

Environmental Protection Agency
Federal Mediation and Conciliation Service
General Services Administration
Interior
Labor
Merit Systems Protection Board
National Labor Relations Board
Social Security Administration
Treasury
United States Agency for International Development

Table 14

Agriculture
Education
Energy
Federal Emergency Management Agency
Housing and Urban Development
Justice
National Aeronautics and Space Administration
Office of Personnel Management
Small Business Administration
Veterans Affairs

Here are two leading examples of quality improvements made through partnership:

Patient care and quality have improved dramatically at the James A. Haley Veterans' Hospital in Tampa, Florida as a result of the Hospital's partnership with AFGE Local 547, the Florida Nurses Association, and the Tampa Professional Nurses Unit. Labor-management quality improvement teams developed new streamlined procedures that have reduced delivery time for critical medication from 92 minutes to 20 minutes, cut the turnaround time for x-ray reports from 8 days to 1 day, and reduced processing time for pension and compensation examinations from 31 days to 18 days.
The Internal Revenue Service (part of the Treasury Department) has a quality office that works closely with the National Treasury Employees Union and agency managers to ensure quality efforts are widely implemented and fully recognized. Together, labor and management have developed programs to train employees on new work procedures, cut training time and costs, streamlined the process by which IRS agents research, process, and report revenue, and eliminated paperwork.

3. Productivity and Efficiency

Partnerships' impact on productivity and efficiency has varied widely, although more agencies reported gains here than they did for customer service or quality.

A significant number of agencies -- 16 in all -- reported substantial improvements in productivity and efficiency as a result of partnership. Another 8 agencies reported that partnership produced at least moderate gains in these areas. Fourteen agencies did not report anything at all in this category.

Listed in Table 15 are agencies that have made substantial improvements in productivity as a result of partnership. Listed in Table 16 are agencies that have achieved moderate improvements.

Table 15

Defense
Education
Federal Emergency
Federal Labor Relations Authority
Federal Mediation and Conciliation Service
General Services Administration
Interior
Labor

Management Agency
Merit Systems Protection Board
National Labor Relations Board
Office of Personnel Management
Small Business Administration
Social Security Administration
Treasury
United States Agency for International Development
Veterans Affairs

Table 16

Agriculture
Commerce
Energy
Environmental Protection Agency
Federal Trade Commission
Justice
National Aeronautics and Space Administration
Transportation

Here are some leading examples of productivity gains achieved through partnership:

Operation Brass Ring was a joint effort by the Customs Service (part of the Treasury Department) and the National Treasury Employees Union to increase the amount of illegal narcotics seized at our borders. A seven-step strategy developed at a meeting of the Customs/NTEU National Partnership Council called on labor and management to create specific action plans at over 100 major land border and airport ports of entry. These joint action plans, implemented throughout the country, resulted in a 42% increase in the amount of illegal narcotics seized and a 74% increase in the amount of drug currency seized over the six-month life of the initiative.

Productivity gains like these are a hallmark of the Customs-NTEU partnership. A cost-benefit analysis of partnership conducted by Booz-Allen found that each $1.00 Customs spent on partnership between 1994-1998 returned a benefit of roughly $1.20 to the agency. Booz-Allen also found that even the intangible, non-monetary benefits of partnership helped to increase Customs' efficiency and effectiveness in meeting its mission.
Between 1996 and 1998, the Defense Distribution Depot, San Joaquin, and AFGE Local 1546 reduced workplace accidents by 20% and ergonomic injuries by 40%, saving $950,000 annually. Labor and management have also cut overtime costs from $9.8 million in FY 1995 to $1.4 million in FY 1999. At the same time, production costs have been cut from an average of $25.42 per unit for FY 1995-1998 to $23.48 per unit in FY 1999.
The VA Regional Office in Waco, Texas, serves almost 900,000 veterans and their families with annual benefit payments totaling $1 billion. A Regional Office partnership with AFGE Local 2571 was established in March 1998, marking the end of a hostile, litigation-filled labor-management history. Dramatic improvements in operations and services since then are attributed directly to the Regional Office's partnership. Labor and management have worked together to reduce the backlog of compensation and pension cases by almost 20 percent. The rate of lost calls has been cut from over one in five to less than one per hundred, and the number of blocked calls has fallen from 86% to zero. Today, 95 percent of customers are helped within 10 minutes of their arrival in the Regional Office.

