Information Manual For Employees signing a full Performance Agreement (SMS MEMBERS)

LIMPOPO PROVINCIAL GOVERNEMNT

Performance Management

System (PMS)

Information Manual

For

Employees signing a full

Performance Agreement

(SMS

MEMBERS)

April 2004 (2

nd

Edition)

Compiled: by Simeka Management Consulting through the support of the Integrated Provincial Support Programme (IPSP)

(i) Table of Contents

Page

i Table of Contents 1

ii List of tables 2

iii List of diagrams 3

iv Declaration 4

v Foreword 5

vi Acknowledgement 6

PART A: THE PERFORMANCE MANAGEMENT FRAMEWORK Chapter 1: The design and implementation of a Performance Management System of the Limpopo Province: An Overview

1.1 Phases of PMS design and implementation 8

Chapter 2: Introduction to Performance Management

2.1 What is Performance Management? 9

2.2 Why is Performance Management system necessary? 9 2.3 What does Performance Management system do? 10 2.4 What are the main objectives of a Performance Management System? 10

2.5 What are the underlying Principals of a PMS? 10

2.6 What does the legislation say about PMS in the Public Sector? 11

PART B: THE PERFORMANCE MANAGEMENT SYSTEM Chapter 3: What is the balanced scorecard (BSC)?

3.1 What constitutes the Provincial PMS 14

3.2 What is a score-card 15

3.3 The four perspectives, which form the pillars of the BSC approach to performance management

16

3.4 The strengths of the BSC approach 18

3.5 How does the BSC help managers? 19

3.6 Alignment of management plan to the balanced scorecard 19

PART C: IMPLEMENTATION OF PERFORMANCE MANAGEMENT SYSTEM (PMS)

Chapter 4: A Step-By-Step Guide: Developing the Organisational PM Framework in line with BSC

4.1 Introduction 25

4.2 Developing the strategic level framework 26 4.3 Developing the operational level framework 31

4.4 The performance management cycle 33

4.5 What are performance measures? 39

4.6 Criteria of a good measure 42

Chapter 5: Performance Planning and Contracting

5.1 Introduction to Performance Planning and Contracting 43 5.2 The different types of performance instruments 45 5.3 Who uses which type of performance instrument? 45 5.4 The parts of a complete performance instrument (PI) 45

5.5 About competences ₄₆

5.6 Completing the generic performance agreement (Part A of PI) 48 5.7 The development of performance plan (Part B) for SMS 48

Chapter 6: Monitoring Performance

6.2 Conducting Progress Reviews 66 6.3 Some useful notes in preparing and conducting progress review

discussions

68

6.4 Conducting the actual PRD ₇₁

6.5 What skills and attitudes are required to engage in an effective PRD 72

Chapter 7: Performance Evaluation

7.1 Introduction to performance evaluation 84 7.2 Conducting individual or team evaluations 86

7.3 Performance rating 86

7.4 Step by step performance evaluation / Rating process 88 7.5 Evaluating departmental / directorate performance ₉₀

Chapter 8: Managing Performance Outcomes

8.1 Role of communication in minimizing conflict ₁₀₃ 8.2 What guiding principles should manage performance outcomes? 103 8.3 What do the Public Service Regulations say about under-performance? ₁₀₄ 8.4 How to support employees who under-perform or whose performance is

unacceptable

104 8.5 Managing disagreement at the initial stage of drawing up a performance

agreement or memorandum of understanding on performance?

106 8.6 What are the consequences of collective agreements? 106 8.7 Performance improvement plan outline for managing

under-performance

107

Chapter 9: Oversight, Institutional Arrangements and Structures, Stakeholder Roles and Responsibilities

9.1 Performance management oversight ₁₁₁

9.2 Oversight functions 113

9.3 Lines of accountability ₁₁₃

9.4 Dispute Resolution 113

9.5 Institutional arrangements, structures, roles and responsibilities ₁₁₃ 9.6 Key stakeholders and their roles and responsibilities 114

9.7 Enabling conditions 118

9.8 Step-by-step in the development of a PMS roll-out 119

Annexure

1. Full Performance Agreement Example 120

2. Some Criteria for Assessing Generic Core Competencies 138

(ii) Lists of Tables

Table 1 The four perspectives of the BSC Pg 15

Table 2 Summary of the strengths of the BSC Pg 18

Table 3 Confirmation of the departmental vision Pg 27

Table 4 Developing a departmental strategic focus Pg 28

Table 5 Translating strategic objectives into four perspectives

Pg 29 Table 6 Identifying measures of success for each

strategic objective

Pg 30 Table 7 Developing the operational level framework Pg 31

Table 8 Description of P.M. Cycle: Phase 1 Pg 35

Table 9 Description of P.M. Cycle: Phase 2 Pg 36

Table 10 Description of P.M. Cycle: Phase 3 Pg 38

Table 11 Preparing for the self / managerial reviews (PRD) Pg 68 Table 12 Step-by-step guide to prepare for progress

review

Pg 69 Table 13 Step-by-step guide to conduct managerial & peer

reviews

Pg 70

Table 14 Rating scale Pg 87

Table 15 Points scale Pg 87

Table 16 Step-by-step guide to conduct department & directorate evaluations

Pg 91 Table 17 Routes to follow in the event of disagreement

when drawing up a P.A.

