An analysis of the performance
management system: The case of a
metropolitan municipality
by
PS KGANTLAPANE
20164254Mini-dissertation submitted in partial fulfilment of the
requirements for the degree Master of Business
Administration at Potchefstroom Business School,
Potchefstroom campus of the North-West University
Supervisor: Prof. R.A. Lotriet
November 2009
ABSTRACT
Performance management at all levels of employees within the Ekurhuleni Metropolitan Municipality (EMM) is a key challenge, currently only applicable to senior managers. The employer was proactive in introducing the Ekurhuleni Excellence Awards to the gap that is created by the legislation, but the effort seems not to be working as employees do not understand the criteria that are used for nominations. The empirical study entailed 54 respondents who completed the questionnaire, in five different departments which are Finance, Human Resources, Information Technology, Legal and Administration.
In this study, the Performance Management System (PMS) of the EMM was analysed, and the biggest challenge being faced by the EMM is the inability of the EMM to address staff retention (at 57%) and succession when employees leave the EMM (at 62%). The two challenges identified by the study are most crucial for the success of the PMS. The PMS of municipalities is legislated by different Acts, and in order to address service delivery challenges, the Acts need to be reviewed to include all levels of employees. National and Provincial Government have implemented the PMS so that municipalities, as another sphere of Government, will improve service delivery as well as employee motivation.
The EMM senior managers, together with the Human Resources department, should craft a strategy or action for the future in order to successfully cascade the PMS to other levels of employees. The EMM Performance Management Policy that is currently operational is in line with the Municipal Regulation no. R805, so the Policy complies fully with the legislation.
List of key terms: Performance management system, senior managers, rewards, motivation, performance appraisal
ACKNOWL
EDGEM
ENTS
• To my supervisor, Professor Ronnie Lotriet, who made all the efforts to ensure the success of my study.
• To Ms Wilma Pretorius, for all the encouragement, friendliness, guidance and assistance all these years.
• To my mother, Ms Masedi Kgantlapane, for always encouraging me, and believing in me.
• To my husband, Mr Bonisane Makade and daughter Tshepang Kgantlapane, for all the support and love they gave me through my years of study.
• To my families, Kgantlapane and Makade, for encouragement, support and love given throughout these years.
• To my former boss, Mr Jerry Bouwer, for giving me the opportunity to study this course.
• To Ekurhuleni, DCM Ms Peta Mashinini, for allowing me to use Ekurhuleni resources to complete my study.
• To every individual who assisted me in any way throughout my studies. • Above all, my ancestors for looking after me and God, for being my
Saviour and light throughout my studies.
• To myself, for the opportunity to do this study, and being able to complete through hard work and perseverance.
TABLE OF CONTENTS
ABSTRACT ... ii
ACKNOWLEDGEMENTS ... iii
LIST OF TABLES ... vii
LIST OF FIGURES ... viii
LIST OF ABBREVIATIONS ... x
CHAPTER 1 - NATURE AND SCOPE OF THE STUDY ...
... 1
1.1 INTRODUCTION ... 1
1.2 PROBLEM STATEMENT ... 2
1.3 RESEARCH OBJECTIVES ... 3
1.3.1 Primary objective ... 3
1.3.2 Secondary objectives ... 4
1.4 SCOPE OF THE STUDY ... 4
1.4.1 Geographical demarcation ... 4 1.5 RESEARCH METHODOLOGY ... 5 1.5.1 Literature study ... 5 1.5.2 Empirical study ... 5 1.5.2.1 Structured interviews ... 6 1.5.2.2 Observation ... 6 1.5.2.3 Questionnaire ... 6
1.5.2.4 Population and sampling ... 6
1.6 LIMITATIONS OF THE STUDY ... 7
1.7 LAYOUT OF CHAPTERS ... 8
1.8 SUMMARY ... 8
CHAPTER 2- PERFORMANCE MANAGEMENT SYSTEMS ... 9
2.2 CONCEPTUALISING A PERFORMANCE MANAGEMENT
SYSTEM ... 10
2.2.1 The concept of performance management.. ... 10
2.2.2 Performance management cycle ... 13
2.2.3 Performance appraisal ... 16
2.2.4 Rewarding performance ... 20
2.2.5 Motivation ... 23
2.2.6 Linking rewards and job performance ... 24
2.3 AN OVERVIEW OF THE PERFORMANCE MANAGEMENT 2.3.1 2.3.2 2.3.4 2.3.5 2.4 2.4.1 2.4.2 2.4.2.1 2.4.2.2 2.4.2.3 2.4.2.4 2.4.2.5 2.4.2.6 2.4.3 2.4.3.1 2.4.3.2 2.4.3.3 2.5 LEGISLATION AT LOCAL GOVERNMENT ... 25
The Constitution and other Acts ... 25
Performance management system framework of section ... .. employees ... 29
Steps in developing a performance management system ... 32
The importance of a performance management system in Local Government ... 34
PERFORMANCE MANAGEMENT SYSTEM OF EMM ... 36
Planning for performance ... 39
Performance management system process ... 40
Section 57 managers ... 40
Monitoring performance ... 41
Performance measurement ... 42
Reviewing performance ... 43
Reward and recognition ... 44
Improving performance ... 45
Managing and monitoring performance ... 45
Performance Management Committee ... 45
Remuneration Committee ... 47
Performance Management Task Team ... 47
SUMMARY ... 49
CHAPTER 3 - EMPIRICAL RESEARCH ...