4. Cost Savings and Cost Avoidance

Twenty-one agencies reported what we would characterize as substantial cost savings and cost avoidance resulting from partnership, while another six reported at least moderate savings in these areas. Eleven reports contained no information about cost savings or cost avoidance.

Significantly, almost half the reports claiming that partnership saved or avoided money also included real dollar figures to substantiate those assertions. Most of the reported savings were attributed to better labor-management relations and a corresponding reduction in the number and cost of grievances and litigation, especially unfair labor practice claims.

Training in ADR and interest-based bargaining was cited as a major factor in this success, as these techniques helped to improve partnership council effectiveness and enhance problem-solving at early stages of disputes. Many agencies and unions also reported more efficient contract negotiations as a result of partnership, thus avoiding the cost of third-party intervention.

Listed in Table 17 are agencies that have made substantial improvements in cost effectiveness as a result of partnership. Listed in Table 18 are agencies that have achieved moderate improvements.

Table 17

Commerce
Consumer Product Safety Commission
Defense
Education
Energy
Federal Emergency Management Agency
Federal Labor Relations Authority
Federal Mediation and Conciliation Service

Federal Trade Commission
General Services Administration
Health and Human Services
Interior
International Trade Commission
Justice
Merit Systems Protection Board
National Labor Relations Board
Office of Personnel Management
Small Business Administration
Social Security Administration
Treasury

Table 18

Agriculture
Corporation for National Service
Environmental Protection Agency
National Aeronautics andSpace Administration
Transportation
Veterans Affairs

Here are some leading examples of cost savings and cost avoidance achieved through partnership:

The Social Security Administration estimates annual savings of $7-8 million dollars due to a dramatic decline in unfair labor practice charges, from a high of 467 in 1990 to 167 in 1999.
The Bureau of Reclamation (part of the Department of Interior) reports savings of $500,000 as a result of the work done by its multi-union Partnership Council. The Council's use of interest-based problem-solving and open communications has almost completely eliminated the need for third-party review of grievances and other complaints. The significant cost savings, along with other accomplishments, resulted in the Council receiving the 1999 Interior Labor-Management Partnership Council Partnership of the Year Award.
The Department of Defense reports a steady decline in unfair labor practice charges, from 3,691 in FY 1993, just prior to Executive Order 12871, to 2,231 in FY 1999.
In 1996, labor and management at HHS agreed to realign the structure of the agency's bargaining units to provide greater consistency with a recent agency-wide reorganization. The FLRA General Counsel estimates HHS saved over $500,000 and completed its realignment in half the time by using a partnership approach rather than more traditional labor-management procedures.
The Department of Veterans Affairs reports a 35% drop in unfair labor practice charges from 1993 to 1999, a decline it links directly to partnership training and the growing use of alternative dispute resolution.

5. Quality of Worklife

Most agencies reported significant progress on quality of worklife initiatives as a result of partnership. On average, labor and management also spend more time on quality of worklife than any other issue. The most common achievements in this category are transit subsidies, alternative work schedules, telecommuting programs, and childcare. Out of 38 agencies, 16 reported substantial improvements to quality of worklife due to partnership and 10 reported moderate improvements. Five agencies reported minimal improvements while eight agencies did not report any information in this category.

Listed in Table 19 are agencies that have made substantial improvements in quality of worklife as a result of partnership. Listed in Table 20 are agencies that have achieved moderate improvements.