Pg 106 Table 18 Step-by-step guide for managing under /

unacceptable performance

Pg 107

(iii) List of Diagrams

Diagram 1 The four perspectives of the BSC Pg 17

Diagram 2 Confirmation of the departmental vision Pg 27

Diagram 3 Performance Management Cycle Pg 22,34

Diagram 4 Description of elements of performance measures

Pg 23, 40

Diagram 5 Example of performance measures Pg 24,41

Diagram 6 Phase 1: (Planning and Contracting) Pg 44

Diagram 7 Phase 2: (Monitoring Progress) Pg 65

Diagram 8 Phase 3: (Performance Evaluation) Pg 85

Diagram 9 Performance rating components Pg 86

Diagram 10 Managing Performance Pg 109

(iv) Declaration

DECLARATION OF COMMITMENT BY THE PREMIER OF THE LIMPOPO PROVINCE ON BEHALF OF ALL MEMBERS OF THE EXECUTING COUNCIL (MECS): 23TH OCTOBER 2002

“I, Ngwako Ramathlodi, Premier of the Limpopo Province, in my capacity as Head of the Executive Council, hereby commit myself and all members of the Executive Council to lead and support the full implementation of the Performance Management System (PMS) adopted and developed in this Province. We undertake to champion this system in each department in the full belief that an effective PMS, well managed and efficiently implemented will inevitably lead to improved service delivery, to the benefit of all our citizens in our Province.”

Signature:

Date: 23/10/2002___

(v) Foreword

Since 1997, there has been a major shift in the focus of the South African Public Service towards transformation. A number of pieces of legislation, white papers as well as collective agreements have been passed to ensure this focus is not lost in the daily bustle and hustle commonly associated with large bureaucracies like government departments. Most notable of these legislative frameworks affecting organizational and individual performance is;

The White Papers on Public Service Transformation, Service Delivery Affirmative Action and Human Resources Management

The Public Service Act on Labour Relations (LRA), New Public Service, SAQA, Employment Equity and Skills Development

The Public Service Regulations (as amended) And PSCBC and other relevant resolutions

The shift in focus has meant that all levels or tiers of government have had to direct their energies in developing policies, systems and practices that seek to put delivery of service to the customer first, following Batho-Pele principles. The establishment of appropriate internal and external mechanisms for monitoring and evaluation will be central to the process of administrative transformation. Performance auditing and appraisal will be an integral part of this process (The White Paper on Public Service Transformation).

To ensure that all departments find effective and efficient ways of turning around the focus of each individual in the public service, the Limpopo Provincial Administration agreed to have a uniform PMS based on an adapted balanced scorecard approach for all its ten[10] departments. The system has the following characteristics:

Focuses on results or outputs rather than activities and processes; Administratively non-burdensome;

Developmental rather than punitive; and

Able to differentiate between employees who perform well and those who do not perform, in either case suggesting ways of rewarding or addressing performance gaps respectively

The PMS manual was developed and used to train all employees on the system. This portable manual is the latest version of a series of continuously updated editions, which guides all the employees on how to use the system. This portable edition explains concepts and other issues relating to the implementation of the system in simple and understandable terms.

DG, Limpopo Province.

(vi) Acknowledgments

A sincere word of gratitude goes to Simeka Management Consulting (SMC), which rendered technical assistance in developing and implementing the system. The Provincial Administration is also indebted to the Integrated Provincial Support Programme (IPSP) for their financial assistance in developing and implementing the system.

The Limpopo Provincial Government also thanks members of the staff for their comments and suggestions that continue to help sharpen many of the issues addressed in this manual.

PART A

THE PERFORMANCE MANAGEMENT

FRAMEWORK

1

The design and implementation of a

Performance Management System of the

Limpopo Province: An Overview

This section provides an account of the phases undergone in developing the provincial performance management system.

1.1 Phases of PMS design and implementation process

In realising the Public Service transformation imperatives, Simeka was, appointed in October 2000, through the Integrated Provincial Support Programme (IPSP), to design and implement a performance management system for the Limpopo Provincial Government.

SMC used a phased approach to design and implement the PMS: Phase 1: entailed a project start-up and communication; Phase 2: involved a system design and piloting in three Departments;

Phase 3: was about system refinement and production of first edition of PMS manual;

Phase 4: culminated in the province-wide PMS Implementation and

advisory roles; and

Phase 5: involved the project team handing over the project to line managers (in case of internal consultants like champions and PM committees) or to departments (in the case of SMC as an external consultancy);

Phase 6: reassessing the performance culture change following the full implementation of the system, revising the manual (2nd edition), evaluating PMS Communication Strategy and adjusting the Business Plans to Balanced Score Card format to enhance strategic alignment.

2

Introduction to Performance Management

• What is performance management?

• Why is a performance management system necessary? • What does a performance management system do?

• What are the main objectives of a performance management system? • What are the underlying principles of a performance management?

This section covers the following questions:

2.1 What is performance management?

Performance management is a process of harnessing all available resources within an organisation and ensuring that these perform to the maximum, in order to achieve the desired results. Performance management involves building processes, systems, culture and relationships that facilitate the achievement of organisational objectives.

2.2 Why is PMS necessary?

The Limpopo Province has a wide range of challenges to which it must respond. These include:

• Meeting the statutory and constitutional requirements in respect of service delivery;

• Addressing backlogs in a largely rural and under-developed province;

• Implementing its Provincial Growth and Development Strategy;

• Transforming an amalgamated public service from a rule-driven set of organisations into a developmental and transformative institution that promotes integration and co-operation at departmental and inter-governmental levels; and

• Re-engineering the public service to address changing needs and to ensure that government and the administration of service delivery are accessible to the people of the province.

The implementation of an effective performance management system would ensure that limited resources are utilised optimally in order to efficiently address budgetary limitations and inadequate inter-governmental transfers.

Effective performance management systems are built on the existence of a clear vision, mission and strategic goals indicating what the province and its departments need to achieve. The provincial’ performance management system is a systemic process of:

• Planning work , setting expectations and standards;

• Developing a highly skilled base of staff members who know what they should contribute and how they should go about making this contribution;

• Nurturing an organisational culture that strives towards excellent performance and service delivery;

• Continually monitoring performance; and

• Rewarding excellent performance.

