Reconfiguration of government; Performance Management & Development System effectiveness; PSC Commissioner vacancy, with Minister

Public Service and Administration, Performance Monitoring and Evaluation

11 September 2019
Chairperson: Mr T James (ANC)
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Meeting Summary

The Committee was briefed by the Public Service Commission on the evaluation of the effectiveness of the Performance Management and Development System in the public service. The presentation highlighted the following challenges: a lack of capacity to roll out the system effectively, departments give little attention to performance agreements, in some cases no agreement was entered into at all, little feedback with regards to training, no platform for communication sharing, performance assessment meetings were not taking place quarterly, Senior Management Service members received bonuses when the Department has failed to reach its targets, lack of consequence management and the reduction of an employee’s scores to stay within the departmental budget.

The Committee raised concerns on the power of the Commission to ensure the implementation of its recommendations. It was asked if a new policy would replace the existing one or whether the existing one could be rectified. Members raised concerns of a lack of consequence management, favouritism, standardisation of performance bonuses and whether the Commission has engaged with the members of the executive of departments. Members raised the concern of departments who pay out performance bonuses but have not met all of its set targets. It was asked what the time-frame will be for the phasing out of monetary systems and what reward will replace the current financial incentive.

The Committee was briefed by the Department of Public Service and Administration. The Minister was in attendance. The presentation highlighted the processes underway to reconfigure government. Some departments have been split and others have been merged. The agreement between the Department and organised labour in terms of the transfer of employees is being finalised. There has been an increase in the number of deputy ministers. The current challenge for the public administration is around delivering more and better with less. Societal needs of the people must be met in times of tighter budgets. The issue of red tape is present in the business world as much as it is present in the public service world and these issues need to be addressed going forward. The stabilisation of the state is a major priority. One of the biggest challenges that needs to be prevented is support services.

The Committee raised concern about the increase of the number of deputy ministers and asked what legislative framework assigns powers to them. Members asked whether the reconfiguration process was being done internally or externally and whether costs would be incurred. Members raised the concern of the Public Service Commission not possessing the power to enforce the implementation of its recommendations. Members asked how the reconfiguration process would impact other spheres of government such as the provincial and local levels. Members also asked for more clarity on the timeframes of the reconfiguration process and if there would be a job reduction given the size of government.

Meeting report

Opening remarks by the Chairperson
The Chairperson greeted Members of the Committee. He said that the Performance Management and Development System (PMDS) in the public service is a challenge facing public servants in terms of the alignment with strategic plans in respective departments. Some employees are of the view that the system is objective while others say it is subjective. The former Minister of the Department of Public Service and Administration (DPSA) and the Minister of Finance have announced the phasing out of performance bonuses in 2021. Government needs to create a better system to manage individual performance.

Briefing by the Public Service Commission

Ms Moira Marais-Martin, Commissioner: Public Service Commission, greeted members of the Committee. She said that the PMDS must be looked at in the context of the State of the Nation Address (SONA) where the performance of the state was highlighted as an area of concern. The context of the National Development Plan (NDP) is also important. The intention is to ensure there is a capable state. On the methodology to assess effectiveness, six departments were selected. There were challenges in that some Senior Management Service (SMS) members were not available for interviews to be conducted. It was found there was a lack of capacity to roll out PMDS effectively. There was a limitation in terms of what employees can do relating to the quality of performance agreements and links between agreements and objectives of a department. On the Department of Basic Education (DBE), it was not given much attention and there was very little feedback with regards to training. The same applies to the Department of Health (DOH), Human Settlements (DHS) and Transport (DOT). It was found there was no platform for communication sharing.

