48:0552(54)NG - - NFFE, Local 858 and Dept. of Agriculture, Federal Crop Insurance Corporation - - 1993 FLRAdec NG - - v48 p552



[ v48 p552 ]
48:0552(54)NG
The decision of the Authority follows:


48 FLRA No. 54

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

NATIONAL FEDERATION OF FEDERAL EMPLOYEES

LOCAL 858

(Union)

and

U.S. DEPARTMENT OF AGRICULTURE

FEDERAL CROP INSURANCE CORPORATION

(Agency)

0-NG-2135

_____

DECISION AND ORDER ON NEGOTIABILITY ISSUES

September 29, 1993

_____

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute) and concerns the negotiability of two proposals.(1)

The disputed portion of Proposal 1 provides that if employees do not have sufficient training or experience in an element of their position to allow supervisors to objectively rate their performance, those employees will not be evaluated on that element for that appraisal cycle. We find that this proposal is nonnegotiable because it excessively interferes with management's rights to direct employees and to assign work.

Proposal 2 establishes policies for an Agency awards program. Section D of Proposal 2 requires the Agency to ensure that employees at all grade levels are reasonably represented in the performance awards given. Sections E and F of Proposal 2 mandate the granting of performance awards under the circumstances set forth in those sections. We find that Sections D, E, and F are inconsistent with 5 C.F.R. § 430.504(d) (1993), a Government-wide regulation, and, therefore, are nonnegotiable under section 7117(a)(1) of the Statute.

II. Proposal 1

Article 12.2, Rating Cycle

The performance rating cycle for bargaining unit employees under the Performance Management Review System (PMRS) will run from October 1 through September 30 of each year. The performance rating cycle for all other bargaining unit employees will be June 1 through May 31 of each year. The shortest time for which employees can be rated is 120 days, since this is normally considered the minimum amount of time in which a supervisor is able to make an objective appraisal of an employee's overall performance. The longest period of time will not exceed 15 months. Employees will not be evaluated on duties and responsibilities which they were not given the opportunity to perform during the appraisal period.

If an employee does not have sufficient training or experience on an element for the supervisor to objectively rate the employee's performance, the employee will not be rated on that element for that appraisal cycle.

[Only the underlined portion is in dispute.]

A. Positions of the Parties

1. Agency

The Agency contends that Proposal 1 is nonnegotiable because it is inconsistent with management's rights to direct employees and to assign work under section 7106(a)(2)(A) and (B) of the Statute. The Agency claims that Proposal 1 would preclude supervisors from rating employees under the circumstances contained in the proposal. According to the Agency, because the proposal precludes management from rating employees, the proposal directly interferes with management's rights to direct employees and to assign work.

2. Union

The Union contends that Proposal 1 is an appropriate arrangement, within the meaning of section 7106(b)(3) of the Statute, which provides employees with a "sufficient opportunity to gain the experience and training to acceptably perform" the elements of their positions. Petition, Attachment 3. The Union states that the proposal "would serve only to extend the rating period" for those elements. Id.

The Union explains that the proposal applies only to those elements for which an employee has insufficient training or experience. According to the Union, the proposal would not prevent management from rating employees on other elements. Rather, the Union contends, the proposal "uses the minimum 120 day to the maximum 15 month rating period . . . for rating of elements in which the employee lacks sufficient training or experience." Response at 1. The Union states that once employees have obtained the training and experience to perform an element satisfactorily, they could be rated on that element, following the intent of the minimum rating cycle.

The Union asserts that the proposal constitutes "due process" for employees who "are not always in the position for which they applied." Id. at 2. The Union claims that employees could be in their positions due to a "[r]eduction-in-force [RIF], transfer of function, reorganization[] [or] other factors beyond their control." Id. Noting that the Agency's Merit Promotion Plan recognizes the importance of training and experience, the Union argues that employees who have been placed in positions for which they did not apply should not be rated on elements of those positions if they lack the relevant training or experience.

B. Analysis and Conclusions

For the following reasons, we find that the disputed portion of Proposal 1 is nonnegotiable.