513.2.1 Questionnaires as a measuring instrument ... 51 3.2.2 Interviews ... 52 3.3 RESEARCH DESIGN ... 52 3.3.1 Data collection ... 52 3.3.2 Study population ... 52 3.4. RESEARCH METHODOLOGY ... 53 3.4.1 Research procedure ... 53
3.4.2 Pilot testing of the questionnaire ... 53
3.4.3 Research measuring instrument ... 54
3.5. RESULTS AND FINDINGS ... 54
3.5.1 Personal information ... 54
3.5.2 Performance Management System ... 62
3.6 SUMMARY ... 75
CHAPTER 4 - CONCLUSION AND RECOMMENDATIONS ... 77
4.1 INTRODUCTION ... 77 4.2 MAIN FINDINGS ... 77 4.3 RESEARCH EVALUATION ... 79 4.3.1 Primary objective ... 79 4.3.2 Secondary objectives ... 79 4.4 RECOMMENDATIONS ... 80
4.4 CONCLUSION - LITERATURE STUDY ... 83
4.5 CONCLUSION - EMPIRICAL RESEARCH ... 84
REFERENCES ... 86
APPENDIX A: THE QUESTIONNAIRE ... 92
APPENDIX 8: INTERVIEW QUESTIONS ... 98
APPENDIX C: REQUEST LETTER FOR PERMISSION TO CONDUCT RESEARCH AT THE EMM, AND PERMISSION GRANTED ... 103
LIST OF TABLES
Table 2.1: Key elements of performance management compared to performance appraisal ... 16
Table 2.2: Rating scale for KPAs and core competency
requirements ... 31
Table 2.3: Summarised performance management annual
LIST OF FIGURES
Figure 2.1: The performance management cycle ... 15
Figure 2.2: The performance appraisal cycle ... 20
Figure 2.3 Performance management sequence of activities ... 32
Figure 2.4: EMM administrative structure ... 37
Figure 2.5: Planning for performance ... 39
Figure 2.6: Monitoring performance ... 41
Figure 2.7: Measuring performance ... 42
Figure 2.8: Reviewing performance ... 43
Figure 3.1: Age group percentages ... 54
Figure 3.2: Marital status ... 55
Figure 3.3: Race division percentages ... 56
Figure 3.4 Gender percentages ... 56
Figure 3.5: Qualifications of employees ... 57
Figure 3.6: Employment types of employees ... 58
Figure 3.7: Employment category ... 59
Figure 3.8: Number of working years of the respondents at the EMM. 60 Figure 3.9: Functional distribution of the Corporate Services Cluster ... 61
Figure 3.10: Office location ... 61
Figure 3.11: EMM PMS is rolled out in a fair and equitable manner ... 62
Figure 3.12: Management ensures that there is sufficient awareness of the PMS ... 63
Figure 3.13: Good performance is rewarded ... 64
Figure 3.14: Employee percentages on the understanding of the PMS ... 65
Figure 3.15: Continuous monitoring of performance ... 66
Figure 3.16: PMS of EMM address staff retention ... 67
Figure 3.17: Succession plan of the EMM is incorporated in the PMS ... 67
Figure 3.18: Alignment of the vision and mission statement of
the EMM and PMS ... 68
Figure 3.19: Key challenges encountered in meeting set KPAs ... 69
Figure 3.20: PMS bonus percentages ... 70
Figure 3.21: Percentages of Success System training undergone by employees ... 71
Figure 3.22: Percentages of employees on the benefit derived from the PMS ... 72
Figure 3.23: Employees nomination for the EMM excellence awards .... 73
Figure 3.24: Understanding percentages of the EMM excellence
awards criteria ... 7 4
AG CCR DCM DPLG DPSA EMM GDS lOP KPAs KPis MMC MSA PA PAC PDP PMOS PMS PSC SACN SALGA SALGBC SDBIP SMS
LI
S
T
OF
A
BBREV
I
AT
I
O
N
S
Auditor-GeneralCore Competency Requirements
Deputy City Manager
Department of Provincial and Local Government
Department of Public Service and Administration
Ekurhuleni Metropolitan Municipality
Ekurhuleni Growth and Development Strategy 2025
Integrated Development Plan
Key Performance Areas
Key Performance Indicators
Member of Mayoral Committee
Municipal Systems Act
Performance Agreement
Performance Audit Committee
Personal Development Plan
Performance Management and Development System
Performance Management System
Public Service Commission
South African Cities News
South African Local Government Association
South African Local Government Association Bargaining Council
Service Delivery Budget and Implementation Plan
CHAPTER 1
NATURE
AND SCOPE OF THE STUDY
1.1 INTRODUCTION
Williams (2006: 1) researched that Local Government in South Africa has undergone considerable transformation since democracy. Much of this change has been implemented to correct the imbalances, inequities and disparities within local communities as a result of past regime policies. However, motivation for this change is also because National Government has realised that, like other governments throughout the world, there is a need to continuously modernise all spheres of Government.
According to Ketelaar (2007:1 ), public administration reform is increasingly guided by performance-based rankings as a means of improving the efficiency and value for money in public service delivery. Performance is indicated, for example, in school rankings, in the length of hospital waiting lists, and in terms of local governments' receptivity to new businesses. Comparisons in performance between government departments (ministries), public bodies, or local governments are similarly becoming more common.
The main aim of the Municipal Systems Act No. 32 of 2000 (MSA) is to
provide the core principles, mechanisms and processes that are necessary to
enable municipalities to move progressively towards the social and economic
upliftment of local communities and to ensure universal access to essential services that are affordable to all (South Africa, 2000:2).
Ketelaar (2007:3) states that while performance measurement has in recent years garnered the bulk of attention, selecting and retaining the right staff are likely to be just as important as performance agreements in motivating and stimulating public sector effectiveness. Private enterprises typically measure its performance in terms of growth in market share, revenues, earnings or
profitability, productivity ratios, financial viability and competitive position. The aggregate performance of all enterprises within an industry or sector is often reported by trade associations on behalf of its members, or by regulatory agencies on behalf of a regulated, privately owned industry. The aggregate performance of all enterprises within the economy usually is available through government statistic units, tax authorities, or regulatory agencies (Hood, 2007:8).
The development of a Performance Management System (PMS) at Local Government level in South Africa is a highly structured process which is determined by various sets of legislation. The transformation required fundamental changes in the way Local Government exercises its role, and this shift is evident in the now transparent budgeting process, efficient tax administration, and implementation of performance contracts of public sector managers, to improve accountability. To achieve these objectives, legislation governing performance management will be looked into in Chapter 2.
In accordance with the new legislation, Ekurhuleni Metropolitan Municipality (EMM) has also embarked on a process of institutionalising a PMS to comply.
1.2 PROBLEM STATEMENT
In terms of the MSA (South Africa, 2000:48), all municipalities are required to establish a PMS. In introducing a PMS, emphasis was only placed on Section 56 of the MSA (South Africa, 2000:58); managers and other employees are not covered by the legislation, because they are not appointed in terms of the performance contracts, but are permanent employees.
The challenge facing municipalities is only agreements and resolutions taken at the South African Local Government Association Bargaining Council (SALGABC) can be implemented. Since the formation of SALGBC in 2001, no agreement in terms of a PMS has been negotiated and agreed upon, because the job evaluation process is still not finalised (Govender, 2008:2).