2.3 What does a performance management system do?

Performance management provides the system and processes to put the above elements in place and to ensure that each staff member is clear about the important role s/he plays in the organisation and the achievement of organisational objectives.

At an individual staff member level, a performance management system allows for the following:

• Agreement to be reached on individual, team and departmental responsibilities and the linking of these with the overall goals of the department.

• The clear definition of areas of responsibility and determination of indicators against which performance can be measured

• Providing and receiving feedback on performance

• Recognition and understanding of levels of performance. For each department, team and the province as a whole:

• The drawing of clear links between what the department, teams and individuals do and the goals of the province as a whole

• Recognition of good performance

• Improvement of poor performance.

2.4 What is the main objective of a PMS?

The main objective of the system is to clarify and align broader organisational, departmental, team and individual efforts and expectations, thereby ensuring that energies are directed at achieving the Provincial strategic goals. This will ensure that excellent performance is recognised, rewarded and non-performance is addressed.

2.5

What are the underlying principles of a performance

management system?

The performance management system is developmental rather than punitive. It provides a clear and detailed framework for:

9 Agreement on performance contracts

9 Clear measures of agreed upon standards

9 A balance between organisational needs and employee rights

The system allows for joint responsibility and accountability based on mutual trust and respect and is cost-effective and practical as it enhances improvements in quality of services.

2.6

What does the legislation say about performance

management in the Public Sector?

The new Public Service Management Framework that includes amongst other legislation, the Public Service Act, 1994, as amended, as well as the new Public Service Regulations, came into operation on 1 July 1999.

The following points are integral to the policy and framework:

• The Public Service Commission developed and implemented a framework to evaluate Heads of Departments (HoDs) only, and they are required to sign a performance contract.

• The new approach to performance management for employees below management level is embodied in the amended Public Service Act and the PS Regulations of 2001 aim at employee development and empowerment, and not punishment.

The performance management procedures may differ, but the same principles should apply to all departments:

• An orientation towards results

• Focusing on training and development

• Rewarding good performance

• Managing poor performance and

• Adherence to openness, fairness and objectivity.

In the context of the new regulations, three salient points of the new approach to performance management are that:

• Each department will select its own system or model within the framework of the purpose and principles in the regulations, to fit its unique needs and requirements

• It embodies a shift from personnel appraisal, to a process-approach to performance management, encompassing the organisation, teams and individuals and

• The approach will allow for the development of under-performing individuals rather than take a punitive approach to under-achievers.

The policy framework, designed to transform the public service, is focused on improving service and is informed by the following mandates:

• Legislation such as the Constitution, the Public Service Act, 1994, as amended, Labour Relations Act, SAQA Act, Skills Development Act and the Employment Equity Act

• The various White Papers such as Transformation of the Public Service; Transforming Public Service Delivery; (Batho Pele); Human Resource Management; Affirmative Action; and Training and Education

• The new Public Service Regulations

• Relevant collective agreements.

• Resolution 2/1999

The Public Service Co-ordinating Bargaining Council (PSCBC) has adopted various collective agreements that inform aspects of performance management, and these include:

• Resolution 13/1998 on Performance Agreements for Senior Management from level 13 upwards and

• Resolution 2/1999 on Benefits and Allowances.

All of the requirements are included in the performance management system designed for the Limpopo Province.

PART B

THE PERFORMANCE

MANAGEMENT

3

What is the Balanced Scorecard (BSC)?

This section explains:

The context under which the balanced score card is used,

♦ What constitutes the Provincial PMS? What is a PM framework? What is a PM model?

♦ The four perspectives that form the pillars of the BSC?

♦ The four perspectives, which form the pillars of the Balanced Scorecard approach to performance management.

♦ The strength of the BSC

♦ How does the BSC help managers to effectively manage?

3.1 What constitutes the Provincial PMS?

Limpopo Provincial Government’s PMS comprises of a performance management framework and a model. Limpopo has adopted the balanced scorecard approach as a model that captures performance dimensions that will be measured.

The Performance Management framework links directly the departmental

vision and its strategic focus as described in the strategic plan, to the strategic goals of the province on the one hand; on the other hand, it also links the foregoing to individual performance or achievement. This it does by clearly showing what information has to be collected, how to collect it and when it should be collected.

The Performance model on the other hand is a tool that helps an

organisation to identify key performance dimensions which it wants to measure. This helps to align the focus of a department towards its vision. Within this Balanced scorecard model, this refers to the four perspectives and the KRAs within each perspective.

3.2 What is a scorecard?

The scorecard is a mechanism to try and pull together in a balanced way historically- based measures of organisational performance (like financial) and drivers of future performance based on the vision and strategic plan. The score card seeks to balance external measures of customer and stakeholder satisfaction with those of internal critical business success processes, innovation, growth and learning.

Some indicators are maintained to measure an organization’s progress toward achieving its vision; other indicators are maintained to measure the long term drivers of success. Through the balanced scorecard, an organization monitors both its current performance (finance, customer satisfaction, and business process results) and its efforts to improve processes, motivate and educate employees, and enhance information systems—its ability to learn and improve. The use of the balanced scorecard approach in the development of performance instruments is currently restricted to levels 13 and above. However, some lower level managers heading institutions and districts / regions may consider using the balance score card methodology to organise their key results areas (KRAs).

The balanced scorecard is a conceptual framework for translating an organization’s strategic objectives into a set of performance areas distributed among four perspectives. It is important to understand the number of questions that each of the perspectives seeks to answer for the betterment of the organisation. The following table outlines some of the questions that each perspective of the balanced scorecard seeks to answer in order to ensure all critical performance areas of the organisation are measured.

