Can Better Labor Management Relations Make The Federal Government More Efficient and Improve Agency Performance? Februar

1. Can Better Labor Management Relations Make The Federal Government More Efficient and Improve Agency Performance?February 23, 2011 DC LERA Robert M. Tobias, Director Key Executive Leadership Programs, American University

2. Historical Themes in Federal Sector Labor Management Relations • Broad scope of management rights resulting in a narrow scope of mandatory bargaining • Political appointees task Labor Relations to preserve the broad management rights clause in the federal sector • Unions seek to limit management rights and provide a rational for joining to prospective members • Swing from adversarial to collaborative to adversarial to collaborative

3. Why Is Labor Management Collaboration Advantageous to the Parties? • Unions: Member involvement with a link to mission accomplishment Increased membership because of focus on 95% who never have a grievance Broader opportunity to participate • Management: Increased results

4. Role of Metrics • Business leader involvement • Clear joint effort with ability to celebrate clear joint result • Results vs. personality driven • Link to mission accomplishment • Easier for constituency understanding and acceptance

5. PHASE I: 1962-1993

6. Executive Order 10988: President Kennedy President Kennedy elected Pressure for legislation Task force created with Secretary of Labor Arthur Goldberg as Chair, and Daniel Patrick Moynihan as the Staff Director Recommended an Executive Order with a narrow scope of bargaining which was adopted by President Kennedy Issued January 17, 1962

7. What Were the Institutional Metrics from 1962 to 1993? • No government-wide metrics • Structure: Totally reactive • Process: Adversarial • No cost/benefit measurement

8. What Were The Metrics Used by the Parties to Measure Results from 1962 to 1993? Union Management • Number of grievances, unfair labor practice complaints, negotiability appeals, and law suits won • Number of Congressional hearing requests generated by the union squashed • Successful positioning of agency as being the subject of unfair and unfounded union attacks/complaints • Limiting the expansion of the scope of bargaining Number of grievances, unfair labor practice complaints, negotiability appeals, and law suits won Number of Congressional hearings generated Number of critical GAO and IG reports generated Scope of bargaining expanded

9. Phase II: 1992-2002

10. President Clinton • High programmatic aspirations, no money, low public confidence in government, and adversarial labor management relations. • National Performance Review: March 1993 • Initially did not include a study of labor management relations. • Final NPR Report recommended new Executive Order that was issued as Executive Order 12571

11. Rationale for Executive Order “The involvement of Federal Government employees and their union representatives is essential to achieving the National Performance Review’s Government reform objectives. Only by changing the nature of Federal labor-management relations so that managers, employees, and employees’ elected union representatives serve as partners will it be possible to design and implement comprehensive changes necessary to reform Government.”

12. What were the Metrics from 1993-2002

13. No Government-Wide Metrics • President Clinton failed to implement a government-wide policy for measuring organizational improvement that required labor management relationships to compare themselves to a government-wide standard supported by OPM, OMB, and Political Appointees. • Without the metric and support, there was more focus on improving the labor management relationships and less focus on improving organizational performance.

14. GAO Study • GAO studied management efforts to involve employees in partnerships at the Federal Aviation Administration, the Federal Emergency Management Agency, the Internal Revenue Service, the Office of Personnel Management, and the Veterans Benefits Administration • Concluded: "Effective changes can only be made through the cooperation of leaders, union representatives, and employees throughout the organization."

15. Return on Investment • Cost Avoidance from a less adversarial process e.g. grievances, unfair labor practices, law suites, time spent in formal bargaining • Cost Savings 1. Increased productivity from increased employee engagement 2. Increased savings from the introduction of new business processes/technology based on a collaborative labor management effort

16. OPM Results - 2000

17. DOD Partnership Council Results -1999 44 matched pairs of union and management: • “Sizeable majority” agreed: positive impact on agency operations, working conditions, customer service, and job satisfaction • 27% management and 38% union agreed: increase in productivity • Decrease in unfair labor practice charges filed from 3,691 to 2,092

18. National Partnership Council Results 2001 61 Partnerships across 8 agencies: • Majority felt their partnerships had a positive impact on internal customer satisfaction and labor management relations • Forty percent felt had a positive effect on cost savings and morale • Thirty three percent had a positive effect on productivity and external customer satisfaction • “Broadly shared perception” that labor management disputes declined