Ms Marais-Martin said Human Relations (HR) grievances are brought to the PSC where employees either say no agreement was entered into or performance assessment meetings were not taking place quarterly. One of the objections from an employee was that all quarterly reviews were done on the same day. There were instances where SMS members receive performance bonuses even though the department overall was not reaching its objectives. This disjuncture can’t take place where a department spends all its money but has not managed to reach its targets. Greater attention needs to be given to the separation of bonuses. The grievances brought to the PSC stem from an incorrect implementation of the policy. Departments were applying the policy incorrectly by changing the scores of employees. They would reduce scores of employees to stay within the budgeted amount and this is wrong. If an employee has done well, their score can’t be reduced. Departments must have mechanisms in place to know how to manage its budget in respect of incentive rewards. There is an ongoing discussion between the PSC and the DPSA to address these challenges. The system needs to be implemented in an objective and accountable manner. The lack of consequence management makes it difficult to deal with deviations and inconsistencies. The PSC is working with SMS members to change the attitude towards the system.

The Chairperson asked for members to raise questions.

Discussion

Ms M Ntuli (ANC) asked what criteria was used to select the chosen departments. What is it you wanted to achieve by picking those few? On capacity to roll out and the formula provided in the presentation, what ratios are supposed to be in place? On the ratios given, how does it affect the whole work of the public service? It is good that the presentation picked up on the rating of employees according to favouritism. A living example of favouritism is where a director doesn’t assign any tasks to an employee. The employee is paid by the government for the whole year without having any tasks assigned to him. How is that person going to be rated? Employees expect to do work. Do you have any means of getting into the bones of departments to see what is happening?

Ms Ntuli asked if the PMDS is linked to the skills audit. On the audit outcomes of departments, what measures are put down? Are there any departments you can work with? If it is picked up that a department is not doing well they must be assisted. How do you assist them? The Committee wants to see all departments doing well so that people on the ground will have joy. Performance management is sacrosanct. The DPSA is the custodian of the Human Resource Management (HRM) framework. On the merging, what happens with senior management? Are you looking at crafting a new organogram?

Mrs C Motsepe (EFF) asked why the PMDS is not working. Will there be another mechanism to replace this policy? How sure are you the new policy will be better than the previous one? Rather than starting a new one, why don’t you rectify the existing one and intensify it? On incidents of rating above the norm, who was supposed to look after the rating before and after it happened? What were the consequences in previous years?

Mrs M Clarke (DA) asked how many departments do not have policies in place. When weaknesses of employees are discovered, is there any form of action to cater for upskilling? On the standards of performance bonuses across the board, have those standards now been put in place? There’s a huge contradiction when it comes to performance bonuses. Employees who do really well don’t receive bonuses and those who do not do well do receive them. On the phasing out of monetary systems, when will that be happening? What is the time-frame? What effect will it have on the reconfiguration of government? What financial impact will it show? Departments spend their budgets in full and bonuses are paid out but their Key Performance Indicator’s (KPI’s) are very low. This is a concern that needs to be dealt with urgently.  

Mr L Schreiber (DA) noted the ratio of staff versus employees. What is the recommended ratio? Can more clarity be provided on the phasing out process? The aim is to take away incentives to lie and cheat on scores. Is there something else it will be replaced with? Will people still use the system if there is no financial reward? Is there some kind of social reward? On standardization, do you have a way to ensure there is something standard in place when people are assessed? It is a concern where a department’s entire budget is spent but it has not met its targets. It is illegal when someone manipulates the system for favouritism. This speaks to a lack of consequence management and lawlessness is a result of this. Who is supposed to implement the recommendations? The presentation of recommendations to a department is not good enough. The Committee has a role to make sure recommendations are followed through. There is either weak, watered down or no consequence management and this makes it difficult to know who is responsible. Members need to know there is someone taking tough, firm and responsible action.

Mr S Malatsi (DA) said there is work done to compile recommendations so that it filters through to implementation. Once the recommendations are submitted, the implementation thereof lies with the body who was found not to be doing their work. What role does the PSC play in ensuring there is proper tracking of its recommendations? On the selected 6 departments, were you able to establish whether the absence of performance agreements with members of the executive correlate with the absence of consistencies in measuring performance outcomes and payment of incentives? On the payment of incentives, has there been compliance with measures? There were issues raised on the unreliability of information given the lack of consistencies regarding the scores of employees.