Table 1: The four perspectives of the BSC

1. Service Delivery 2. Financial

“To achieve our vision, how should we appear to our customers-the public?”

“To succeed financially in our accounting, how should we appear to our public-tax-payers”-PFMA belongs here.

3. Internal Business Process 4. Learning and Growth

“To satisfy our stakeholders, including customers, what business processes must we excel at?”

“To achieve our vision, how will we sustain our ability to change and improve?”

The process to be followed in grouping key result areas (KRA) into the balanced scorecard perspectives starts with:

• Setting objectives for each KRA;

• Setting targets to show performance improvement; and

• Identify initiatives to achieve measures and their targets.

The balanced scorecard gives managers information from four different perspectives. By minimising the number of measures used, it forces managers to focus on what is most critical.

3.3 The four perspectives which form the pillars of the BSC

approach of performance management.

The advantage of BSC is that it brings together on a single management report many of the disparate elements of an organisation’s strategic agenda. It also forces managers to consider the important operational measures together, thus letting them see whether improvement in one area was achieved at the expense of another.

The BSC translates mission and strategy into objectives and measures, organised into four different perspectives. Diagram 1 below presents a graphical description of the four perspectives.

VISION

Financial

Organisational processes Learning &

innovation Service delivery

• Accountability

• Cost recovery

• Affordability

• Linkages with financial allocations to service delivery priorities Internal and external client needs The Four Perspectives

Diagram 1: The four perspectives of the BSC

Level of service output Perceptions of services received Process and manner of service delivery Partnerships 1. Experimental or innovative programmes 2. Partnerships 3. Linkage

4. Systems efficiency – IT, HR, management, administration 5. Human resource development 6. Human resource administration 7. Recruitment and selection 8. Organisations development 9. Management development 10. Employment equity

The measures of the balanced scorecard are not merely descriptions of past performance. It is NOT a controlling system. The measures should be used to articulate and communicate the strategy of the organisation. They are also designed to help align individual, organisational, and cross-departmental initiatives to achieve a common goal.

So, what makes the BSC different from a mere collection of performance measures?

The Balanced Scorecard is much more like a “network” of linked performance measures. The strategy of an organisation is usually articulated around a set of cause-effect relationships. A well-built scorecard should reflect the intrinsic connections between each aspect of the strategy and each of the measures chosen to assess it. It balances and links financial and non-financial indicators, tangible and intangible measures, internal and external aspects, performance drivers and outcomes.

3.4 The strengths of the BSC.

Table 2: Summary of the strengths of the BSC methodology:

Strengths Strengths

(continued)

* Less linear and, therefore, potentially less mechanical than the excellence models which tend to prescribe what and how much should be measured for all situations.

• Integration of perspectives enables a more holistic assessment of performance in a department.

• Clearly links planning, measurement and management.

• Clearly links planning, measurement and management

• Relatively simple integrated model pulling from across a number of organisational performance drivers. It does not try to be comprehensive but seeks to capture key strategic objectives (key result areas) for purposes of management.

• The measures incorporated in the Balanced Scorecard are grounded in the organisation’s strategic objectives and delivery demands. Therefore this set of critical indicators helps the organisation focus its efforts on the strategic vision

• Relies on clear objectives and measures that are objective and reliable.

• Links between the perspectives can be used to diagnose performance problems.

• Forms the basis for staff management as well as organisational.

• The four perspectives of the Balanced Scorecard enable organisations to track financial management indicators while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they need for future growth. The Balance Scorecard then becomes the cornerstone of the organisation’s current and future success.

• Also, by balancing external and internal measures, there is no trade-off among key success factors.

• Has a strong emphasis on learning and development consistent with the developmental emphasis recommended in the PMS and

Strengths Strengths

(continued)

PMDS principles set in the DPSA

3.5 How does the BSC help managers to effectively manage

performance?

In light of the above and in conformity with the government’s thinking on transforming the Public Sector to utilise resources more effectively and efficiently, the Balance Scorecard seems to be a strategic management tool that can easily be adapted by managers to:

• Clarify and gain consensus about strategy;

• Communicate the strategy throughout the organisation;

• Align departmental and personal goals to the strategy;

• Link strategic objectives to long-term targets and annual budgets;

• Identify and align strategic initiatives;

• Perform periodic and systematic strategic reviews; and

• Obtain feedback to learn about and improve strategy.

3.6 Alignment of Management plans to the balanced

scorecard.

• To facilitate ease of strategic alignment, all management plans have been formatted along the BSC lines.

• The management plans are not included in this manual but should be referred to during all PM cycle phases.

PART C

IMPLEMENTATION OF THE

PERFORMANCE MANAGEMENT

SYSTEM

Departmental Management Plan Overall Outputs Fin Ser Del Org Pro

L

OPERATIONAL LEVEL

The operational level performance management framework describes the specific strategic choices made by a department, in order for it to be an effective services

provider, as well as an effective, efficient and transformed organisation.

INDIVIDUAL

ORGANISATIONAL

PRFORMANCE MANAGEMENT FRAMEWORK OPERATIONAL LEVEL

Senior Management Performance Agreements C O M P E T E N C Y P R O F I L E Management Performance Agreements Overall Outputs Fin Ser Del Org Pro

L

Directorate Management Plan

Fin Ser Del Org Pro

L

L

Diagram 3: Performance management cycle

22

Performance Management Cycle

Departmental strategic plan:

Objectives and measures of success Departmental Management plan Directorate Management plan Team Delivery plan

Individual performance plan: Performance agreements, work plans and standards frameworks,

competency profiles Planning and contracting ANNUAL

1

Peer / managerial review

– informal and formal

Customer review – where possible QUARTERLY

2

for next year

Identifying outcomes: • Performance improvement plan • Recognition • Non-performance measures Review of departmental / directorate performance Evaluating performance ANNUAL

3

Target

Performance measures describe what is

expected in terms of satisfactory

performance. They set the re

Diagram 4: Description of elements of performance measures

quired level of

The target sets a specific quality or quantity of performance within a specific timeframe.