19. United States Customs Service - 1998 • Study covered period 1993-1998 • Gathered information on cost and benefit • $3M in net benefits • $1.25 in benefits for every $1.00 spent or 25% ROI

20. Metrics Summary • No government-wide metrics • Structure: Significant effort to create opportunities for discussions. No systemic measurement • Process: Significant effort to behave collaboratively. No systemic measurement • Return on Investment 1. Limited effort to calculate cost avoidance 2. No government-wide effort to measure employee engagement 3. Anecdotal evidence of return on investment

21. Phase III: 2000-2008

22. Executive Order 13203: President Bush • Revoked Executive Order 12871 • Dissolved National Partnership Council • Did not mandate dissolution of existing partnership councils in departments and agencies, but did have a significant negative impact • Issue of Presidential power resurfaced: “Placing decision-making in the hands of self-interested ‘partners’ [i.e. unions] puts the interests of the permanent government first. Democratic government is supposed to put the interests of the people first…It is, after all, the president who will be held accountable for the actions or inaction of his Administration-- not the unions.”

23. Metrics • Focus on agency performance goal achievement e.g. PART • No measures of collaborative process efforts • Some parties, based on an analysis of the benefits of the collaborative relationship, continued it • Many relationships went back to the mattresses

24. Phase IV: 2008-?

25. Executive Order 13522: President Obama • Established government-wide policy to engage employees, through their union representatives, and managers “to collaborate in continuing to deliver the highest quality services to the American people”; • Created 17-person National Council on Federal Labor-Management Relations to promote partnership efforts through-out the executive branch; • Mandated agency and department heads to create labor-management forums to give employees and their union representatives pre-decisional involvement on workplace issues; • Created “pilot” programs to negotiate “permissive” bargaining items under the relevant provision [7106(b) (1)] of the statute; • Mandated the systematic evaluation of the effects of labor-management forums on agency performance.

26. National Council Mandated Metrics

27. Mission Accomplishment and Service Quality Council: “The focus of metrics in this category is evaluating and documenting changes in results achieved, specifically whether the forum is contributing to improved mission achievement, service quality, or cost-effectiveness.”

28. Mission Accomplishment and Service Quality Council List of Options: 1. General or Specific Outcomes 2. Process/Cycle Time 3. Error Rate/Quality 4. Public Responsiveness/Problem Resolution/Customer Satisfaction 5. Internal Resource Management 6. Cost Savings/ROI 7. Revenue Collected 8. Agility 9. Other

29. Employee Satisfaction and Engagement Metrics Council List of Options: • Employee Engagement • Leadership and Knowledge Management • Talent Management • Job Satisfaction • Results Oriented Performance Culture • Attrition • Trends in Discrimination complaints • Availability and Use of Work-life Programs

30. Labor Management Relationship Metrics Descriptive Information What is happening at the Forums Specific tracking of all efforts at pre-decisional involvement Subjective views – survey Other data – grievances, ULPs, and litigation

31. Budget and Predecisional Involvement

32. January 19, 2011 Memo from Labor Management Council Chairs Reminder: “Management should discuss workplace challenges and problems with labor and endeavor to develop solutions jointly, rather than advise union representatives of predetermined solutions to problems and then engage in bargaining over the impact and implementation of the predetermined solutions.”

33. January 19, 2011 Memo from Labor Management Council Chairs Declaration: Pre-decisional involvement includes: “During the budget development phase” “During the time when Congress is considering the President’s Budget proposal” “This supplement to the bargaining process can be beneficial to both parties as it may identify and address unexplored ideas, or expedite any bargaining that may be required as a result of budget execution initiatives”

34. Why Aren’t Unions/Management Enthusiastically Endorsing The EO? History of Adversarial Labor Management Relations Lack of Organized, Enthusiastic Support from the Parties Political Environment e.g. Wisconsin

35. Future? Uncertain But this is the best chance so far at institutionalizing collaborative labor- management relationships that focus on performance yielding a more efficient and effective government.

36. American University Key Executive Leadership Programs Key web site: http://www.american.edu/spa/key/certificate.cfm Contact: Robert M. Tobias rtobias@american.edu 202-966-4213