Performance Assessment of Managers in Government Departments: briefing

PUBLIC SERVICE AND ADMINISTRATION PORTFOLIO COMMITTEE
8 May 2002
PERFORMANCE ASSESSMENT OF MANAGERS IN GOVERNMENT DEPARTMENTS: BRIEFING

Chair: Mr. J Gomomo (ANC)

Documents Handed Out:

Briefing by Director-General Mr Ramaite
The DG stated that the objectives of the presentation was to present an overview of the state of performance management in the public service and the implementation of a new performance management and development system (PMDS) for Senior Management Service (SMS). The DG reflected that before amalgamation and rationalisation in 1994, there were different Performance Management systems according to various authorities.
The major reforms came in 1999 with the new management framework which ensured the devolution of management of departments to the political and administrative heads of departments. Here he also noted that the 'one size fits all' approach had been abandoned. Each department had been allowed to develop its own HR policies & systems, within a framework of uniform norms and standards.

State of Performance Management in Public Service
The DG referred to the state of performance management where he noted that a survey conducted by the department indicated that: nine out of 34 national departments had started implementation of systems for staff below the senior management service (SMS).
One out of nine provinces had started implementation of the programme. Positively, only three national departments and two provincial departments have not made some progress in developing their own performance management systems.

The DG highlighted three levels of problems and challenges facing the department. These were performance management specific issues, organisational as well as environmental issues. He briefed the committee about the performance and development system (PMDS) for SMS. Here, he referred to a review of the old performance management system for SMS.

As part of the SMS initiative, the department has embarked on a review of old Performance Management (PM) for SMS. The review took place against a background of the following realities. The Performance Assessment system was only introduced in 1998. The PA was not compulsory although there were disincentives for not undergoing it like the fact that salary increases and cash bonuses of managers was dependent on performance in accordance with it.

The findings in this regard revealed strengths and weaknesses. The strengths include that a shift had taken place from a fixation on processes to delivery of outcomes and outputs; secondly, the insistence on achievement of tangible results had resulted in the improvement of management information systems.

The weaknesses include that performance agreements have not been reviewed annually. Secondly, PA systems were not part of the integrated performance management process.
Often, there were no consequences for poor or excellent performance.
The main causes here were that the planning and performance cycle had not yet been fully synchronised, there were gaps in the policy framework.

The DG briefed the Committee on objectives of the new PDMS for SMS. These are linked to the overall objective of SMS of improving attraction, retention and development of high quality senior management and professionals and also to provide a framework for performance management and development.

He pointed out that the key features herein are:
-It is strongly results based
-Clear guidelines for linkages to pay progression and reward
-It is simplified and lastly;
-Performance significantly above expectations to be considered for cash bonuses

The pay progression system provides that (1) all members of the SMS are eligible to be considered for performance related pay increase (package progression) on a bi-annual basis provided that their performance is evaluated to be fully effective.
He also pointed out that they also need to have signed a performance agreement. The assessment rating of 65% or higher must be achieved over the last 12 months of the performance management cycle. He further pointed out that the first pay progression can be effected from 1 April 2003-depending on performance in 2002/03. Lastly, he added that future progression cycles will run over 24 months commencing on 1 April of a particular year.

Discussion
Mr. M Kgwele (ANC) commended the department for the report. He asked for clarity on two issues, (i) capacity constraints and (ii) development of personal development plans (PDP).

A member asked how personal performance was linked with organisational performance? Secondly, regarding policy gaps, what was the unacceptable situation?

Mr. B Douglas (IFP)-asked if the performance agreements were prescriptive and secondly, what happened to those who under perform, were they transferred to other departments or were they expelled?

On the first question, the DG pointed out that the department negotiated with donors to finance the development of such systems. He noted that last year he went around the provinces and held workshops with Human Resource Managers in the public service and accordingly identified capacity problems to be addressed. On the issue of PDP, he pointed out that the new performance management system prescribed this, even for high performing individuals.

On the issue of policy gaps, he noted that this was mainly about the frequency within which the assessment was carried out and this he noted, needed to be rectified.
On whether the performance agreements were prescriptive, he noted that the underlying tenet of the system was that it was mandatory, therefore, it could be said to be compulsory. He also pointed out that those who underscore would naturally have to be relieved of their duties.