PERFORMANCE

MEASURES

requirements of effective

performance

Standards

Indicators

Objectives are a statement of intent by an organization or an individual. They identify what outcomes or outputs are expected within a particular time frame

Indicators provide evidence that the standard has been achieved. They identify particular aspects of

performance that reflect success

Objectives and Key Results Areas

Key results areas describe focus areas of performance. A group of KRAs (usually 3-5) describe the overall function of an employee

24 Target • Framework finalized by 31 October 2000 • Identified stakeholders sign off on framework document • Curriculum presented in simple guide-book format, in four languages Diagram 5: Example of performance measures in use

Curriculum Development Comprehensive science

and technology curriculum framework developed in line with outcomes based requirements Curriculum framework covers all aspects of science and technology education required for Grade 10; developed in consultation with stakeholders and easy to understand

PERFORMANCE

MEASURES

Standards

Indicators

4

A Step-By-Step Guide: Developing the

Organisational PM Framework in line with BSC

• Develop a departmental strategic focus from the departmental vision.

• Translate strategic objectives into the four perspectives.

• Identify measures of success for each strategic objective

• Develop the departmental business plan

• Develop directorate business plans

• Develop team delivery plans

This section explains how to:

4.1 Introduction

The development of a performance system that requires the adaptation and alignment to the BSC follows a number of strategic steps that are interlinked and aligned. The starting point in developing a BSC approach to performance management is embracing a futurism stance. This implies the development and/or confirmation of the organisation’s desired future (vision) underpinned by the strategic level which has a 3-5 years focus. The departmental strategic focus is followed by the translation of strategic objectives into the four perspectives of the BSC as explained in chapter 4. The final step is identification of success measures for each strategic objectiv.

The organisational PM framework consists of two levels (the strategic level; and the organisational level):

• The strategic level is about ensuring that there is a clear vision, mission and focus areas guiding all long term to medium term direction of the department; and

• The operational level directs the short-term efforts of the department, its directorates, teams and individuals in the directions already set and agreed in the strategic framework.

The strategic level diagram shows how the balanced scorecard system allows for a clear relationship to be drawn between the vision and strategic focus or mission of the organisation, and strategic objectives which allow for certain

outcomes to be achieved. The vision and mission of the particular department are translated into strategic objectives via the four perspective areas .

At the operational level, the diagram distinguishes between organisational and individual levels and breaks these down into different levels of organisation (department, directorate, team) and levels of employee (ranging from senior management to support staff).

4.2 Developing the strategic level framework

At a strategic level framework, the BSC methodology, as with most performance management methodologies, requires the creation of a vision, mission statement, and strategy for the organisation. This ensures that the performance measures developed in each perspective support accomplishment of the organisation’s strategic objectives. It also helps enployees visualize and understand the links between the performance measures and successful accomplishment of strategic goals.

The key, as pointed out by the BSC methodology, is to first identify where the organisation wants to be in the near future. Set or confirm the departmental vision. Secondly, craft a strategy to realize the vision, and thirdly, develop measures that would indicate progress towards reaching the desired destination.

The following diagrams explain this process.

Table 3: Confirmation of the departmental vision

Focus Area Action Steps

Determine status of vision

• Conduct interviews and workshops with stakeholders (senior management, unions, staff) to determine whether there is agreement on the current vision of the department

• If necessary, discuss this at a departmental planning or review session

Confirm existing vision

• If there is agreement on the vision, stakeholders should measure it against the following criteria:

• Does it describe what the department wants to achieve in the next 10 years?

• Is it clearly informed by legislation and policy developed in the sector?

• Is it transformative in nature – does it describe a context different to the current reality?

• The vision becomes the starting point of the PM framework

Develop new vision If the vision does not exist or is strongly contested, conduct a visioning exercise in a representative forum, following these steps:

Conduct a SWOT analysis to determine internal strengths and weaknesses and external opportunities and threats.

Analyze the legislation and policy documents guiding the sector in which the department works to identify what should change.

Brainstorm on the kind of sector that stakeholders would like to see in 10 years time

Identify key words that need to be included in the vision.

Ask small groups to write up vision statements and present them to the group Develop a vision statement.

VISION

Informed by legislation and policy – long term interpretation of role

M

A

N

D

A

T

E

Step 1: Confirmation of the departmental vision

Step 2: Developing a departmental strategic focus

3-5

years

_STRATEGIC

• Environmental factors • Assumptions / risks Who we are What we do Who we serve

Table 4: Developing a departmental strategic focus

Focus Area Action Steps

Identify key factors • Use the current departmental mission statement (if there is one) as a starting point.

• Ask yourself:

Who is the department? What does it do?

Who does it serve?

Conduct an external review

• Undertake a SWOT1 analysis (if not done as part of the visioning exercise)

• Undertake a STEP2 analysis

• Identify risk factors that may be beyond the department’s control

Make strategic choices Based on the above inputs, answer the following questions:

Given the current context, what can we achieve in the next five years?

What risk factors will cause failure and how do we avoid them?

Will this bring us closer to achieving our vision?

What are the choices we need to make? Agree on the strategic focus through making specific choices about what the department will and will not do in the next five years.