This creates a problem, because there is no legislative requirement covering the PMS of other employees within municipalities. Management encounters challenges and resistance in their attempts to cascade the process downwards. There are no proper policies in place negotiated at the SALGABC to guide the process further. As a result, labour forums and management find it difficult to agree on the process that should be followed to cascade the process downwards.
According to Kenny (2005: 15), a business or government is not a social club designed purely for the benefit of employees. But, at the other extreme, exploitation of employees would be quite counterproductive, in the long term. PMSs typically call for managers to rate employee performance according to some set of predetermined criteria - subjectivity, objectivity or both (Bowen, 2000: 183).
A lack of the legislative requirement governing performance management of other employees not covered by the legislation leads to disgruntled employees, because their hard work is not recognised and rewarded. The performance rewards system of EMM does not cover all the employees as a result of this challenge. The other means adopted by Council to reward other employees who are not employed on a fixed-term contract in recognition of their hard work is through EMM excellence awards held on an annual basis.
Only a few employees are nominated from different departments by directors, with some departments failing to nominate any employee. Non-recognition of employees who go the extra mile contributes to low production, low morale, lack of service delivery, and poor implementation of projects.
1.3 RESEARCH OBJECTIVES
1.3.1 Primary objective
The primary objective of the study was to research and analyse the impact of the PMS of the EMM.
1.3.2 Secondary objectives
The secondary objectives were as follow:
• To determine if good performance is rewarded - through the PMS guiding section 57 employees and excellence awards focusing on other categories of employees; and
• The effectiveness of a PMS's contribution to motivating employees and meeting targets set by the Municipality and Government.
1.4 SCOPE OF THE STUDY
1.4.1 Geographical demarcation
The study was undertaken at EMM, situated in the Gauteng Province in what is historically known as the East Rand. The name "Ekurhuleni" is a Tsonga word which means "place of peace". The choice of name symbolises the rich diversity of cultures within this area (Mtshali, 2009:1 ).
EMM is one of the six metropolitans in South Africa, and one of three in Gauteng, formed on the 51h December 2000 in terms of section 2(1 )(a)-( d) of
the Municipal Structures Act No 117 of 1998 (South Africa, 2002), by merging nine cities and a town east of Gauteng. EMM has a population of about three million people, and the major towns in the area are Alberton, Benoni, Brakpan,
Edenvale, Germiston, Kempton Park, Nigel, and Springs. The EMM employs a total number of ±14 000 employees (Nkosi, 2006:14).
As indicated on the EMM website, the EMM comprises 175 councillors, (88 ward representatives and 87 proportional representation), and they play a political oversight. The political head is the Executive Mayor, and is assisted by the speaker, chief Whip and ten mayoral committee members.
1.5 RESEARCH METHODOLOGY
This study was intended to investigate and analyse the PMS of the EMM and the effect it has on employees. In this study, both qualitative and quantitative studies were employed. According to Polit and Beck (2004:723), research methodology is defined as "steps, procedures and strategies for gathering and
analysing data".
In quantitative research, the researcher can investigate the phenomenon without influencing it or being influenced by it. Qualitative research is more oriented to the interplay of individual and contextual factors. This study was done in two phases: a broad literature study and an empirical study (Struwig & Stead, 2004:16).
1.5.1 Literature study
Information was acquired from a broad review of the available material,
including textbooks, internet websites such as the EMM website, and other documents. Access to the EMM intranet was also utilised to gather
information in regard to the policy on rewards and the PMS. More information on the subject was obtained from internet publications, journals and North-West University's online library. The researcher obtained permission from the Deputy City Manager: Corporate Services Cluster in the EMM to conduct this study.
1.5.2 Empirical study
1.5.2.1 Structured interviews
The questionnaire was drafted on the basis of the issues that were identified during extensive research into the matter. Structured interviews were conducted during working hours. The purpose of these interviews was to give representative stakeholders the opportunity to express themselves on matters relating to the effect of the PMS in the EMM. Both open-ended and leading questions were asked.
1.5.2.2 Observation
Unstructured personal observation was the second data collection method chosen, because observation enables the researcher to gather real data from real situations (Cohen eta!., 2000:305). Unstructured observation means that there are no restrictions on what to observe and note while researching the field. In this study, any important aspects observed before, during, and after
the interviews were immediately recorded.
1.5.2.3 Questionnaire
The questionnaire was drafted on the basis of the issues identified during the extensive research into the matter. The techniques to distribute and complete the questionnaires were personal distribution and via e-mail. For the purpose
of this study, questionnaires were sent to employees randomly selected in different directorates within the Corporate Services Cluster.
1.5.2.4 Population and sampling
According to Stuart and Wayne (1996:29), a population is any group that is a subject of the research interest. Levine et a!. (2008:254), on the other hand,
define a sample as the portion of a population that has been selected for analysis. Rather than selecting every item on the population, statistical sampling procedures focus on collecting a small representative group of the
larger population. A sample of 150 employees was randomly selected within the Corporate Services Cluster. This amounts to 30% of employees working in this cluster in the levels ranging from accountants to executive directors.
Information not obtained from publications relevant to this study was gathered through the use of questionnaires. Structured interviews were scheduled with the relevant individual or group of employees dealing with the PMS at EMM.
This information was employed to first assess the basic understanding of the PMS of the EMM and, if any, what impact it has on employees.
Data collected were statistically analysed with the assistance of the Statistical
computer program (SPSS Software, 2008). Descriptive analysis was used where data are presented in gross tabulation, bar and pie charts, followed by the interpretation and discussion of the results. Recommendations on this study were made available to senior management of the EMM.
1.6 LIMITATIONS OF THE STUDY
Every research study is not devoid of limitations which may prevent the researcher from giving a hundred percent accuracy in reporting (Patton, 2002). The following had an impact on the study:
• Time constraints- time was limited for completion of the study;
• Willingness of the sample to participate in the study, availability of the sample to conduct interviews and time frames for completion of the questionnaires; and
• Cost implications.
The cluster used has employees totalling 1857 thus making the 30% sample of the total population (557) large. The study only concentrated on employees occupying senior positions, from accountants to managers. The viewpoints of lower levels of employees were not taken into consideration; clerks and general workers were reflected by the views laid forward by accountants. The levels from general workers to managers were not included in the legislated performance system of EMM, because their appointments are not performance based, because they are appointed on a permanent basis.