1. Meaning of the Proposal

Proposal 1 provides that if employees do not have sufficient training or experience in particular elements of their positions for supervisors to objectively rate their performance in those elements, they will not be evaluated on those elements for the rating cycle. The Union explains that, under the proposal, when employees have obtained sufficient training or experience, management can evaluate them during the rating cycle on those elements. However, the literal wording of the proposal provides that management will not rate employees during "that appraisal cycle[.]" Therefore, the wording of the proposal would not allow management to rate employees during the rating cycle on those elements for which employees do not have sufficient training or experience, even if the employees obtained sufficient training or experience in those elements during that cycle. Consequently, to the extent that the Union interprets the proposal to allow management to rate employees during the rating cycle in such circumstances, we find that that interpretation is inconsistent with the wording of the proposal and we will not adopt it. See, for example, National Treasury Employees Union and U.S. Department of Health and Human Services, Social Security Administration, Office of Hearings and Appeals, Falls Church, Virginia, 47 FLRA 705, 708-09 (1993) (SSA) (Member Armendariz concurring in part and dissenting in part as to other matters).

2. Proposal 1 Directly Interferes with Management's Rights to Direct Employees and to Assign Work

Proposals that prohibit management from evaluating employees' performance concerning certain functions if the employees have not been trained in those functions directly interfere with management's rights, under section 7106(a)(2)(A) and (B) of the Statute, to direct employees and to assign work. See, for example, American Federation of Government Employees, AFL-CIO, Local 32 and Office of Personnel Management, 15 FLRA 264 (1984) (OPM) and American Federation of Government Employees, AFL-CIO, Local 3004 and Department of the Air Force, Otis Air Force Base, Massachusetts, 9 FLRA 723 (1982) (Otis AFB). Because the disputed portion of Proposal 1 precludes management from appraising employees during the rating cycle on elements for which they do not have sufficient training or experience for supervisors to objectively rate their performance, we find, consistent with OPM and Otis AFB, that Proposal 1 directly interferes with management's rights, under section 7106(a)(2)(A) and (B) of the Statute, to direct employees and to assign work.

Because the disputed portion of Proposal 1 directly interferes with management's rights, under section 7106(a)(2)(A) and (B) of the Statute, to direct employees and assign work, it is nonnegotiable unless it constitutes an appropriate arrangement under section 7106(b)(3) of the Statute.

3. Proposal 1 Does Not Constitute an Appropriate Arrangement within the Meaning of Section 7106(b)(3) of the Statute

To determine whether a proposal is an appropriate arrangement, we first decide whether the proposal is intended as an arrangement for employees adversely affected by the exercise of a management right. National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24, 31 (1986) (KANG).(2) If we determine that the proposal is an arrangement, we examine whether the arrangement is appropriate.

For the purposes of this decision, we will assume, without deciding, that Proposal 1 constitutes an arrangement within the meaning of section 7106(b)(3) of the Statute. See, for example, Patent Office Professional Association and U.S. Department of Commerce, Patent and Trademark Office, 48 FLRA 129, 136-37 (1993) (Member Armendariz dissenting as to other matters). We next consider whether the proposed arrangement is appropriate within the meaning of section 7106(b)(3) of the Statute. See id. To make this determination, we examine the competing practical needs of employees and managers, weighing the benefit afforded employees under the proposal against the burden imposed by the proposal on the exercise of management's rights. KANG, 21 FLRA at 31-32.

Proposal 1 is intended to ameliorate the adverse effects on employees' performance appraisals insofar as those appraisals concern elements for which employees do not have sufficient training or experience for supervisors to objectively rate their performance. The proposal protects employees who do not have sufficient training or experience in elements of their positions from receiving adverse evaluations on those elements by precluding the Agency from evaluating employees on those elements. Performance appraisals are the basis for rewarding, reassigning, promoting, reducing in grade, retraining and removing employees. Performance appraisals also are one of the factors used in determining employees' retention standing for RIF purposes and in selecting employees for promotion and other career enhancement opportunities. Thus, the ratings that employees receive in their performance appraisals have significant consequences for their employment relationships. See, for example, American Federation of Government Employees, Local 3509 and U.S. Department of Health and Human Services, Social Security Administration, Greenwood, South Carolina District, 46 FLRA 1590, 1599-1602 (1993).

Under the proposal, the Agency would be prohibited from evaluating employees for the entire rating cycle on elements for which they do not have sufficient training or experience to be rated objectively. The disputed portion of the proposal precludes management from appraising employees for the entire rating cycle on a particular element unless those conditions are met, without regard to whether defects in performance were attributable to lack of training or experience.