1

A SWOT analysis examines the internal Strengths and Weaknesses of an organisation and the Opportunities and Threats it faces in the external environment

2

A STEP analysis identifies the Social, Technological, Economic and Political factors that may impact on an organisation’s success

Step 3: Translating strategic objectives into the four perspectives

Financial Service delivery Organisational processes Learning & innovation

PERSPECTIVES

Table 5: Translating strategic objectives into four perspectives

Focus Area Action Steps

Link existing strategic objectives to the four perspectives

• Clarify the meaning of each perspective, in the context of the department

• List all strategic objectives that have already been identified by the department (list all objectives even if they have been grouped under focus areas)

• Organise the objectives under the four perspectives. Ask yourselves, “Is this action primarily of a financial, service delivery, organisational process or learning & innovation nature?”

• In cases where the strategic objectives are linked to more than one perspective, list them under all relevant perspectives

Regroup objectives

• Take each perspective one by one – group the objectives that seem similar together

• Discard any statements that are shorter term objectives, activities or tasks

• Develop one strategic objective out of a group of similar objectives

• Identify no more than 3 strategic objectives under each perspective

Identify gaps • In relation to each perspective, ask:

• Have we identified all the critical strategic objectives within this perspective to enable us to achieve our strategic focus?

• What other objectives will be required to ensure that we are successful in the next 5 years?

• Identify any additional objectives

• Streamline the new objectives with the existing objectives to ensure that there are no more than 3 strategic objectives under each perspective

Check for balance

Read through all of the strategic objectives. Ask:

1. If we achieve each of these objectives will we

STRATEGIC OBJECTIVES _{• Assumptions}

• Enabling mechanisms

3 years

30

Focus Area Action Steps

achieve our strategic focus?

2. Is there sufficient focus on each perspective to ensure that there is a balanced picture of the department?

Step 4: Identifying measures of success for each strategic

objective

Table 6: Identifying measures of success for each strategic objective

Focus Area Action Steps

Link measures to each strategic objective

Take each strategic objective. Ask:

• How will we know that we have achieved our desired outcomes?

• What standard of performance do we want to achieve?

• What evidence will we need as proof of this achievement?

• Develop an agreed upon a measure of success for each objective

• Check the measure against the criteria for a good performance indicator

• Each objective may have more than one measure of success, depending on the nature of the objective

• Measures may be quantitative or qualitative in nature.

MEASURES OF SUCCESS

Financial Service delivery Organisational processes Learning & innovation

4.3 Developing the operational level framework

Table 7: Developing the operational level framework

Step Focus Area Action Steps

FOR EACH PERSPECTIVE Step1: Departmental Business Plan Identify overall outcomes within a one year framework

• In relation to each strategic objective within the perspective, identify the specific outcomes that can be achieved within the one year framework;

• Identify performance measures for each outcome. Ask:

• How will we know that we have achieved our desired outcomes?

• What standard of performance do we want to achieve?

• What evidence will we need as proof of this achievement?

• Test the measures against the criteria for good indicators

Identify

outputs within

Define actions that will contribute to the achievement of each objective

Overall Outputs Fin Ser Del Org Proc L& G Overall Outputs Fin Ser Del Org Proc L& G Fin Ser Del Org Proc L& G Overall Outputs

Team Delivery Plan / Scorecard Directorate Business Plan / scorecard Departmental Business Plan / Scorecard 1 year

Step Focus Area Action Steps

a one year framework

For each action identify a performance measure, according to the process outlined above

Set clear time-frames

Identify enabling actions that may need to be taken to ensure success, or partners that should be brought on board

Outline all resource requirements –financial, human and physical

Obtain approval for plan

Ensure that senior management endorse the business plan and reflect commitments on the budget

Allocate strategic objectives

Based on strategic objectives identified and organisational structure, allocate objectives across all chief directorates and directorates Ensure that all objectives are equally allocated and that there are none left unallocated

Step2: Directorate Business Plan

Develop plan Develop a business plan according to the steps outlined above

Check that there is no duplication across the strategic plans

Identify teams _{Identify natural work teams, or project}

teams, that require individual plans. These may be teams within the department or across other departments

Get agreement on which teams require specific plans and identify which strategic objectives they will contribute to.

Step 3: Team

Delivery Plan/ Divisional Plan

Develop plans _{Develop team delivery plans according to}

the workplan format

Identify key performance areas that the team will be required to deliver on – these are overall areas of performance

List specific actions or outputs required to achieve each key performance area

Set performance measures, according to the criteria listed above, for each output

Set clear time-frames

Identify enabling actions and partners

Identify any resources required by the team to enable successful performance.

4.4 Performance management cycle

The performance management cycle describes the various phases that the system moves through over the course of one year.

There are three main phases of the performance management cycle: Planning and contracting

Monitoring progress; and Evaluating performance.

In addition, the PM cycle incorporates system maintenance and development. The cycle is shown in the diagram 3 below and tables 9-11 on the other hand provide a detailed explanation of each phase. Provide a detailed explanation of each phase.

34

Departmental strategic plan:

Objectives and measures of success Departmental Management plan Directorate Management plan Team Delivery plan

Individual performance plan: Performance agreements, work plans and standards frameworks,

competency profiles Planning and contracting ANNUAL

1

Performance Management Cycle

SYSTEM MAINTENANCE

AND DEVELOPMENT

Self review

Peer / managerial review

– informal and formal

Customer review – where possible QUARTERLY

2

for next year

Identifying outcomes: • Performance improvement plan • Recognition • Non-performance measures ANNUAL Review of departmental / directorate performance

3

Diagram 3: Performance management cycle

Monitoring progress

Table 8: Description of Performance Management Cycle: Phase 1

PHASE Component Description

• Departmental Strategic Plan

• The strategic level performance management framework describes the specific strategic choices made by a department, in order for it to be an effective service provider, as well as an effective, efficient and transformed organization.

• The strategic plan consists of a vision statement, strategic focus statement and strategic objectives, and measures of success, in line with each of the four perspectives.

• Departmental Business Plan

• The operational level performance management framework describes how the department aims to achieve its strategic objectives through specific actions. It gives guidance to the work of the department for the year under review.