Lower levels (general workers and clerks) also do not have access to the e-mails and because of the geographical diversity of the EMM, from Benoni to Brakpan, Germiston and Springs, to Alberton and Kempton Park, it was also difficult to drive to these locations to deliver questionnaires and collect them at a later stage.
1. 7 LAYOUT OF CHAPTERS
CHAPTER 1 - Nature and scope of the study This is the introduction to the study.
n
CHAPTER 2 - Performance management systems The researcher reviewed literature on the performance management system.
n
CHAPTER 3 - Empirical research and analysis
The results of the empirical study on the performance management system are presented and discussed.
n
CHAPTER 4- Conclusions and recommendations
Conclusions were drawn and recommendations are made
based on the conclusions.
1.8 SUMMARY
This chapter served as the introduction to the study as proposed, sketching the research problem context and setting the scene for the rest of the dissertation.
Chapter 2 of this study focuses on the literature study on performance management systems, including the private sector, public sector (Government) as well as Local Government (Municipality).
CHAPTER 2
PERFORMANCE MANAGEMENT SYSTEMS
2.1 INTRODUCTION
As municipalities in South Africa are moving from a transitional phase since 1994 to one of consolidation and implementation, they are faced with a range of new challenges. There is an increased responsibility on municipalities to deliver quality service and promote overall development in their areas of jurisdiction. The new role of municipalities is underpinned by a transformed
planning and system framework that places emphasis on prioritisation,
alignment to critical development needs, monitoring and measurement of achievements (South Africa, 2000:38).
The role of performance management is a critical mechanism to ensure that developmental Local Government is able to translate the White Paper on Local Government and subsequent legislation into practice that delivers results. The White Paper on Local Government identifies performance management as one of the tools, which must be implemented by municipalities. It is part of its developmental mandate, as indicated in the Constitution of the Republic of South Africa (Act No. 108 of 1996) (South Africa, 1996).
The developmental role of Local Government requires municipalities to work in collaboration with local communities in order to find sustainable ways of meeting the community's needs and improving their quality of life (South Africa, 2000:6). Performance management, if used effectively and efficiently by municipalities, as specified by Chapter 6 of the Local Government MSA Act No. 32 of 2000 (South Africa, 2000), can enable municipalities to measure, monitor, as well as report their activities to citizens by Mayors/Executive Mayors in the form of service delivery achievements through community gatherings (lmbizos) where the Integrated Development Plan (IDP) is also reviewed. In this way, accountability can be ensured, because citizens are
able to voice their dissatisfaction during these gatherings. In view of the above, this chapter aims to elaborate on the analysis of a performance
management system (PMS) and its contribution to a metropolitan municipality.
It will describe the definitions of performance management, with its different concepts, in order to gain a clear understanding of the PMS. This theoretical discussion, with the analysis of relevant legislation as discussed in the chapter, develop the way to establish a broad framework for a PMS for municipalities.
2.2
CONCEPTUALISING A PERFORMANCE MANAGEMENT SYSTEM2.2.1 The concept of performance management
According to Coetsee (2003: 139), performance is defined as realising goals and meeting expectations. A general way of describing performance is by
means of the following formula: P = S x M x R
Where: P = Performance S = Skills and abilities M = Motivation
R =Resources
Performance management is defined as an approach to management which harnesses the endeavours of individual managers and workers towards an organisation's strategic goals. Performance management defines goals and the outputs needed to achieve those goals, and gains the commitment of
individuals or teams to achieve those outputs, and it monitors outcomes (Patel
in Vander Waldt, 2004:34).
According to Kermally (2004:1), performance management is used as the organisation's steering wheel, helping all parts of the organisation to move together in the right direction. If the various departments are not aligned to
what the organisation has set out to achieve, it will be difficult to steer smoothly.
Performance management is described by Armstrong and Baron (2006: 1) as a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.
According to Cummings and Worley (2005:366-367), performance management is an integrated process of defining, assessing and reinforcing employee work behaviours and outcomes. Performance management
includes practices and methods for goal setting, performance appraisal and reward systems that align member work behaviour with business strategy,
employee involvement and workplace technology.
Performance management, if carried out properly, can motivate employees by functioning as a key component of a total reward process. The total reward concept emphasises the importance of considering rewards in all aspects as an integrated and coherent whole. Performance management is, of course,
also associated with generating the information required to decide on pay increases or bonuses related to performance, competence or contribution
(Armstrong & Baron, 2006:1 03).
A PMS consists of four stages (Spangenberg, 1994:14):
• Performance planning - setting goals in terms of the business plan and developing action plans;
• Managing performance- using coaching and providing assistance;
• Reviewing performance - using formal and informal techniques; and • Rewarding performance.
The performance management process requires several key activities, including identification and prioritisation of desired results, establishing means to measure progress toward those results, setting standards for assessing
how well results were achieved, tracking and measuring progress toward
results, exchanging ongoing feedback among those participants working to
achieve results, periodically reviewing progress, reinforcing activities that
achieve results and intervening to improve progress where needed. The
results measurements per se are not the ultimate priority as much as ongoing feedback and adjustments to meet results.
In order for a PMS to be successful it should be measured. Performance
measurement by Osborne and Plastrik (quoted by Behn, 2003:587) enables
officials to hold organisations accountable and to introduce consequences for
performance.
Performance measurement has been extended to include the performance
management of individual civil and public servants. Increasingly, their
performance is linked directly to the overall effectiveness of the public sector. An example of linking an individual's contribution to the performance of a
public sector organisation comes from the United Kingdom, where Public
Service Agreements are used to set objectives for departments and other
public institutions (Ketelaar, 2007:2).
A good management or performance review system, according to Williams et
a/. (1994:537), is instrumental in its ability to assist administrators in making informed decisions and to plan for activities that will be preventative in nature. Assessments will be sensitive to statutory requirements, regulations, and the
goals and objectives articulated by the organisation.
Fay (1990:76) sees performance management as a much wider concept than
plan, direct and improve the performance of subordinates in line with achieving the overall objectives of the organisation.
2.2.2 Performance management cycle
According to Kearney and Berman (1999: 1 ), performance is simply defined as managing public programmes for outcomes. Managers use public resources and mandates to ensure their policy programmes meet public objectives and expectations. Performance is referred to as being about doing the work as well as about achieving results.
The performance management cycle is a process, not an event, and it operates as a continuous cycle. This ongoing process begins with planning, acting on developed plans, monitoring and reviewing performance (Armstrong & Baron, 2005:57).
