6/10/2017. Unit Standard Conduct Performance Management in a South African Municipality DATES. Available on the website

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1 DIPLOMA IN PUBLIC ACCOUNTABILITY MODULE / MANAGING INSTITUTIONAL PERFORMANCE 1 (3 UNIT STANDARDS) US Unit Standard Conduct Performance Management in a South African Municipality Dr Len Mortimer DATES US July 2017 CONTACT BELLVILLE EXAM on 2 ND/ CONCESSION Assignment submitted DIPLOMA ASSESSMENT INSTRUCTIONS FOR TAKE HOME ASSIGNMENT and TEST Available on the website 1

2 US Assessment Plan ASSIGNMENT Assignment: words Critically comment on the success of performance management in your organisation by referring to: How your organisation implemented the legal framework for performance management and if Your organisation comply with the legal framework, guidelines and best practices by using examples of good or bad practices to support your statements. Make use of reports of oversight bodies, such as audit committees, internal and external audit and other documents such as the annual report and other reports to arrive at your final conclusion if your organisation is compliant or not and more specifically if your organisation is successful at performance management. Make recommendations based on your research/analysis of your organisation. US Assessment Plan Test Class test 25 marks Test learner s understanding of: Legislative framework Performance management concept Performance agreements and plans Community participation Participants are advised to have access to: the respective learner guide, MFMA, The Constitution of the Republic of South Africa, Local Government: Municipal Systems Act, Act 32 of 2000 and the Local Government: Municipal Structures Act, Act 117 of ABBREVIATIONS PAGE 4 During preparation/self study/watching the DVD material 2

3 TERMINOLOGY PAGES 4-5 US OUTCOMES Implement performance management systems and mechanisms in a South African municipality as required by the local government legislative framework; Write and develop performance management concepts for the effective measurement of municipal strategic and financial performance; Develop and identify the critical areas of a performance management agreement to be used as a form of contract of employment for a municipal staff member; Identify and establish institutional arrangements required for performance management in a municipality; and Apply performance management concepts to municipal service delivery. OUTCOMES UNIT 1 UNIT 1 Implement performance management systems and mechanisms in a South African municipality as required by the local government legislative framework define the concept performance management; explain how performance management fits into municipal service delivery; understand the role and responsibilities of the role players in municipal performance management; discuss the legislation governing performance management in municipalities; discuss the procedures and steps that need to be followed when developing performance management in a municipality; evaluate the role of community involvement in developing a performance management system; and explain the legislative requirements for performance reporting. 15 3

4 KEY CONCEPTS Page 15 bottom INTRODUCTION 2.3 Municipalities deliver services critical to wellbeing and development of its citizens: Effective, efficient, economical and equitable Required to: formulate strategic plans allocate resources monitor and report on results ISDP and SDBIP KPIs central to performance management 16 DEFINING THE PERFORMANCE MANAGEMENT SYSTEM (1) Craythorne: performance management is a technique applied to the performance of staff. can be applied to the performance of an organisation Venter a multidimensional construct dependent on a variety of factors Van der Walt - performance is about: the efficiency relationship between inputs and outputs the reduction of inputs or the cost of inputs the following of due process and equity the relationship among inputs, outputs and outcomes 17 DEFINING THE PERFORMANCE MANAGEMENT SYSTEM (2) Performance management is a tool to: plan budget measures implement report on activities foster good corporate citizenship and.next slide 17+ 4

5 DEFINING THE PERFORMANCE MANAGEMENT SYSTEM (3) Performance management is a tool to: ensure good governance in order to: set priorities conduct business relate to communities set organisational targets, strategic objectives and outcomes align programmes, projects and processes to individual Section 56 and Section 57 managers DEFINING THE PERFORMANCE MANAGEMENT SYSTEM (4) Management of human resources/capital is as important as management of the organisational system Important to change the existing culture and introduce skills and leadership development Human element of change management must receive attention if performance management is to succeed ROLE OF THE MAYOR, COUNCIL, MUNICIPAL MANAGER AND SENIOR MANAGERS - LEGISLATION (1) Constitution (Chapter 7) objects and developmental duties- Local Government Municipal Structures Act, 1998 (Section 19) - Municipal Council must: strive within its capacity to achieve the objectives set out in Section 152 of the Constitution annually review its overall performance White Paper on Local Government (1998): Integrated development planning, budgeting and performance management are powerful tools 19+ ROLE OF THE MAYOR, COUNCIL, MUNICIPAL MANAGER AND SENIOR MANAGERS - LEGISLATION (2) Municipal Systems Act, 2000 (Chapter 6) - Municipal Council must implement a performance management system: in line with priorities, objectives, indicators and targets in the IDP commensurate with resources and promote a culture of performance management among politicians and officials MFMA SDBIP must be based on service delivery targets and performance indicators 20 5

