The status of performance management in the

Public Service

Presentation to Portfolio Committee:

8 May 2002

OBJECTIVES

To present an overview of the state of performance management in the Public Service and the implementation of the new performance management and development system (PMDS) for sms.

HISTORICAL REALITIES

• Before amalgamation and rationalisation in 1994 - many PM systems and procedures in public service, with detailed rules & regulations on appraisal for different categories of staff & for different purposes

• Major reform: 1 July 1999 - new management framework: devolution of management of depts to political & administrative heads of depts

• “One size fits all” approach abandoned. Each dept allowed to develop its own HR policies & systems, within a framework of uniform norms & standards

Putting the Management of Performance in the Public Sector into ContextPerformancemanagement for

By means of Statutory provisions

Departments/Institutions/Public Entities

Standards fororganisationaleffectiveness &efficiency

Public Finance Management Act, 1999;Treasury Regulations, 2001 [s. 27(4), 38(1)(b) &40(3)(a)

Heads of Department Performanceagreement

Public Service Act, 1994 [s. 12(4)]Public Service Regulations, 2001, Part 1 of Annex2

Senior managers (SMS)(levels 13 - 15)

Performanceagreement &from 1/4/02 newPM system

PSCBC Resolution 13 of 1998; Resolution 9 of2000Public Service Regulations, 2001, Chapter 4, PartIIISMS Handbook, new Chapter

All other staff(levels 1 - 12)

DepartmentalPM system(from 1/4/2001)

Public Service Regulations, 2001, Chapter 1, PartVIIIPSCBC Resolution 3 of 1999

PM : levels 1 - 12

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. Regulation VIII B.1 requires of each executing authority to determine a system for performance management and development for employees in that department (other than employees who are members of senior management). The system had to be in place with effect from 1 April 2001.

STATE OF PERFORMANCE MANAGEMENT (Levels 1 to 12)

A survey conducted by the DPSA indicated the following: (2001 information)

• 9 out of 34 national departments have started implementation of systems for staff below SMS

• 1 out of 9 provinces has started implementation

• On the positive side, only 3 national departments and 2 provincial administrations have not made some progress in developing their own PM systems

THREE LEVELS OF PROBLEMS AND CHALLENGES

Level Description Categories of issues

Level

1

Performance management specific System development issues

System content issues

System implementation issues

Historical realities - e.g. backlogs

Level

2

Organisational Resource and capacity issues

Managerial issues

Broader systemic issues

Broader organisational issues

Level

3

Environmental Change management & transformation issues

Policy and sequencing issues

Leadership issues (political & administrative)

Interface issues (political & administrative)

Performance Management and Development System (PMDS) for SMS

Review of the Old Performance Management System for SMS

As part of SMS initiative, DPSA embarked on review of old PM for SMS

Review took place against background of following realities: PA’s only introduced in 1998 When introduced, PA’s not compulsory - although

salary increases & cash bonuses of managers dependent on performance in accordance with PA

Review of the Old Performance Management System for SMS (Cont.)

Departments required to put performance evaluation systems in place by 31/03/2000 to assess managers - for HOD evaluations unique system introduced by PSC

Since 1998, MPSA annually determined parameters for salary increases and cash bonuses - awarding thereof a departmental decision

KEY FINDINGS - STRENGTHS

Shift has taken place from fixation on processes to delivery of outcomes & outputs

Insistence on achievement of tangible results has resulted in improvement of management info systems

Individual performance increasingly being seen within context of org performance

Decentralisation of performance management has resulted in improved ownership

Synergy is starting to develop between strategic, financial & HR processes

KEY FINDINGS - WEAKNESSES

Problem areas PA’s often not adequately linked to

strat & operational plans/ PA’s not reviewed annually

PA’s not part of an integrated perf man process

Often no consequences for poor/excellent performance

Main causes Planning & perf man cycle not yet fully

synchronised

Gaps in policy framework Capacity constraints in developing own perf

management systems Performance standards & indicators not

clearly defined Rating scales undefined/weak linkages to

incapacity processes & rewards Reluctance to address performance

problems Assessment backlogs Financial constraints

KEY FINDINGS - WEAKNESSES

Problem areas Mediocrity sometimes rewarded

Allocation of higher packages done ad-hoc

Training & development interventions often not linked to on-the-job performance

No common base to compare performance across departments & to inform career decisions

Assessments only focus on delivery of short term outputs & not on building the org

Main causes No guidance on distribution of rewards Weak oversight No pay progression system for serving

staff No provision for personal development

plans as part of perf man system

Incompatibility of assessment systems Inadequate guidance on formats

No common understanding & measurement of key managerial responsibilities

OBJECTIVES OF THE NEW PMDS FOR SMS

Linked to the overall objective of SMS of improving attraction, retention & development of high quality senior managers & professionals

Provide a fair and equitable basis upon which to identify under-performance and reward good performance

Provide a framework for performance improvement and development

Creates linkages between individual and organisational performance to improve service delivery

KEY FEATURES

Strongly results based, balances standardisation with flexibility to adapt: standardised management assessment criteria, linked to

competency framework; standardised rating scale; and personal development plans

Clear guidelines for linkages to pay progression and reward

Separate annual cost-of-living increases from performance-based cash bonuses & pay progression

Simplified

KEY FEATURES (cont.)

Only fully effective SMS members to be considered for pay progression

Performance significantly above expectations to be considered for cash bonuses

Decision on number of managers to be granted cash bonuses and extent thereof to be taken by EA’s, based on assessment results and within following parameters: max of 1,5% of SMS wage bill to be utilised for this

purpose; and cash bonus not to exceed 8% of individual’s total package.

The Regulations require of departments to use a single instrument to assess the performance of managers

An assessment instrument has been developed - Departments may customise the instrument to suit their particular needs

ASSESSMENT INSTRUMENT

CUT-OFF POINTS

<50%Unacceptable performanceProbation extendedEmployment terminated

50 - 64%

Performance not fully adequateProbation confirmed or extendedPerformance improvement measures introduced

65 - 79%

Fully effectiveProbation confirmedPay progression granted

80 - 84%

Performance significantly above expectationsProbation confirmedPay progression grantedCash bonus (between 3 & 5%)

>85%

Outstanding performanceProbation confirmedPay progression grantedCash bonus (between 6 & 8%)

PAY PROGRESSION SYSTEM

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.

They also need to have a signed performance agreement. The assessment rating of 65% or higher must be achieved over the last 12 months of the performance management cycle.

PAY PROGRESSION SYSTEM (cont)

The first pay progression can be effected on 1 April 2003 - depending on performance in 2002/03

Future progression cycles will run over 24 months, commencing on 1 April of a particular year

Only continuous service over 24 months on the same level will count for purposes of pay progression

KEY FEATURES (cont.)

HOD evaluation processes to be aligned with new system

Will build in strong data capturing (PERSAL) and reporting arrangements (annual report) - to allow for better monitoring & evaluation

INFORMATION ON STATE OF PA’S IN DEPARTMENTS

The OPSC in 2001 conducted a survey on PA’s in departments countrywide.

• Following the survey, the OPSC is finalising a report to strengthen the monitoring of PA’s.

• A questionnaire was sent to departments

• Interviews were conducted with senior managers

• The finalisation of the OPSC report will ensure the availability of information on the management of PA’s

Questions?Comments?