Mr B Maneli (ANC) said there needs to be controls. The Committee needs to know the consequences of a situation where there is a possible loss of funds due to people unduly receiving bonuses. More importantly there needs to be controls to protect those who do perform. Is it appropriate for a developmental state to continue to look purely at audit outcomes as a way of incentivizing people for performance? A department may receive an unqualified report with no findings but their set targets have not been met. The departments sampled in the presentation are service delivery departments. The presentation emphasizes unqualified audit outcomes but this may be incentivizing non-performance. A department may be working hard to satisfy its audit but has it delivered? On capacity, some departments are quite technical. How do you align the parts mentioned in the presentation? Have you considered multidisciplinary teams and training instead of just HR?

Ms R Lesoma (ANC) said the Public Service Commission Act allows the PSC to engage with the Executive Authority (EA) of a department. Have you had any meetings with EA’s and what was their response? If the Auditor-General report finds there has been a regression, the issue may lie with the EA’s and Director-Generals (DG’s). On the overflow of work coming from the PSC to the DPSA, what is the relationship between these 2 bodies? The Minister might assist on this one. The PSC is empowered to make recommendations. Are its recommendations taken seriously by EA’s? What is the attitude of the DPSA towards the phasing out of performance bonuses? The Committee should invite the Department of Public Works (DPW) to brief members because it outsourced its core mandate but still fails to achieve it.

Responses

Ms Marais-Martin replied that the six departments were selected because they are critical service delivery departments. One of the criteria that were looked at was how well the Department is performing. If an employee is not being allowed to do productive work, it means that such performance cannot be realistically assessed. Such person has recourse to lodge documents because he is being victimized and not being used productively in the system. On the link between the PMDS and the skills audit, it starts with the recruitment process. An advertisement is placed in a newspaper and departments must stick to the criteria stipulated in the advert. When the person is in the position and the department has identified weaknesses then that person must be upskilled. It is part of the department’s plan to ensure the person gets necessary training. How do we assist departments? The grievances received stem from an incorrect application of the system. There have been several workshops on this. The PSC reports to the Committee to indicate whether the system is working or not and the Committee decides to intervene by holding departments accountable and responsible. The PSC reports to Parliament.

Ms Marais-Martin replied the recommendations point out gaps and weaknesses. Thereafter a discussion is held with the DPSA. Where officials are not implementing the policy as intended, it means the policy must be amended itself. The PSC has asked the DPSA to consider reviewing the policy. There are several departments who don’t have internal policies in place but there is an overarching policy of which the DPSA is the custodian of. Departments cannot step outside of the broader policy. This ensures there is uniformity across the system. Some departments feel they don’t need a policy because everything they do is in terms of the overarching policy. On standardization, those standards are in place as part of the performance assessment framework. There are descriptors which people will interpret in their own way. The issue of setting targets so low so that it is easy to achieve is a challenge across the board. The challenge is measuring performance objectively. The issue of whole budgets being spent and targets not being met is a concern. This speaks to how the Auditor General of a department has managed the auditing process. Right at the beginning they would audit the financial performance and this became a mechanical thing. The question of whether they got value for money was something only added on later.

Ms Marais-Martin replied the system is beginning to address the challenge of receiving an unqualified audit without having delivered. On its recommendations, it engages with EA’s and departments. It is in the process of sorting out its own system to ensure its recommendations are taken seriously. For example, by being more robust and demanding reasons as to why a department hasn’t implemented its recommendations. This is a challenge for the PSC. It doesn’t deal with performance agreements of EA’s because those get entered into at a different level. The Premiers hold the Members of Executive Council to account. On compliance with measures, it is fixed what a department is allowed to spend on rewards. The challenge is for them to stay within that margin. On controls and consequence management, if a grievance comes from an employee, the PSC indicates to the department they have victimized an employee and such employee is entitled to be rewarded. Other solutions such as de-linking performance rewards will begin to solve some of these problems. How does the PSC engage with EA’s, DG’s and departments generally?