6 PERFORMANCE MANAGEMENT SYSTEM LEGISLATIVE AND POLICY FRAMEWORKS PAGES Constitution White Paper on Local Government, 1998 Municipal Structures Act, 1998 Municipal Systems Act, 2000 Municipal Performance Management Regulations, 2001 DPLG Guidelines - Appendix 2 Municipal Performance Regulations for Managers, 2006 Municipal Finance Management Act, 2003 MFMA Circulars IDPs and SDBIPs Batho Pele 21+ and Appendix 3 BATHO PELE Consultation Service standards Access Courtesy Information Openness and transparency Redress Value for money ADDITIONAL DOCUMENTS IDP SDBIP BATHO PELE

7 PAGES BATHO PELE Putting People First CONSULTATION You can tell us what you want to know from us. THE PRINCIPLE You should be consulted about the level and quality of the services you receive, and whenever possible you should be given a choice about the services that are offered. 2. SERVICE STANDARDS Insist that we keep our promises. THE PRINCIPLE You should be told what level and quality of service you will receive so that you may know what to expect. 7

8 3. ACCESS 4. COURTESY One and all should get their fair share. THE PRINCIPLE You and all citizens should have equal access to the services to which you are entitled. Do not accept insensitive treatment. THE PRINCIPLE You should be treated with courtesy and consideration. 5. INFORMATION 6. OPENNESS AND TRANSPARENCY You are entitled to full particulars. THE PRINCIPLE You should be given full and accurate information about the public services to which you are entitled. The administration of the public service must be open and transparent. THE PRINCIPLE You should be told how the public service is run, how much it costs, and who is in charge. 8

9 7. REDRESS 8. VALUE FOR MONEY Your complaints must spark positive action. THE PRINCIPLE If the promised standard of services is not delivered, you should be offered an apology, a full explanation, and a speedy and effective remedy. When complaints are made, you should receive a sympathetic, positive response. Your money should be used wisely. THE PRINCIPLE Public services should be provided efficiently to give you the best possible value for money. UNIT1: LEGISLATION AND POLICIES APPLICABLE Page set out to describe legislation, description and application as discussed above UNIT1: LEGISLATION AND POLICIES APPLICABLE* Legislation that governs performance actions: Appendix 3: pages 135 to 141 As summarised below 9

10 LEGISLATIVE FRAMEWORK: COUNCIL LEGISLATIVE FRAMEWORK: MAYOR Legislation S25(1) of MSA S34(a)(i) of MSA S38 of MSA S40 of MSA S41 of MSA S42 of MSA S43 of MSA S44 of MSA S16 of MFMA S 24 of MFMA S129 of MFMA Action Adopt 5 year IDP Review IDP Establish PMS Establish mechanisms to monitor and review PMS Set KPI s, targets and objectives Involve local community in the development, implementation, review of PMS KPI s must include general KPI s as per regs Make known KPI s and performance targets Approve annual budget Consider approval of annual budget Consider the annual report and adopt an oversight report Legislation S30(a) + (b) S39 of MSA S21(1) (b) of MFMA S33(1)(c) of MFMA S53(3)(a) of MFMA S53(3)(b) of MFMA S53(2) of MFMA S72 of MFMA S127 of MFMA Action Manage drafting of IDP and submit for adoption by council Manage development of PMS Table time table for budget and IDP review process Must take reasonable steps to ensure that: Council approves budget timeously, approves SDBIP within 28 days after budget is approved, annual performance agreements of Sec 56 are signed Publish SDBIP Publish performance agreement of Accounting officer and senior managers Submit reports to Council on implementation of budget and financial affairs Table Sec 72 report in Council Table annual report in Council LEGISLATIVE FRAMEWORK: ACCOUNTING OFFICER Legislation S46 of MSA S57 of MSA S17 of MFMA S22 of MFMA S68(a) of MFMA S69(1) of MFMA Action Submit performance reports annually Conclude employment contracts for MM and managers Contents of budget and supporting documentation must conform to provisions of Sec 17 of MFMA Publish budget, invite public comment, submit to NT Must assist mayor in performing budgetary functions Must implement approved budget COMMUNITY PARTICIPATION PROCESSES (1) Constitution, Municipal Structures Act, 1998 (Chapter 4), Municipal Systems Act, 2000 (Chapter 6 Section 42) ACCORDING TO CRAYTHORNE-NEXT SLIDE 36 10

11 UNIT 1: COMMUNITY PARTICIPATION PROCESSES * Why community participation? Involvement communities in affairs of gov. Reduces autocratic behaviour Continuous interaction between role players Community can express needs & grievances Stakeholders can present the interest of their constituencies Monitor & Oversight of implementation of IDP Create a sense of ownership on the side of community COMMUNITY PARTICIPATION PROCESSES (2) Constraints: lack of capacity and resources four areas must be addressed: time transport education communication access and more recently apathy FORUMS PURPOSE OF FORUM PAGE 38 PAGE 38 BOTTOM Provide an opportunity for stakeholders to represent the interest of their constituencies; Provide a structure for discussion, negotiations and joint decision-making; Ensure proper communication between all stakeholders and the municipality; Monitor the planning and implementation process; 11