Based on the above, we find that the burden imposed by the proposal on the exercise of management's rights to direct employees and to assign work through the evaluation of employee performance outweighs the benefits afforded to employees under the proposal. We find, therefore, that the proposal excessively interferes with management's rights, under section 7106(a)(2)(A) and (B) of the Statute, to direct employees and to assign work. Consequently, we conclude that the disputed portion of Proposal 1 does not constitute an appropriate arrangement under section 7106(b)(3) of the Statute and is nonnegotiable. See, for example, Patent Office Professional Association and U.S. Department of Commerce, Patent and Trademark Office, 41 FLRA 795, 815 (1991); U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, AFL-CIO, 39 FLRA 258, 267 (1991).

III. Proposal 2

Article 27.1, Policy

The Parties agree that an incentive awards program is a necessary and useful mechanism through which employee accomplishments that exceed standards or expectations and result in improved [G]overnment productivity will be recognized. The Employer will continue to foster and administer an on-going program which shall[:]

. . . .

D. [a]ssure that employees at all grade levels will be reasonably represented in the awards given.

E. All employees who receive above the fully successful level of performance rating will receive a high quality step increase.

F. All employees who receive above the fully successful performance rating for two consecutive years will receive a Sustained Performance Award.

[Only the underlined portions are in dispute.]

A. Positions of the Parties

1. Agency

The Agency contends that sections D, E, and F of Proposal 2 are inconsistent with 5 C.F.R. § 430.504(d), a Government-wide regulation, and, therefore, are nonnegotiable under section 7117(a)(1) of the Statute.(3) The Agency argues that because the disputed sections of the proposal do not allow for the disapproval of awards by Agency officials, they are inconsistent with 5 C.F.R. § 430.504(d).

The Agency claims that the disputed sections do not "echo the intent" of the Office of Personnel Management (OPM) in establishing an incentive awards program that rewards all employees for exceptional performance. Statement at 5. Rather, the Agency notes that all three sections use the term "will" and argues that the use of that term mandates the granting of awards without regard to review and approval by appropriate officials.

2. Union

The Union states that section D of Proposal 2 "echoes the intent of OPM in establishing an incentive awards program that rewards all employees for exceptional performance." Response at 3. The Union contends that sections E and F of Proposal 2 establish the procedure by which section D will be carried out. The Union asserts that sections D, E, and F do not infringe on management's rights but rather establish "a coherent and consistent procedure which will further the intent of the performance-based awards program established by OPM." Id.

The Union asserts that the use of the term "will" in its proposal does not restrict the Agency's right to disapprove an award. The Union notes that, under the proposal, before an employee could receive an award, management would already have exercised its rights by establishing position descriptions, performance standards, critical and noncritical elements, and by rating the employee's performance. The Union claims that, under the proposal, at the point that an employee would be in a position to receive an award, the employee would already have been designated by management as having performed at the higher level.

B. Analysis and Conclusions

By its terms, Proposal 2 concerns the Agency's incentive awards program. However, the wording of Proposal 2 also indicates that the awards contemplated by the proposal are based on an employee's performance rating. We note that 5 C.F.R. § 430.504 governs performance awards. Performance awards, by definition, are based on an employee's rating of record. 5 C.F.R. § 430.502. Incentive awards are governed by 5 C.F.R. Part 451.(4) Therefore, it is unclear to us solely from the wording of Proposal 2 whether the awards covered by Proposal 2 are performance awards, which are governed by 5 C.F.R. Part 430, or incentive awards, which are governed by 5 C.F.R. Part 451.

However, because the Agency relies on the regulations governing performance awards and because the Union does not dispute the Agency's interpretation that the proposal concerns performance awards, but asserts that the disputed sections are procedures "which will further the intent of the performance-based awards established by OPM," we will assume for the purposes of this decision that the proposal concerns performance awards governed by 5 C.F.R. § 430.504(d). Response at 3. In addition, we note that in any event, both 5 C.F.R. § 430.504(d) and 5 C.F.R. § 451.104(j) require that a decision to grant, respectively, performance awards or incentive awards be subject to review and approval by an official of the agency at a higher level than the official who made the initial decision.

5 C.F.R. § 430.504(d), which is a Government-wide regulation, requires agency officials to review and approve determinations to grant cash performance awards as well as the amount of such awards. National Federation of