Ms Lesoma replied it was not a question but more of a statement to be taken by the Minister.

Ms Marais-Martin replied the PSC agrees with her on the proposal to invite departments to brief Members.

Ms Kholofelo Sedibe, Deputy Director-General: Leadership & Management Practices: Public Service Commission, replied the PSC doesn’t have a prescribed ratio. HR components don’t have the necessary expertise to understand the mandate of a department. Their ability to advise is therefore limited. HR employees need to be capacitated so they play a strategic role rather than an administrative one. As long as they don’t have the right attitude towards the policy, HR will not understand the technical mandates of departments. There is a need for the implementation of the revised policy to be accompanied with training. The new system makes it mandatory for departments to moderate performance agreements. Moderation is time consuming but it will provide the results members are looking for. It is important for the DPSA to ensure departments implement moderation. It will comprise of senior management and HR. The over-allocation or under-allocation of work will then be picked up right at the beginning of the year.

Mr Edward Mchunu, Minister: Department of Public Service and Administration, replied that the Department is grateful for the work the PSC does. The issue of enforceability is not a concern. To govern the world by authority will be destructive. The private sector is competitive and this makes it very hard for the public sector. As it stands, the PSC doesn’t have authority to implement its recommendations. This doesn’t mean they are undermined. It is good to explore innovatively rather than simply replacing the PMDS. It should be strengthened and made effective. The system requires monitoring so it does cause constrain in terms of warm bodies. The human factor is an issue because of subjectivity. The system is objective and tells a person what to do and then that persons uses it to promote his friends or to get money. The system is vulnerable and innovations had to be created to limit these situations. On bonuses, the Department wants to add “subject to conclusive discussion with Labour” to the statement made in February. Public pronouncements must be made with caution and subject to discussions with Labour. On the 20th of September, the Department is going to look at the issues of bonuses, its impact on conditions of service and possible solutions. In 2017, Cabinet made a resolution of how to evaluate and assess DG’s because it is a space that is less regulated. If there is less reliance on monetary remuneration as an incentive for higher performance then other factors must be looked at. Incentives will always be part of the system. The basic principles of the policy won’t be replaced.

Mr Richard Levin, Director-General: Department of Public Service and Administration, replied that the organisational culture must be a public interest one and it must be reflected in the PMDS framework. Employees must achieve a balance between serving the nation and serving their own personal interests. Certain individuals find themselves marginalized in the workplace. Each department must use the framework to come up with their own system. What is also missing are evaluation panels who bring in technical expertise to assess whether people are performing. In measuring excellence in public service, a stretch of time must be given before you can see an impact.

Briefing by the Department of Public Service and Administration

Mr Mchunu said the presentation contextualises the mindset of moving towards a developmental state. It compares South Africa with other governments and countries in the world. It highlights areas where there have been changes in the size and direction of government. There was a broadening of government at some point and there are lessons to be learnt. The Department will continue to make proposals for the next 5 years in line with the President’s leadership. The emphasis is on driving a process that delivers as opposed to driving a process that will only deliver at the end. There needs to be a functional government now and not only in September when issues are looked at.

Mr Levin said the presentation focuses on the reconfiguration of government, practical ways in which the process is being managed and the progress in terms of timelines which have been set. The vision of the NDP cannot be achieved in the absence of good governance. The current challenge for the public administration is around delivering more and better with less. Societal needs of the people must be met in times of tighter budgets. The issue of red tape is present in the business world as much as it is present in the public service world. This needs to be addressed going forward. Different administrative reforms require capacity, sustainability and maturity around the implementation. The fiscal crisis has reinforced the relevance of public service and administrative culture is important to determine the operation of principles. There must be an investment in the capabilities of public servants. In east Asia, they have developed the art of partnerships. The relationship between government and its people is critical in redesigning the state.