In order to construct an integrated model of overall performance, it is necessary to look at the annual performance cycle. An annual performance cycle would contain the following six steps (Spangenberg, 1994:29-31 ):
• Performance planning - includes looking at the vision, mission,
strategy and organisational goals set and communicated. Goals for key processes should be linked to organisational and customer needs. • Design - refers to the design of the organisational structure support
strategy. Process design facilitates efficient goal achievement.
• Managing performance and improvement - an organisation should continuously develop and change efforts. Appropriate sub-goals must be set; process performance is managed and reviewed regularly.
• Sufficient resources should be allocated to the process and functional goals should also be managed, reviewed and adapted quarterly.
• Reviewing performance - performance should be reviewed annually and there should be input into strategic planning.
• Rewarding performance - rewards commensurate with value of organisational performance. Individual and team performance should be rewarded.
When developing a performance system it is important to have reasons for such a system. One reason can be legislative requirements and I or improving public service delivery (Pieters, 1996:266).
According to the Human Resources Department at the University of California (Berkeley) (2008: 1 ), overseeing performance and providing feedback are not an isolated event, which is focused in a performance assessment or evaluation. It is an ongoing process that takes place throughout the year. The performance management process is a cycle, with discussions varying year-to-year based on changing objectives.
The cycle includes planning, checking-in, and assessment.
• To begin the planning process, the employer and employee review overall expectations, which include collaborating on the development of performance objectives. Individual development goals are also updated. A performance plan that directs the employees' efforts toward achieving specific results to support organisational excellence and employee success is developed.
• Goals and objectives are discussed throughout the year, during check-in meetcheck-ings. This provides a framework to ensure employees achieve results through coaching and mutual feedback.
• At the end of the performance period, the employer assesses the employees' performance against expected objectives, as well as the means used and behaviours demonstrated in achieving set objectives. Together the employer and employees establish new objectives for the next performance period.
The above discussed issues are depicted by the performance management cycle in figure 2.1 below.
Figure 2.1: The performance management cycle
The Performance
Management Cycle
Managers and employees meet to:
I. Discuss past year's performance 2. Set groundwork for
next year's cycle
;q ~ ~ -;:::. -::
?
\
~'(\ase1:
Pta,,,-1¥
,iS-\ 'l. ~o<::> A,.,0,
/".,? motovated engaged. and high performing workforce that supports the University's work :t 0 ::0Managers and employees mee1: to:
I . Review expcet:ed outcomes 2. Se1: performance objectives 3. Set development goals 4. Establish resources needed
to meet obJeCtoves and goals S. Identify supports and barriers
to achoevang goals 2"
.s
~~
J
• Identify potential objeet:ives • SuggeSl: development opportumties ~~ ~ '%1'Jt' It 'Of SVWo\4 ~cJZ-~Managers and employees 3. Determine Ratongs
Managers and employees separately prepare for assessment d1scussoon.
meet to.
I. Discuss re.sults to date 2. Rev1ew and refine
objectives
3. Remove barners to goal ach1evemcnt
Note· For employ~ wimm their prob3toonary period. the performance mllmlgement cycle is sox months
(Source: Human Resources- University of California (Berkeley), 2008)
The performance management process is similar to the performance
management cycle and seeks to do the following (Spangenberg, 1994:38):
• Create shared vision - it is important that a mission of a group 1s
understood by all stakeholders and commonly understood.
• Clarify role of individual employee -job requirements, responsibilities,
duties, tasks and objectives of individuals should be clearly clarified
and properly understood by the individual.
• Provide for a fair evaluation - measurement criteria and competency
standards should be known beforehand.
• Performance drives - what drives performance should be clearly
defined. Performance drives can be rewards, recognition of
encouraging performance excellence and resolving performance
problems.
• Interim assessment of employee performance - it is done on a 6-monthly basis. The employee initiates self-assessment, career interests, development actions and matrix input.
• Final assessment - it is carried out annually. The same as the interim assessment the employee initiates self-assessment, career interests, development actions and matrix input.
2.2.3 Performance appraisal
The PMS differs markedly from traditional performance appraisal systems
(Spangenberg, 1994:17). Table 2.2 below distinguishes the difference in performance management discussed in 2.2.1.
The table represents a more systems-oriented approach covering four major areas: context of performance management, system, process and outputs.
Table 2.1: Key elements of performance management compared to performance appraisal
ELEMENT PERFORMANCE APPRAISAL PERFORMANCE
MANAGEMENT
Context
Purpose Multiple: reward allocation, Balancing individual, team,
personal counselling and and organisational purposes
development, HR planning,
and more.
Philoshy Judgement and comparison Improvement (analytical) first
(enumerative) priority; judgement, second
Table 2.1: Key elements of performance management compared to performance appraisal (continued)
System
Performance unit
I
Individual employee (performer)Performance
I
Direct superior or employee reviewer (rater) Process Measurement Focus Appraisal discussion Scheduling Training Performance-reward linkage Promotion decisionsJob-related criteria (trait or behaviour)
Review of past performance
Often one-way
Annual, administratively driven
Rater
Mostly direct (often sub-initiated)
Employee comparison methods
Individual employee,
team/unit, system/process Direct superior/ co-workers/ team members, performer,
customers, others
Broad measure based on negotiated, i mprovement-oriented and recurring (routine) objectives (results) Competencies aligned with strategy and values
(behaviour)
Focus on entire performance management process: defining, developing,
reviewing Collaborative
Initiated by performer or superior
Aligned to natural
organisational performance (planning) cycles and administrative systems.
All participants
Primarily reward higher-order unit of performance
Performance linked to pre-determined consequences.
Special assignments;
simulations, such as assessment
centres; customer involvement Therefore PM outcomes only one of a variety of inputs
Table 2.1: Key elements of performance management compared to
performance appraisal (continued)
Outcomes Individual effectiveness:
evaluation, guidance and development, motivation
(Source: Spangenberg, 1994:17-19)
Agreement on performance level
Satisfaction (fairness and motivation)
Individual growth, group and systems development, organisational effectiveness and change
According to McGregor (1991: 1) performance appraisal is adopted as an important feature of management development programmes. Formal performance appraisal plans are designed to meet three needs:
• Provide systematic judgements to back salary increases, promotions, transfers and sometimes demotions or terminations;
• A means of telling a subordinate how he/she is doing and suggesting needed changes and
• Used as a basis for coaching and counselling of the individual by the superior.