Table 19

Commerce
Education
Environmental Protection Agency
Federal Energy Regulator Commission
Federal Mediation and Conciliation Service
Federal Trade Commission
General Services Administration
Health and Human Services
Interior
International Trade Commission
Labor
National Labor Relations Board
National Science Foundation
Office of Personnel Management
Small Business Administration
Social Security Administration
Treasury
Agency for International Development

Table 20

Defense
Energy
Federal Labor Relations Authority
Justice
Merit Systems Protection Board
National Aeronautics and Space Administration
Nuclear Regulatory Commission
Overseas Private Investment Corporation
Transportation
Veterans Affairs

Here are two leading examples of improvements in quality of worklife achieved through partnership:

A product of the partnership between the Census Bureau (part of the Commerce Department) and AFGE Local 2782, the agency's Census Corporate University offers employees the opportunity to take fully accredited college courses at the work site after duty hours. The agency pays for each class, including books and applicable fees, as long as the employee successfully completes the course. Employees can pursue technical certificates under this program but the program will soon be expanded to include college degrees.
The Federal Energy Regulatory Commission has a productive partnership with AFGE Local 421 focusing on collaborative problem-solving and consensus decision-making. Labor and management jointly developed an agency-wide flexiplace program involving over 200 employees. The program was created by a joint task force of labor and management representatives formed by the partnership council. The task force established an evaluation process to assess the impact of telecommuting on communication, productivity, work/family issues, morale, and information technology.

6. Labor-Management Relations

The rise of partnership has had the greatest impact on the labor-management relations climate. Numerous reports described labor-management relations that were adversarial and ineffective before Executive Order 12871 was issued but have improved since then.

Sixteen agencies reported substantial improvements in labor-management relations as a result of partnership and another 14 agencies reported moderate improvements. Seven agencies reported minimal improvements. Only one did not report information in this category. There is widespread agreement that training in consensual forms of dispute resolution and the creation of partnership councils have contributed more than any other factors to improvements in labor-management relations.

Listed in Table 21 are agencies that have made substantial improvements in labor-management relations as a result of partnership. Listed in Table 22 are agencies that have achieved moderate improvements.

Table 21

Commerce
Corporation for National Service
Defense
Education
Federal Emergency Management Agency
Federal Mediation and ConciliationService
Federal Trade Commission
Health and Human Services
Interior
National Endowment for the Humanities
Office of Personnel Management
Small Business Administration
Social Security Administration
Treasury
United States Agency for International Development
Veterans Affairs

Table 22

Agriculture
Energy
Environmental Protection Agency
Federal Energy Regulatory Commission
Federal Labor Relations Authority
General Services Administration
International Trade Commission
Justice
Labor
National Aeronautics and Space Administration
National Labor Relations Board
National Science Foundation
Overseas Private Investment Corporation
Railroad Retirement Board
Transportation

Here are two leading examples of how partnership has helped improve labor-management relations:

In the early 1990s, the Department of Labor and AFGE's National Council of Field Labor Locals embarked on a 1-year effort to transform their labor-management relationship from hostility to cooperation. Their work resulted in a new Collective Bargaining Agreement and a new relationship, both founded in the belief that labor-management relations need not be a zero-sum game where one party gains at the expense of the other.

Over time, the parties learned that even the best labor-management partnerships have their ups and downs. Consistent with the President's reaffirmation memorandum, labor and management developed a revitalization plan to give their relationship a boost and make their partnership part of the agency's day-to-day business. The plan included an all-employee survey and focus groups in select field offices around the country. A labor-management team analyzed the results and developed an action plan calling for extensive training for field staff; revising the parties' existing Partnership Handbook; reemphasizing the importance of pre-decisional involvement; and reinforcing the existing commitment to partnership.
In the past, an adversarial relationship between Marine Corps Base Camp Lejeune and AFGE Local 2065 led to over 200 grievances and over 100 unfair labor practice charges annually. Over time the parties agreed this was no way to do business. They formed a labor-management partnership and began to focus on dispute resolution. In a two-year period from 1997 to 1999, unfair labor practice charges at Camp Lejeune dropped from a high of 120 down to zero. Grievances were almost always resolved at the lowest level, with only three grievances proceeding as far as the third step. The agency estimates the reduction in disputes has saved some $350,000 annually.

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