Mr Levin said there has been a process of reviewing the reconfiguration, number and size of national departments. There is a task team within the Presidency which has taken inputs from various stakeholders to come up with a determination. If South Africa looks at Namibia, Zimbabwe and Tanzania as examples it shows the size of ministries should be at 22 and 28. There is now a contraction in the size of ministries. Some departments perform mandates that should be performed at a programme level. There are debates on this but it must be remembered that the department sits within the whole value chain. There was a major expansion in the fourth administration. There are lessons that can be learned such as a high turnover rate leads to the destabilisation of public service and continuous changes leads to policy uncertainty. The stabilisation of the state is a major priority. One of the biggest challenges that needs to be prevented is support services. This is a programme that supports departments and it is where the size and ratios need to be addressed going forward. The current ratio is 70:30 and it is not ideal.

Mr Levin said the reconfiguration of government consists of looking at clustering different functions, the optimisation of resource-use, containing the Wage Bill and ensuring the administration of legislation rests with 1 executive authority. The splitting of departments has led to overlaps and new legislation. There is a process of merging in as much as there is a process of splitting. We now have 1 new department, the Department of Agriculture, Land Reform and Rural Development. 1 minister will oversee the 2 departments. Similarly, the Department of Higher Education, Science and Technology is under 1 minister. Departments themselves are not affected. Policy and research services have been recreated. The number of executives is at 28. One of the departments that have merged is the Department of Telecommunications and Postal Services. The Department of Sports, Arts and Culture have also merged. The agreement between the DPSA and organised labour is being finalised. In 2014, there was an unprecedented growth in the number of deputy ministers. Deputy ministers don’t have the same powers as the executive authority and there is very little legislation which assigns powers to them. The number of deputy ministers still shows an increase although it is a decrease from the fifth administration.

The Chairperson opened the floor for Members to ask questions.

Discussion

Ms Ntuli said the good work of the Department will evaporate if it does not devise a strategy of touching the ground. What linkages can you devise to touch the ground? Do you have any chance to sit with the President on this? On the number of ministries compared to other countries, are those countries developed or developing countries? When did the developing countries obtain freedom? Does South Africa have the same landscape as them? South Africa won’t be able to deliver more with less because it is a developing country. How can you touch the ground with this presentation? Is there any turnaround strategy to review the presentation to ensure this?

Mrs Motsepe noted the issue of early retirement. Has there been cases where departments don’t have requisite funding within its budget to administer personal requests? There should be a detailed plan behind the retirement programme on the basis that a lump sum should be tax free for volunteers assisting the government.

Mr Schreiber said the PSC is not undermined by having the power to enforce its recommendations. It’s been 25 years with the system and there is evidence to show the moral power of the PSC is not enough. In order to enhance the teeth of the PSC it must make sure its recommendations are implemented and enforced. Moral power is not enough, there needs to be real action to act against ongoing transgressions. The Cabinet today is 15% smaller than the previous administration. There are currently 142% more deputy ministers than in 1994. The fourth and fifth administrations were hugely unstable and the current administration should also be classified as such. Isn’t all the work that’s gone into the presentation useless when the President determines the size of Cabinet? There have been 5 mergers so it seems overblown to say the executive has been cut down. Is it really significant? What is the point of having deputy ministers? Deputy ministers appear to have no formal powers and there is no legislative framework to guide such officials. What is the point? Is it a tool for government to give jobs to friends?