• Directorate Business Plan

• Business plans need to be in place for each directorate. These outline the areas of performance of each directorate, and which strategic objectives they will contribute towards. They describe the specific actions to be undertaken for the period under review.

Planning and Contracting

• Project Teams Plan

• Project teams

These teams are temporary and only exist for the duration of a project. It is crucial that project teams also monitor their own performance and those of individual members. Participation in project teams implies added tasks and these should always be reflected on the individual’s performance agreements / work plans. Existence of project teams also allows for formal peer reviews.

• Individual Performance Plans

• Each individual within the department, from the level of HOD downwards, will have a performance plan. This may take a number of forms, depending on the role that the person plays within the department. The various performance-planning tools are the performance agreement, the work plan and the standards framework.

• Each performance plan is accompanied by a competency profile, used largely

36 Table 9: Description of Performance Management Cycle Phase 2

PHASE Component Description

Monitoring progress

Self review Before the progress reviews and the performance evaluation take place, employees should review their own performance before meeting with their supervisors or team leaders. The self-review process will assist employees in jointly taking responsibility for their development. In addition, employees should begin to develop a reflective framework in which they evaluate their own performance on an ongoing basis. Peer / managerial

progress review

• Progress reviews ensure that feedback on performance is continuously shared between supervisors/team leaders and employees. These reviews may be provided formally or informally.

3. Informal progress reviews:

Informal reviews will enable supervisors / team leaders and employees to provide each other with performance feedback on a daily basis. Feedback will be provided on an ad hoc basis after work activities have been undertaken.

Formal progress reviews:

These progress reviews should be held at least twice, and preferably four times a year.

Comments made during these reviews and feedback received from internal and external

stakeholders will be documented. If there are changes to the general tasks or competencies, exerted by either the internal or external environment, the individual’s performance agreement / work-plan can be re-negotiated at this stage.

For practice purposes only and as a guide to performance trends, the use of rating scales is encouraged.

However, there should be no aggregation of the quarterly scores to contribute to the end of year score as the KRA do not

necessarily carry proportionate weightings every quarter. Any scoring results can only be formative at this stage.

Customer review

• If possible, feedback from customers should be incorporated into the performance review process. This may be easier to obtain from internal clients, or in relation to a section or directorate, rather than an individual. Where possible it should be used to provide a more holistic picture of performance

Table 10: Description of Performance Management Cycle: Phase 3

PHASE Component Description

Evaluating Performance & Managing Outcomes Identifying outcomes Performance Improvements Recognition and Corrective action

4. There should be consequences or

outcomes linked to the completion of each round of performance evaluation. These outcomes can be in the form of:

• Performance improvements

• Rewards

• Corrective action

• Performance Improvements

Performance improvements may be suggested where employees are performing well but require further training and development in some aspects of the job. This may be technical training linked to job activities or training focusing on behavioural patterns. Performance improvements will generally link with the department’s training and development policy.

• Recognition

Outcomes in the form of recognition may be linked to the Province’s Remuneration policy, but may also incorporate non-financial rewards

• Corrective action may be necessary due to two main outcomes:

Employees consistently perform poorly:

After several warnings and suggested performance improvement mechanisms, consistent poor performance on the part of an employee may be referred to Industrial Relations for disciplinary actions as stipulated by the Labour Relations Act.

Immediate supervisor’s consistent negative behavioural patterns during performance evaluation meetings:

Where employees complain of the immediate supervisor’s negative behavioural patters during performance evaluation meetings, the employees may refer the grievance to the appropriate directorate for attention.

PHASE Component Description Evaluating performance & Managing Outcomes • System Maintenance and Development

• The HRM section in the Office of the Premier plays a critical role in monitoring the implementation of the system, collecting data on the outcomes of performance evaluations and ensuring that consistency and equity apply in all cases.

• Once the system is computerised it will be far easier to store data and track performance trends.

4.5 What are PM Measures?

A critical component of any performance management system is the measures that are used to describe satisfactory performance. Many different words are used to describe measures – indicators, targets, standards, results, etc.

It is important to clarify exactly what we mean when we refer to ‘performance measures’.

The performance management system is making use of the following approach (see diagram 4 and 5 below):

Target

Performance measures describe what is

expected in terms of satisfactory

performance. They set the required level of

The target sets a specific quality or quantity of performance within a specific timeframe.

Indicators provide evidence that the standard has been achieved. They identify particular aspects of

performance that reflect success Objectives are a statement of

intent by an organization or an individual. They identify what outcomes or outputs are expected within a particular time frame Standards describe the requirements for effective performance. Standards consider both process and outcome requirements of effective performance

PERFORMANCE

MEASURES

Standards

Indicators

Objectives and Key Results Areas

Diagram 4: Description of elements of performance measures

Key results areas describe focus areas of performance. A group of KRAs (usually 3-5) describe the overall function of an employee

Target

Objectives and Key Performance Areas

• Framework finalized by 31 October 2000 • Identified stakeholders sign off on framework document • Curriculum presented in simple guide-book format, in four languages Comprehensive science and technology curriculum framework developed in line with outcomes based requirements Curriculum framework covers all aspects of science and technology education required for Grade 10; developed in consultation with stakeholders and easy to understand

PERFORMANCE

MEASURES

Standards

Indicators

Diagram 5: Example of performance measures in use

Curriculum Development

42

4.6 Criteria for a good performance measures (standards,

indicators, baseline and targets)

When identifying performance/indicators, it is firstly important to identify

WHAT we want to measure, and then to consider the criteria of a GOOD

measure.

When selecting an indicator, first ask yourself: ‘what do I want to measure?’:

Economy: how do actual costs compare with planned costs?