Appendix 1
Report on the assessment of the state of readiness of departments to implement new performance management and development systems for
staff on levels 1 to 12~ as at 31 May 2001

1 INTRODUCTION

Service delivery imperatives and the quest for improved performance in the Public Service led to the requirement that departments in the national and provincial spheres of government had to have new performance management and development systems (PM DS1) in place by 1 April 2001. Another factor that impacted on performance management in the Public Service was the development of proposals for a new pay progression system, a system that is intended to be based partly on performance.

A thorough assessment by the Department of Public Service and Administration (DPSA) spanning the period March to May 2001 indicated that, by and large, departments were unable to meet the regulatory requirements by the required date. Nine national departments and one province have started implementing their new systems. Even in those cases where implementation is taking place, it is too soon to tell to what extent these systems have actually resulted in improved individual, team and organisational performance.

Despite the above, and what appears to reflect a negative scenario of performance management in the Public Service, the past three years have nevertheless seen a remarkable growth in the understanding of the new paradigm of performance management and development that needs to be instilled in the Public Service. This is highlighted by the fact that only three national departments and two provincial administrations have not made significant progress towards the development of new systems. The way forward requires the identification of those departments that most need capacitation and assistance, and determining the appropriate remedial action.

2 METHODOLOGY
This Report is an output of an internal project of the Employment Practice Unit in DPSA. The methodology included research and analysis by various means. In December 2000 interaction commenced with departments and provinces. During the period February to May 2001, performance management workshops were held in all the provinces except the Northern Province, but staff from this province attended two workshops on the issue in Pretoria, where the required information was submitted. Following the establishment of a 'performance management learning network" for departments in the Public Service, a national workshop on performance management was held in Pretoria on 21 May 2001, where all but three national departments and six of the nine provinces were represented, and information was shared on progress, challenges and the way forward.

A major survey was also conducted by means of a questionnaire sent to all departments. The results of the information that came out of the completed questionnaires were analysed in two reports, submitted in March and April 2001.2 Before and after the questionnaire, departments were visited, and consultation and verification was done by telephone and e-mail communication.

The methodology in the unit also involves research. Research is being conducted both pro-actively and re-actively. The pro-active research involves issues that are deemed to be of importance, and include focal areas that have up to now not received sufficient attention in the Public Service. These include issues such as performance management benchmarks, and the measuring and rewarding of team performance. The re-active research focuses on specific issues that have been identified by both the DPSA and external clients in the process of developing their departmental systems. Included in this category are issues such as the drafting of performance standards and indicators, approaches to the granting of performance related financial and non-financial incentives, and the linking of performance to pay systems. As part of the process presentations were made to a number of departments.

3 CURRENT STATUS OF PMDS IN THE PUBLIC SERVICE

3.1 Mandates and regulatory framework for performance management
The authorisation for and general contents and thrust of departmental performance management systems derive in varying degrees from the following sources:

Acts of Parliament The Constitution, 1996
The Public Service Act, 1994
The Labour Relations Act, 1995
Skills Development Act, 1998
Basic Conditions of Employment Act, 1997
Employment Equity Act, 1998

White Papers Human Resource Management, 1997
Transforming Public Service Delivery, 1997 (Ba tho Pele)
Public Service Training and Education, 1998
Transformation of the Public Service, 1995
Affirmative Action in the Public Service, 1998

Regulations Public Service Regulations, 2001 Treasury Regulations, 2000

Collective Agreements PSCBC Resolution 13 of 1998 (performance agreements)
PSCBC Resolution 3 of 1999 (financial rewards and incentives)
PSCBC Resolution 7 of 2000 (rank/leg promotions & pay progression system

Part VIII of Chapter I of the Public Service Regulations, 2001, serves as the primary guide to departments in developing and implementing their departmental performance management systems. As such, the Regulations contain only a minimum of guidelines for departments. In so far as principles are concerned, the Regulations require that departments should manage performance in a consultative, supportive and nondiscriminatory manner in order to enhance organisational efficiency and effectiveness, accountability and the achievement of results. Consistent with these principles, each executing authority must determine a system for performance management and development for employees in the department who are not members of the SMS. The thrust of performance management should be developmental.

With regard to assessment, an executing authority may establish separate performance assessment instruments for different occupational categories or levels of work; but when assessing an individual employee, a single assessment instrument should be used in order to assist in deciding on probation, rewards, promotion and skills development of the employee.