A performance appraisal system as described by Gerber et a/. (1998: 169) provides the institution with an opportunity to assess and take stock of its human resource capital. The performance appraisal system provides information so that important decisions can be taken for future development of staff.
Van der Waldt (2004:240) regards performance appraisal as the process by which an employee's contribution to the organisation during a specified period is assessed. Performance appraisal represents a legal communication to an employee and should be supported by objective reasoning.
Performance appraisal is a feedback system that involves the direct evaluation of individual or work group performance by a supervisor, manager or peer. Performance appraisal involves collecting and disseminating performance data to improve work outcomes. Performance appraisal is a
systematic process of jointly assessing work-related achievements, strengths and weaknesses (Cummings & Worley, 2005:366).
Armstrong and Baron (2006:14) believe that performance appraisal is a more limited approach which involves managers making top-down assessments and rating the performance of their subordinates at an annual performance appraisal meeting.
Performance appraisal has become the systematic evaluation of employees with respect to their performance and their potential for development. Most organisations appraise the performance of their employees. One of the key aspects of performance appraisal is its link to corporate objectives. The crucial point is that employees should be very actively involved in formulating their own goals. This is an important aspect of motivating employees and encourages individuals to exert effort (Kreitner & Kinicki, 2004:358).
The graph below depicts the performance appraisal cycle. The cycle begins with the establishment of objectives and setting of communication channels.
Monitoring, coaching and counselling plays an important role in this step. The next step will be to review and perform appraisals. The employer and employee should be honest and openly discuss if objectives that were set has been achieved. After agreeing, evaluation and analysing performance is done.
Scores are allocated to each objective, and remedial steps given for objectives not met. Feedback is given to employees quarterly and the employer's intention on how remuneration will take place and how implementing further coaching is going to take place. Development plans are discussed and action plans are set out. Time frames are set in relation to the action plan.
Figure 2.2: The performance appraisal cycle Action ----~
1
Discuss Developmentr
Get effective feedback Establish objectives • lnvolves subordinates at this stage ·Establish time scales ·Communication outcomes1
·Monitor ·Coach ·Counsell
Review and appraise ·Open discussion~
~nestyEvaluate and analyse performance
(Source: Gerber eta/., 1998:20)
2.2.4 Rewarding performance
The most important reason for linking outcomes to performance is that good performance followed by giving rewards and recognition reinforces the effort as well as the performance behaviour. If an organisation is really intent on unlocking the potential of people the organisation cannot base remuneration on the status of an employee - that is, the job grade or level, but must link remuneration to performance. Rewards and recognition may be of a monetary nature, a promotion or pat on the back, a feeling of satisfaction, or may be of a disciplinary nature or feelings of dejection due to poor performance. Linking rewards to performance (pay for performance), and vice versa disciplining
under-performance, are both complicated matters, but both are of great
importance (Coetsee, 2003: 154-155).
When giving rewards and recognition, the focus should be on rewards and forms of recognition which are valuable to the employee - that is giving the kind of rewards and recognition which employees regards as significant. Rewards and recognition must therefore satisfy people's preferences, realistic
and significant expectations to have a high valence or value for them. Rewarding people and giving them recognition reinforce effort which leads to performance. The modern approach is rather to link pay to performance, because this leads to improved equity, productivity and cost reduction as well as contributing to the creation of a motivating climate (Coetsee, 2003:166).
Organisational rewards are powerful incentives for improving employee and work performance. Both intrinsic and extrinsic rewards can enhance performance and satisfaction. In addition to the obvious pay and benefits (salary and benefits such as annual bonus, medical aid), there are less obvious social and physiological rewards. Social rewards include praise and recognition from others both inside and outside the organisation. Physiological rewards come from personal feelings of self-esteem, self-satisfaction, and accomplishment (Cummings & Worley, 2005:377).
A distinction is made between extrinsic and intrinsic rewards (Kreitner &
Kinicki, 2004:337):
• Extrinsic rewards include, amongst other, financial (money), material and social (praise) rewards because they come from the environment. • Intrinsic rewards are psychological (deriving pleasure from task
performed itself or one's experience, a sense of competence or self determination) rewards, because these are self granted.
• Rewarding performance - "Pay for performance" is the popular term for monetary incentives linking at least some portion of a pay cheque directly to results of accomplishment. The general idea behind pay-for
-performance schemes (including but not limited to merit pay, bonuses and profit sharing) is to give employees an incentive for working smarter or harder.
Pay for performance is something extra, compensation above and beyond basic wages and salaries. Proponents of incentive compensation say something extra is needed because hourly wages and fixed salaries do little
more than motivate people to show up at work and put in required hours
(Kreitner & Kinicki, 2004:340).
According to Kreitner and Kinicki (2004:338-339) on organisational reward systems, three general criteria for the distribution of rewards are as follows:
• Performance results- tangible outcomes such as individual, group, or
organisation performance; quantity and quality of performance.
• Performance actions and behaviours - teamwork, cooperation, risk
taking and creativity.
• Non-performance considerations can be customary or contractual,
where the job, nature of the work, equity, tenure and level in hierarchy are rewarded.
In order for the organisation to roll-out the performance management process successfully the organisation has to utilize one or more of the following reward systems (Cummings & Worley, 2005:382-387):
• Skills based pay systems - the most traditional system which must first establish the skills needed for effective operation, identify the optimal skill profile and number of employees needed with each skill, price each skill and therefore develop methods to measure member skill acquisition. Typically, employees are paid according to the number of different jobs they can perform.
• Performance-based systems - rewarding performance in the following forms; salary increases, stock or cash bonuses. This system can be based on individual performance or group/team performance.
• Gain-sharing systems - paying employees a bonus based on
improvements in the operating results of an organisation.
• Promotion systems - process whereby higher-level-managers decide whether lower-level employees will be promoted.
2.2.5 Motivation
Motivation continues to be a major topic of human resources management, because it is assumed it exerts an important influence on action and behaviour in organisations (Gerber eta!., 1998:256).
Two common characteristics underlie the definition of motivation:
• Motivation is typified as an individual phenomenon. Every person 1s unique and all the major theories of motivation allow for this uniqueness to be demonstrated in one way or another.
• Motivation is described, usually, as intentional. Motivation is assumed to be under the person's control, and behaviours that are influenced by motivation, such as effort expended, are seen as choices of action.
Over the years, many different motivation theories have been advanced. Each of these theories has grown out of somewhat different focus or concern. Although the theories are very different in many respects, they all have grown out of a similar concern, to account for the arousal, direction, and persistence of behaviour. Those three concepts are what define the focus of motivation (Franken, 2002:9).
