SERVICE PERFORMANCE MEASUREMENT--A TEST OF ACTUAL LEGISLATIVE INTENT

The following is a perspective by postal commentator Gene Del Polito for the PostCom Bulletin. The views expressed are the author's. PostCom welcomes the sharing of alternative views that are responsibly expressed by their view-holders.

The issue of service performance standards and measurement is one of the real hot topics these days within the postal community. The U.S. Postal Service (USPS), the Postal Regulatory Commission (PRC), and mailing industry members of the Postmaster General's Mailers Technical Advisory Committee (MTAC)have been working toward the definition of service performance standards for the past several months.

The MTAC workgroup's activities are expected to culminate in an MTAC report with recommendations to the Postal Service. It is expected that this report will be part of what the USPS will communicate to the Postal Regulatory Commission as part of the PRC's rule making process.

The call for the Postal Service to develop service performance standards is really nothing new. This matter has been a part of the postal reform debate for well over a decade, and the Postal Service and industry representatives have been discussing the formulation of realistic service performance measurement standards and tools for quite some time. From the outset, those who have engaged the Postal Service most intensely on this issue have made their views on this matter abundantly clear.

First, it has long been maintained that service performance standards must reflect the Postal Service's real-world performance. Service goals that either are too stringent (that is, overly optimistic) or too lax simply wouldn't do. Mailers needed to know how long it would take the USPS to deliver mail prepared for various classes and at various levels of work sharing.

Second, mailers have made it clear that they believe a viable service performance measurement scheme should be derived from the very tools the USPS itself would need to measure internally its own levels of performance as a means for improving overall service quality and mail value. Mailers really didn't see much sense in developing a service performance measurement system that provided little benefits whatever to the Postal Service's effort to improve the quality of its own performance.

Finally, long-time advocates of service performance measurement have made clear that since the vehicles for service performance measurement should be virtually identical those needed by USPS management, the cost to mailers for participating in and gaining access to information on service performance measurement should be minimal. As in the case of UPS, mailer advocates believed that the market-based utility of service performance measurement should come as a by-product of management's efforts to improve system-wide performance to better meet the needs of a more competitive communication marketplace.

To the best of my knowledge, these views have been shared by those who are leading the MTAC service performance workgroup. If these views are actualized in the workgroup's final report, it should be clear that mailers expect the Postal Service, at least initially, to use current internally available USPS technology for service performance measurement rather than have the Postal Service resort to the sort of "independent" and extremely costly system used today to measure stamped, collection box-deposited, base-rate, First-Class Mail letter mail.

The goal of the MTAC service performance workgroup has been to ensure that mail service standards development and measurement was adequate to satisfy mailer needs--mailer needs, that is, rather than specific mailer wants. To be honest, some mailers want a whale of a lot more than for which they're willing to pay. If service performance is to come cheaply, it must be conducted with tools the Postal Service either already has or has under development. Anything more than this would result in a service performance measurement system that would result in extraordinary costs, i.e., costs that go well beyond what's needed to move the Postal Service steadily along a path of service performance improvement without imposing larger than necessary costs on the system, which ultimately would have to be borne by postage payers.

While the Postal Accountability and Enhancement Act designates that the USPS and PRC should act as partners in the development of service performance standards and measurement, most mailers have accepted as a given that the manner by which the USPS runs the nation's postal system should be a prerogative of management and not the postal regulator. In a similar vein, the expectation always has been that actual service performance measurement would be a management responsibility. For its part, the PRC would take lead responsibility for ensuring that all service measurements are conducted and reported accurately and made available publicly.

It would be a real shame if the current service performance exercise is imprudently turned into a turf war designed merely to satisfy the ego needs of some participants. Mailers should remain level-headed on what service performance standards and measurement are meant to do. Management should clearly evidence a realistic appraisal of actual mailer and market needs. And the Postal Regulatory Commission should be mindful that the postal world welcomes its participation as an auditer and guarantor of service performance transparency without hamstringing itself and mailers with service performance expectations that are beyond what is reasonable and a system of measurements that add unnecessarily to system-wide costs.