Cost and Efficiency: what is the ratio of outputs to resource inputs? Awareness: are the intended beneficiaries aware of the service?

Service volume / outputs: is the service available to the intended

beneficiaries?

Service take-up: are the intended beneficiaries actually receiving the

service?

Targets/milestones: what must be achieved by the end of a specified

quarter?

Capacity utilization: how effectively and efficiently will the resources and infrastructure be used in the attainment of targets in a specified quarter?

Quality: are we achieving quality standards and 'customer satisfaction'? Effectiveness: do actual outputs and outcomes achieve our intended

objectives?

Impact: what net improvement have we made to the quality of life of the

local community?

Equity/Fair Access: is the distribution of outputs, outcomes, benefits and

impacts equitable?

Once you have selected your measure, ask yourself if it meets the criteria for a ‘good’ measure. Is it “smart?”

S - Simple M - Measurable

A - Attainable

R - Realistic

5

Performance Planning and Contracting

This section includes:

• An introduction to Performance Planning and Contracting

• The different types of performance instruments (PIs)

• Criteria on who uses which type of performance instrument?

• Different parts of a complete performance instrument (PI)

• A step-by-step guide for developing an Individual or Team Workplans or Standards Framework.

• How to complete the forms for planning and agreements in the

5.1 Introduction

The development of Individual/team performance plans is a critical step in phase 1 of the performance management cycle. This phase of the PM cycle is shown by the shaded area in diagram 6 below. The planning and contracting phase in the PM cycle must always be informed by and drawn from departmental and directorate business plans or score cards. Individual/team development plans are the sole basis upon which an employee’s performance will be measured in each and every department.

44 Departmental strategic plan: objectives and measures of success Individual performance evaluation

1

year Identifying outcomes: • Performance improvement plan • Recognition • Non-performance measures ANNUAL Review of departmental / directorate performance

3

Performance Management Cycle

Planning and contracting SYSTEM MAINTEN-ANCE AND DEVELOP-MENT This Section in the PM Cycle

5.2 The different types of performance instruments

There are three types of performance instruments (PIs) that will be used for different levels of employees in each of the provincial departments. The three different types of performance instruments are:

I. Full Performance Agreements for sms members and other managers in charge of institutions and regions / districts;

I. Workplan type of memorandum of understanding on performance; and II. Standard framework type of memorandum of understanding of

performance.

5.3 Who uses which type of performance instrument?

As was described earlier, levels 13-16 require a full performance agreement in terms of the Public Service Regulations (as contained in the latest amendments).

Informed by the relevant Public service regulations (PSR), 1998, 2001 and any later amendments as well as other best practice criteria, the following guidelines directing who should use which form of Performance Instrument have been given;

Senior management service (sms) (13-16) and other lower level managers (mostly middle managers) in charge of institutions like hospitals, colleges etc, regional and district offices conclude a full performance agreement. These employees must reflect all four perspectives in their PIs as they are responsible for the holistic well being of their institution, district, region, directorate, branch or department as the case may be.

Most middle managers and other staff members whose jobs are not repetitive or routine or do not put them in charge of a lot other staff and resources should use the workplan. Project managers and other staff whose tasks have a specific start and end point must use these workplan types of memorandum of understanding on performance. Staff whose tasks are repetitive and those whose performance are governed by pre-determined professional standards, must use the standards framework type of memorandum of understanding on performance. These standards may be pre-set by professional bodies, equipment manufacturers or for that matter, between employee and the supervisor during the conclusion of the planning and contracting phase. Such staff could either be high level professionals or lower level employees. The key issue here is that they perform work that is task oriented and repeats itself over time, always seeking to keep to very clear performance standards all the time, and not based on a start-end basis.

5.4 The Parts of a Complete Performance Instrument (PI)

Each of these three performance instruments are made up of 4 parts, namely;

46 This generic performance agreement sums up the employee’s identity, the

context and spirit of performance expectations, roles, limitations, commitment, modalities and outcomes for the whole PI. An example of this part of the performance instruments is shown as annexure 1. This part of the performance instrument applies to all employees irrespective of their level or job specialisation. As such it will be found at the start of each PI, regardless of type.

Part B: The Performance Plan.

The performance plan details in tabular form all the employee’s performance outcomes, performance dimensions (KRAs), outputs, targets and resource requirements. The performance plan constitutes 90% of the priority or weight of the whole performance instrument. This % may vary from year to year but it must be determined and communicated centrally at the start of the year. See attached format 1. The performance plan is the first part of the performance instruments that must be measured in the performance management cycle.

Part C: Competency Profile.

A competency profile describes the employee’s current competences and seeks to relate them to the employee’s job competency profile. In this regard, an employee’s competence must be identified first, and the level of each of the employee’s competences presented on a scale of 1-3, where 1 is the lowest and 3 the highest. The competence level indicated by the employee is compared with the level of competence required by the employee’s job (if that competence is a requirement on the job). Where the competence listed by the employee is applicable for the job, the difference in levels determines whether that competence should be developed further or left alone as adequate. Where the competence level profiled by the individual is lower than that required by the job that competence must be listed in Part D below as a development during the current performance cycle. It must be emphasised that the competence profile does not get measured during the performance measurement process but rather it sets a baseline form which planning and measurement of the acquisition of future competences must take place.

Part D: Competence-based Individual Development Plan.

The competence-based individual development plan seeks to address identified competency gaps from the competency profiling exercise. A competency based individual plan is the second part of the performance instruments that would be measured during the cycle of the performance management cycle. The competency based individual development plan constitutes a pre-determined weight as well e.g. 10%.

5.5 About Competences

Competences to be profiled have been divided into three parts. They have been split in this way in this edition to minimise the practise where most employees have been listing the same competences as if they all came from one directorate and did the same type of jobs and had the same career destination. The three sections are;