[ v13 p578 ]
The decision of the Authority follows:
13 FLRA No. 96 AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO, COUNCIL 26 Union and U.S. DEPARTMENT OF JUSTICE Agency Case No. O-NG-529 DECISION AND ORDER ON NEGOTIABILITY ISSUE The petition for review in this case comes before the Authority pursuant to section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). The issue presented is the negotiability of the following proposal: Union Proposal Section 11.3. RATING LEVELS: There will be five rating levels for individual elements of an employee's position: unsatisfactorily, minimally satisfactory, fully successful, excellent, and outstanding. There will be three rating levels for overall performance: unsatisfactory, satisfactory, and outstanding. An employee will be rated unsatisfactory if one or more individual critical elements is rated unsatisfactory. To receive an outstanding performance rating, the employee must demonstrate outstanding performance in a majority of the critical elements of the position and no individual performance element may be less than fully successful. Question Before the Authority The question presented is whether, as alleged by the Agency, the Union's proposal is inconsistent with management's rights to direct employees in the agency and to assign work under, respectively, section 7106(a)(2)(A) and (B) of the Statute. Opinion Conclusion and Order: The Union's proposal is inconsistent with the rights to direct employees and to assign work under section 7106(a)(2)(A) and (B). Accordingly, pursuant to section 2424.10 of the Authority's Rules and Regulations, IT IS ORDERED that the Union's petition for review be, and it hereby is, dismissed. Reasons: The last two sentences of the proposal would establish what quality of performance in individual job elements would be required to achieve a particular summary rating. In National Treasury Employees Union and Department of the Treasury, Bureau of the Public Dept, 3 FLRA 769, 776-78(1980), affirmed sub nom. National Treasury Employees Union v. Federal Labor Relations Authority, 691 F.2d 553, 556-57, 564 (D.C.Cir 1981), it was held that, in order to achieve the levels of productivity and quality needed to accomplish an agency's mission and functions, management may determine, pursuant to its rights to assign work and direct employees, what work will be done, by whom, when, and what standards of quality and quantity are expected. Thus, in that case the Authority found a proposal to establish a particular critical element and a performance standard with respect to that element outside the duty to bargain. Thereafter, in National Treasury Employees Union and U.S. Nuclear Regulatory Commission, 13 Flra no. 49(1983), the Authority held that those management rights extend to the establishment of the job requirements, i.e., productivity or performance standards, for individual job elements which serve as the basis for encouraging and rewarding successful performance and discouraging and remedying performance which is unacceptable. /1/ Some rewards or sanctions are based on overall performance /2/ while others are based on an employee's performance in a single job element. /3/ Thus, as to overall performance as well as performance in each job element, an essential aspect of management's assignment of work and the supervision and guidance of employees in the performance of their work is to establish job requirements for various levels of performance so as to achieve the quality and amount of work needed from employees to effectively and efficiently fulfill the agency's mission and functions. Consequently, the portion of the Union's proposal which would establish the particular levels of performance in individual job elements which would be required to achieve a particular summary rating for overall performance is not within the duty to bargain because it is inconsistent with management's rights to assign work and to direct employees. Of course, a proposal which would permit an employee to grieve the application to that employee of the performance requirements established by management would be within the duty to bargain. American Federation of Government Employees, AFL-CIO, Local 1968 and Department of Transportation, Saint Lawrence Seaway Development Corporation, Massena, New York, 5 FLRA 70 (1981) (Union) Proposal 4), affirmed sub nom. American Federation of Government Employees, AFL-CIO, Local 1968 v. Federal Labor Relations Authority, 691 F.2d 565 (D.C. Cir. 1982), cert. denied, . . . U.S. . . . , 103 S.Ct. 2085(1983). The proposal would also establish in the first two sentences the number of rating levels for the appraisal of an employee's performance in individual job elements and for a summary appraisal of overall performance. In affirming the Bureau of the Public Debt decision discussed above, the United States Court of Appeals for the District of Columbia stated: Without a doubt, the right to determine what work will be done, and by whom and when it is to be done, is at the very core of successful management of the employer's business, whether a private-sector enterprise or the public service operations of a federal agency. It follows necessarily that this right is essential to management's ability to achieve optimum productivity, and accordingly to the agency's ability to function in an effective manner. The Authority's construction of Section 7106(a) as a reservation of this invaluable right to management, thereby insulating it from dilution at the bargaining table, is thus fully obedient to the congressional command that the Act be interpreted in a manner consistent with the exigencies of efficient government. 691 F.2d at 563. The number of performance levels for both individual job elements and overall performance are essential aspects of the rights to assign work and direct employees. The determination of the number of performance levels directly affects the degree of precision with which management can establish and communicate job requirements (performance standards), the range of judgments which management can make regarding performance in the context of performance appraisals, and the range of rewards and sanctions which management can apply to such performance. /4/ In short, the number of such levels is integrally related to the effectiveness of an agency's using performance standards to accomplish the work of the agency in a manner consistent with the exigencies of effective government. Consequently, the portion of the Union's proposal which would establish the number of rating levels for each job element and for overall appraisals is, for that reason alone, not within the duty to bargain. Moreover, as to performance levels for individual job elements, that portion of the proposal would have the additional effect of determining the number of performance standards or requirements which must or may be established by management. /5/ That is, the proposal herein permits management to establish, at a minimum, two performance standards for each job element and, at a maximum, five such standards. Since, as previously discussed, management has the right to establish performance standards, any proposal, such as the proposal in dispute herein, which would prevent management from doing so or which would require it to establish a performance standard would directly interfere with that right. In sum, for the foregoing reasons, the instant proposal is outside the duty to bargain since it would directly interfere with management's rights to direct employees and assign work pursuant to section 7106(a)(2)(A) and (B) of the Statute. /6/ Issued, Washington, D.C., January 10, 1984 Barbara J. Mahone, Chairman Ronald W. Haughton, Member Henry B. Frazier III, Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- /1/ The results of a performance appraisal are the basis of the following incentives and sanctions: within-grade salary increases, merit promotions, recognition and awards, retention standing in a reduction-in-force, completion of probationary period, reassignment, reduction in grade, and removal. Chapter 430, Federal Personnel Manual, Appendix A, section A-2b. /2/ For example, in order to attain a within-grade salary increase, absent unusual circumstances, an employee's overall performance must be at the fully acceptable level, 5 CFR 531.403 (1982). Similarly each employee who has an "outstanding" performance rating, or its equivalent, shall receive four additional years of service toward his or her retention standing in connection with a reduction-in-force. 5 CFR 351.504(1982). /3/ Under regulations issued by the Office of Personnel Management, performance by an employee below the minimum standard established by management in any critical element requires the denial of a within-grade increase. 5 CFR 430.202(e)(1982). /4/ An agency's use of performance appraisals in connection with a reduction-in-force to assign an amount of service credit for performance which exceeds the minimum acceptable performance standards is one example of how management may use various performance appraisal levels to encourage and reward progressively better performance. 5 CFR 351.504(1982). /5/ See Federal Personnel Manual Letter 430-4, March 24, 1981 at 1. /6/ See National Federation of Federal Employees, Local 1028 and Department of the Army, Corps of Engineers, Norfolk District, Norfolk, Virginia, 7 FLRA No. 17 (1981).