According to Gerber et a/. (1998:258), for motivation to work it has to be classified in threefold:
• Economic rewards - pay, fringe benefits, pension rights, material goods and security;
• Intrinsic satisfaction - delivered from the nature of the work itself, interest in the job and personal growth and development; and
• Social relationships - such as friendships, group working and the desire for affiliation, status and dependency.
2.2.6 Linking rewards and job performance
One of the most important reasons for linking outcomes to performance is that good performance followed by giving rewards and recognition reinforces the effort as well as the performance behaviour (Coetsee, 2003: 154).
Performance management if carried out properly can motivate people by functioning as a key component of total reward process. The total reward concept emphasises the importance of considering reward in all aspects as an integrated and coherent whole. Performance management is of course also associated with consistency pay by generating the information required to decide on pay increases or bonuses related to performance, competence or contribution (Armstrong & Baron, 2006:1 03).
In addition to person- or job-based reward systems, organisations have devised ways of linking pay to performance, making it the fastest-growing and most popular segment of pay-based reward systems. One study estimated that almost two-thirds of businesses have some form of performance-based or variable pay system. They are used in such organisations as American Express, Herman Miller and Corning.
Pay-for-performance plans tend to vary along three dimensions (Cummings &
Worley, 2005:383):
• The organisational unit by which performance is measured for reward purposes -an individual, group, or organisation basis;
• The way performance is measured -the subjective measures used in supervisors' ratings or objective measures of productivity, costs, or profits; and
• What rewards are given for good performance - salary Increases,
stock, or cash bonuses.
According to Cummings and Worley (2005:384) in terms of linking pay to performance, individual pay plans are rated highest, followed by group plans and then organisation-wide plans. The last two plans (group and
organisation-wide) score lower on this factor, because pay is not a direct function of organisational behaviour. At the group and organisation-wide levels, an individual's pay is influenced by the behaviour of others and by external market conditions. Generally, stock and bonus plans tie pay to performance better than do salary plans
2.3 AN OVERVIEW OF THE PERFORMANCE MANAGEMENT
LEGISLATION AT LOCAL GOVERNMENT
The MSA (South Africa, 2000:47) prescribes that a municipality must establish
a PMS, which deals specifically with the performance management of the
municipality's lOP, whereas section 57(1) (b) of the same Act (South Africa, 2000:60) prescribes that a performance agreement must be entered between
the municipality and the municipal manager, and between the municipal
manager and all persons directly accountable to him or her. It further affirms in
section 38 of the same Act that the PMS must monitor the performance of the
political office bearers, councillors and that of the administration as a whole.
Department Provincial Local Government (DPLG) defines performance
management in the public sector as a strategic approach to management,
which equips leaders, managers, employees and stakeholders at different
levels, with a set of tool and techniques to regularly plan, continuously monitor, periodically measure and review performance of the organisation in terms of indicators and targets for efficiency, effectiveness and impact. This system ensures that all leaders, managers and individuals in a municipality are held accountable for their actions, which should bring about improved service delivery and value for money.
2.3.1 The Constitution and other Acts
Talbot (quoted by Van der Waldt, 2004:35) reiterates the fact that
governments for as long as governments have been around. Emphasis is made on the following focus areas in public institutions:
• Management and improvement (internal efficiency and output/outcomes);
• Accountability and control (public reporting, audit and contracts);
• Savings (input and efficiency);
• Financial (economy); • Processes (activities); and
• Efficiency (outputs) and effectiveness (outcomes).
The South African Government's response in entrenching the transformation of the public service has its beginning with the White Paper on the Transformation of the Public Service which was published on 24 November
1995 and the Batho Pele White Paper both upholding section195 of the
Constitution (Act No 108 of 1996) (South Africa, 1996b). Section 195 of the Constitution (South Africa, 1996:111) which states that public administration must be governed by the democratic values and principles enshrined in the Constitution, includes the following principles:
• A high standard of professional ethics must be promoted and maintained.
• Efficient, economic and effective use of resources must be promoted.
• Public administration must be development orientated.
• Services must be provided impartially, fairly, equitably, and without bias.
• People's needs must be responded to and the public must be encouraged to participate in policy-making.
• Public administration must be accountable.
• Transparency must be fostered by providing the public timely,
accessible and accurate information.
• Good human resource management and career development practices, to maximise human potential, must be cultivated.
• Public administration must be broadly representative of the South
based on ability, objectivity, fairness and the need to redress the imbalances of the past to achieve broad representation.
According to the White Paper of Batho Pele (South Africa, 1997:15), the Government values entrench a culture of 'putting the people first'. These values are:
• consultation on level and quality of service standards;
• setting precise and measurable service standards;
• increasing to services;
• the treatment of citizens in a courteous manner;
• providing accurate information;
• employees acting in an open and transparent manner;
• provide remedy if service standards fall below promised standard; and • offering quality services provided economically and efficiently.
The Batho Pele White Paper values are operationalised through the MSA No 32 of 2000 (South Africa, 2000:40) which states that the objective of institutionalising performance management at Local Government level is to monitor, review and improve the implementation of the municipality's Integrated Development Plan (IDP). According to section 35 of this Act, the IDP is the principal strategic planning instrument of the municipality, which guides and informs all of management's planning and development activities.
According to the Department of Provincial and Local Government (DPLG Guide Pack: VI: undated), the PMS, must inter alia, achieve the following objectives:
• act as an early warning signal of under-performance so as to enable the implementation of proactive and timely interventions;
• improve efficiency, effectiveness and accountability of the services delivery programmes;
• promote decision-making and resource allocation;
• guide the development of municipal capacity building programmes;
• create pressure for change at various levels.
The performance management regulations, on the other hand, set certain criteria which the municipality's performance management system must satisfy. These include inter alia:
• The nature of the performance management system;
• How the performance management system should be adopted; • How the setting of key performance indicators should be done; • The listing of the seven national key performance indicators (KPis); • The reviewing of the KPis;
• The setting of performance targets for officials, councillors, service providers and administrative units;
• The monitoring, measurement and review of performance; and • The auditing of performance measures.
A review of all these criteria indicates that the following important legislative requirements need to be upheld when implementing a municipal PMS (Williams, 2006:13-14):
• A municipality must demonstrate how it is going to operate and manage the performance management system from the planning phase through to the performance reporting phase. This, in municipal planning terms, is often referred to as the "process plan".