Mr Mchunu replied there is a link between the reconfiguration process and the President. There have been sessions between the Department and the President on an ongoing basis. On the right size of government and the question of deputy ministers, it is a question of South Africans asking themselves how best to take an idea forward. This will be in the process of building the country. There is a need to rise above political constraints and start emphasizing what is going to work in the country. On the comparison with other countries, the presentation highlights something about Asia, Europe and Africa to broaden ideas. A debate can always be had on whether authority is more powerful than morality. Out of the many South African citizens, more than 50 million are good law-abiding people. Less than a million of people are worrisome. The power of what is right over what is wrong must always prevail.

The Minister was excused from the meeting.

Mr Malatsi said the presentation lacks details. On the discussions with organised labour, what is missing is the whole discussion of the consequence of the reduction of civil servants that is going to be necessary when you look at the size of government. On the actual cost and time frame of the reconfiguration of government, what has been allocated and spent up to date? What are the timelines that will eventually result in entities being transferred or aligned? The Committee must know it’s not an endless process. What would be the recommendation for the number of deputy ministers needed based on the reconfiguration of government?

Ms Lesomo said the presentation notes the creation of a fixed model with South African characteristics within 10 months. When does the 10 months start and end? In between this period there should be targets so the Committee can monitor the process. If the process of reconfiguration is outsourced or insourced, it might raise interest and costs. Who drives the process? It is internally or externally? Are you going to take note of the role of technology in public administration? The Minister should respond to some of the issues in writing. Where an employee is encouraged to take an early retirement, what happens if such person changes their mind before it is approved? Will the person be declined if he applies again? On the shortfall of R30 million in terms of salary and wages, is it because of the 2018 agreement? How far are you in meeting the agreed items? Does the support services programme seek to address the perceived bloated public service?

Mr Schreiber said it’s not right for the Minister to leave when issues are on the table. In future, the Minister must be requested to stay. It is time to look at changing the law for the PSC to have more power so there are repercussions when a department doesn’t implement its recommendations. The lack of consequence management is frustrating. Moral authority has been eroded so legislative tools need to be created to hold people to account.

The Chairperson replied the Minister has not run away and the Committee can arrange another time for him to discuss issues with Members.

Mr Maneli said the presentation focuses on high-level national departments. At what point do you look at other spheres of government in the reconfiguration process? On the professionalization of public service, the challenge is there are over-skilled people not doing anything. It is time to look at all spheres of government. During elections, when parties go out to campaign it is the duty of the public service to prioritise each of the manifestos. It is important for the state to belong to the people of the country and not a party at a particular time. During elections, the state is still expected to serve the country.

Mrs Motsepe said she is concerned. Questions are being raised for officials to respond to and not for Members to answer. Members must ask questions and not answer them.

The Chairperson replied the Minister indicated earlier he would have to leave the meeting early. It is unfair this hasn’t been conveyed to the Committee. Another time will be arranged for the Minister to respond to questions.

Responses

Mr Levin replied that there is no ideal type for the number of recommended deputy ministers. It depends on human capabilities. If ministers work well with deputy ministers, they will be assigned more responsibilities and have a greater impact. On the issue of other spheres of government, one of the Minister’s priorities is implementing the Public Service Act. The largest number of public servants are in provinces and there is some presence at local levels. There is 1 public administration that affects every branch of government. The Department has not incurred costs for outsourcing or using consultants for the reconfiguration of government process. It is using an internal team of experts.

The Chairperson said the Committee is facing time constraints for today’s meeting.

Advert for PSC Commissioner vacancy

An official said there is an ATC from the Speaker of Parliament’s office to fill the vacant position. The PSC has 14 Commissioners. The Committee is responsible for recommending five commissioners to the President.

The Chairperson asked for each party to submit names to the Secretary of the Committee.

Ms Ntuli seconded this.

Ms Lesomo said the submission should not be later than Friday. The sub-committee will discuss the requirements of the position.

Mr Schreiber asked for clarity on the calculation of the ratio.

An official replied it was developed by taking into consideration the composition of the Committee rather than the House. The advert will be advertised next weekend instead of this weekend.

The meeting was adjourned.



 

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