Two important regulatory requirements are the following:

Before utilising a performance management system, an executing authority should:

-pilot the system on groups of employees in all occupational categories sufficient to enable reasonable validity; and
-consult with employee organisations in the department.

The Regulations provide that, if the departmental budget and the medium-term expenditure framework provide adequate funds, a head of department may establish a financial incentive scheme for employees or any category of those employees. The Regulations also provide that, if an employee makes a suggestion, improvement or invention of exceptional value to the department or the Public Service as a whole, the State has the right of use of any such suggestion, improvement or invention; and the executing authority may reward the employee through any non-monetary reward; and/or a non-pensionable cash award.

One of the major issues confronting departments in the development and finalisation of their performance management systems, was the impact of PSCBC Resolution 3 of 1999 on the development of departmental financial incentive schemes, and on notch increments and merit awards. Resolution 3 of 1999 determined in paragraph XXXV that the "current dispensation on merit bonuses and other forms of recognition of outstanding performance, innovations or achievements shall remain in force until the narties negotiate, in line with the requirements of the Labour Relations Act, 1995, a new agreement on the topic." Another collective agreement, Resolution 7 of 2000 determined that the "present rank and leg promotion system shall be terminated by lst July 2001 or earlier if a new pay progression system is agreed to before that date."

These collective agreements had a restrictive effect on the development of departmental performance management systems. The Regulations vested the authority for the adoption and implementation of a new departmental system in each executing authority. On the other hand, however, integral elements of the new systems relating to the granting of benefits and awards were subject to collective agreement.

3.2 Assessing the state of readiness to implement new Systems
Assessing the readiness of departments to implement new systems may be contentious. Nevertheless, an attempt was made to identify critical issues and elements against which departmental progress could be benchmarked. These included the stage of development, approval of the policy, consultation with employee organisations, readiness to implement the system, elements of the (draft) policies and systems, the developmental focus of the system, the development of performance measures, standards and indicators, the recognition of team work (and its assessment), and recognising the importance of assessing organisational performance and effectiveness.

Linked to the assessment, a ten-point scoring system was applied for the purpose of illustration and comparison. If a department had commenced implementation, a mark of ten was awarded, without pre-empting an assessment of the functioning of the system, which can only be done with a measure of accuracy after one full twelve-month cycle.

Assessment Points
Not yet started 1-2
Research phase 3-4
Consultation phase 5-6
Pilot phase 7-8
Implementation phase 9-10

3.2.1 The national departments
3 Communications; Prov and Local Gov
4 Arts, Culture, Sc & Tech
5 Justice, Sport & Recreation, Office of the PSC, SAMDI,
6 Home Affairs
7 Env. Affairs & Tourism
8 SANDF, GCIS, Housing, SAPS/Safety & Security, The Presidency, Trade & Industry, Water Affairs & Forestry
9 Agriculture, Foreign Affairs, Independent Complaints Directorate, Public Enterprises, Statistics SA
10 Correctional Services, Education, Labour, Land Affairs, Minerals & Energy, National Treasury, Public Service and Admin, Social Development, Transport

Appendix 2

Departments have had the opportunity to work with performance management arrangements for the SMS since the introduction of performance agreements in 1998. Based on an assessment of these experiences, DPSA has developed a more comprehensive and integrated performance management policy framework in the form of a chapter of the SMS Handbook. This particular chapter attempts to integrate and consolidate information that was previously scattered across different circulars and guides. It also attempts to fill in various gaps identified by DPSA and departments.

By providing for a higher degree of uniformity in performance management and development for the SMS, the DPSA hopes to foster greater consistency in assessment processes and ultimately, to impact positively on productivity and service delivery. The new system should also assist in retaining competent SMS members, by providing for a clear system of package progression and performance rewards. At the same time, direct links are made to incapacity processes in the event of a SMS member failing to perform according to expectations.

Another feature of the system is the link to the recently introduced SMS competency framework. The assessment of all SMS members will henceforth include core management criteria, which are aimed at ensuring that SMS members pay sufficient attention to their managerial responsibilities without sacrificing the output orientation that has been introduced by performance agreements.

How does the new system differ from the previous one?

The following table summarises the similarities as well as differences between the old and the new performance management framework:

As indicated above, many of the positive elements of the previous performance management framework have been retained. At the same time a number of new elements have been added, which should assist in managing performance more effectively in future.