• The roles and responsibilities of each of the role-players, as well as that of the local community, must be stated. These are delineated in the process plan.
• The process of implementing the performance management system within the framework of the IDP must be delineated.
• The community must be involved in setting and reviewing KPis.
• Indicators must be set for the development of priorities and objectives which are stated as input, output, and outcome indicators.
• Indicators must be set for all administrative units, employees, municipal entities and service providers with whom the municipality has entered a service delivery agreement.
• Indicators must be reviewed annually and reported at least twice a year to council.
• Indicators must be designed to allow the municipality to detect early u nderperforma nee.
• Indicators must also allow for corrective measures where under-performance is detected.
• The indicators must measure efficiency, effectiveness, quality and impact of the performance of the municipality and those to be measured.
2.3.2 Performance management system framework of Section 57
employees
Section 56 employees in terms of the MSA (South Africa, 2000:58) are referred to in terms of chapter 77(1) of the Municipal Finance Management Act No 56 of 2003 (MFMA) (South Africa, 2003a:68) as the top management
(Municipal Manager and managers reporting directly to him/her), responsible for administration, and consists of the accounting officer, the chief financial
officer, all senior managers and any other senior officials designated by the accounting officer. They are responsible for managing the respective votes of the municipality and to whom powers and duties have been delegated in terms of section 79 of the MFMA (South Africa, 2003a:69).
In terms of section 57(1) of the MSA (South Africa, 2000:59) a person may be appointed to that position only in terms of a written employment contract with the municipality complying with the provisions of this section; and subject to a separate performance agreement concluded annually. The performance
agreement must be concluded within a reasonable time after a person has been appointed, within 90 days after assuming duty.
The purpose of the performance agreement, according to DPLG (South Africa, 2003d: 13) is to:
MSA (South Africa, 2000) as well as the employment contract entered
into between the parties (employer and employee);
• Specify objectives and targets established for the employee, and to
communicate to the employee the employer's expectations of the
employee's performance expectations and accountabilities;
• Specify accountabilities as set out in a performance plan, which forms
an annexure to the performance agreement;
• Monitor and measure performance against set targeted outputs;
• Use the performance agreement as the basis for assessing the suitability of the employee for permanent employment and/or to assess whether the employee has met the performance expectations
applicable to his or her job;
• In the event of outstanding performance, to appropriately reward the
employee in accordance with the employer's performance management
policy; and
• Give effect to the employer's commitment to a performance-orientated
relationship with its employee in attaining equitable and improved
service delivery.
According to the Government Notice R805 (South Africa, 2003b:14), the
performance agreement has three components: core competency
requirements which are 20%, KPis and sub-KPis which are 80% and the
personal development plan (PDP). Assessments are conducted using a 5
-point rating scale. An overall rating is calculated by using the applicable
assessment-rating calculator. Such overall rating represents the outcome of
Level
5
4
3
Table 2.2: Rating scale for KPAs and core competency requirements
Terminology Description Outstanding performance Performance significantly expectations Fully effective
Performance far exceeds the standard expected of an employee at
this level. The appraisal indicates that the employee has achieved above fully effective results against all performance criteria and
indicators as specified in the PA and performance plan, and maintained this in all areas of responsibility throughout the year.
Performance is significantly higher than the standard expected in above 1 the job. The appraisal indicates that the employee has achieved above fully effective results against more than half of the performance criteria and indicators and fully achieved all others
throughout the year.
Performance fully meets the standards expected in all areas of the
job. The appraisal indicates that the employee has fully achieved effective results against all significant performance criteria and indicators as specified in the PA and performance plan.
Performance is below the standard required for the job in key areas.
Performance meets some of the standards expected for the job. 2 I Performance not fully
I
The review/assessment indicates that the employee has achieved1
effective
Unacceptable
performance
below fully effective results against more than half the key performance criteria and indicators as specified in the PA and
performance plan.
Performance does not meet the standard expected for the job. The review/assessment indicates that the employee has achieved below fully effective results against almost all of the performance criteria and indicators as specified in the PA and performance plan. The employee has failed to demonstrate the commitment or ability to bring performance up to the level expected in the job despite management efforts to encourage improvement.
(Source: Local Government Regulations (South Africa, 2006: 15-19))
Rating
2.3.4 Steps in developing a performance management system
The following eight steps are developed to enable that the municipality achieves its objectives of measuring performance of section 57 as indicated in the table 2.2 above. According to the MSA (South Africa, 2000:47), the
Executive Committee or Executive Mayor of a municipality or, if the
municipality does not have an Executive Committee or Executive Mayor, a
committee of councillors appointed by the municipal council must manage the
development of the municipality's PMS.
Figure 2.3 Performance management sequence of activities
~
~
:~$k,:&~ ·;I
~
.
_
1 '~...
>1 1 .·.~·.1i
/
l~I
~
~-(Source: Municipal Organisational Performance Management Implementation Guide (South Africa, 2003d:8-10))
The following are eight steps for developing a PMS and are depicted in figure
2.3 above (Municipal Organisational Performance Management
• The introduction of a PMS - It is essential that before the municipality can introduce the PMS, councillors and employees are familiarised with the concept and that they understand the phases, how it fits into the overall management cycle of the municipality and the benefits that such system will bring.
• Gearing-up for performance management-The municipality must take
steps to ensure the readiness of implementing the PMS. A
comprehensive communication campaign aimed at all employees is
essential. Appropriate management and reporting structures should be
identified and all the role-players are accordingly informed.
• Consultation of performance management - During the IDP process
communities should be consulted to collect baseline data and
developmental objectives are set. Priority should be given to
development objectives, and performance indicators aimed at
measuring these objectives should be set.
• Setting performance measurement - It is essential to set realistic
performance measures on the different hierarchical levels of the municipality by the Mayor for the Municipal Manager, and Municipal Manager for the senior managers.
• The performance management model - The municipality needs to
decide on a model to be used as prescribed by the MSA for arranging the measures so that it can be of greater assistance in the management process and to gauge progress towards achievement of strategic goals.
• The performance review and reporting - The Municipality will have to agree upon reporting structures and processes that need to be
followed: monitoring, evaluating, reviewing, giving feedback and
suggesting improvements. Feedback will also be done internally and
externally to communities, by means of an annual report.
• Auditing performance measurements - The performance audit
committee (PAC) is responsible for ensuring that reports on the