12 COMMUNITY PARTICIPATION PROCESSES (3) TOP PAGE 41 Systems Act does not prescribe form of participation but principles SUCH AS the need to consider the special concerns of people with physical disabilities the need to take note of gender issues the importance of taking into consideration language preferences (Constitution Section 6) the need to ensure that participatory processes are in line with the financial and administrative capacity of the municipality 41 PERFORMANCE REPORTING LEGISLATIVE REQUIREMENTS (1) Corporate governance - greater corporate responsibility and the conduct of business within acceptable ethical standards. Transparency, accountability and openness - reporting and disclosure of information are vital for good corporate governance 41 PERFORMANCE REPORTING LEGISLATIVE REQUIREMENTS (2) PERFORMANCE REPORTING LEGISLATIVE REQUIREMENTS (3) Overview of reports on Pages Monthly budget statements Quarterly IDP and SDBIP reporting Mid-year budget REPORT Performance report - Section 46 MSA Annual report Oversight report Designed to identify under-performance Provide for corrective measures 42+ Non-compliance by Accounting Officer or Mayor of reporting requirements MFMA (Section 133): Mayor must TABLE REASONS TO COUNCIL Auditor-general must INFORM SPEAKER AND Municipal Council must REQUEST SPEAKER TO Provincial Executive may INTERVENE National Treasury may TAKE STEPS Provincial Treasury may TAKE STEPS

13 ACTIVITY/CLASS DISCUSSION Page UNIT 2 Write and develop performance management concepts for the effective measurement of municipal strategic and financial performance 52 OUTCOMES UNIT 2 UNIT 2: INTRODUCTION Apply individual financial and non-financial performance management concepts within a municipal performance management system; Develop and apply institutional financial and non financial performance management concepts applicable within a municipal performance management system; and Differentiate between outputs and outcomes within a municipal performance management system. 52 As you know by now, performance management is a process: mission objectives staff Applies to performance and persons related to it Include politicians Things that a municipality simply must do: establish PMS promote culture of PM administer affairs eee & in accountable manner establish KPI s 52 13

14 INDIVIDUAL FINANCIAL AND NON-FINANCIAL PERFORMANCE MANAGEMENT CONCEPTS (1) Performance of an institution linked to that of the staff Employment contracts of Municipal Managers and managers reporting to them (Section 56 and 57 Managers): fixed term not exceeding a period ending one year after election provision for cancellation for non-compliance performance agreement ( 90 days after appointment) with performance plan, personal development plan and personal disclosures 54+ UNIT 2: PERFORMANCE AGREEMENT* Must include: Purpose of perf agreement Commencement and duration Performance objectives PMS Evaluating performance Schedule for perf review Developmental requirements Obligation by employer Consultation Management Of evaluation outcomes Dispute resolution General 55 UNIT 2: PERFORMANCE PLAN Must include: Performance and targets with timeframes Standards & procedures for evaluating Consequences for substandard performance Targets must be practical, measurable, based on KPI s set out by IDP INDIVIDUAL FINANCIAL AND NON-FINANCIAL PERFORMANCE MANAGEMENT CONCEPTS (2) Key performance areas for managers: KPA 1: Municipal transformation an organisational development KPA 2: Basic service delivery KPA 3: Local economic development KPA 4: Municipal financial viability and management KPA 5: Good governance and public participation

15 PERFORMANCE MANAGEMENT CONCEPTS Many models applicable to performance management: Balanced Scorecard Logic Model Business Excellence Model 56+ PERFORMANCE MANAGEMENT PLANNING Development of the IDP SWOT and Gap Analysis Analysis:S35 MSA AND IDP GUIDE PACK Compilation of existing information Community and stakeholder level analysis Reconciling existing information community and stakeholder level analysis Municipality level analysis Economic analysis Environmental analysis Institutional analysis Spatial analysis Socio-economic / gender differentiation Identification of municipal priority issues In-depth analysis of priority issues Sector specific requirements Consolidation of analysis results TO IMPROVE PERFORMANCE Restructuring Improve processes and systems Training and sourcing additional capacity Change management and education programmes Revise strategy Consider alternative strategies

16 Performance management strategies (2) Vision statement focusses on municipality s future Mission statement describes the municipality s present capabilities, customer focus, and activities Strategic objectives broadest statements of what an organisation chooses to accomplish Key performance areas (KPAs) strategic processes that need to be addressed in terms of the vision and mission: Municipal transformation and organisational development Basic service delivery Local economic development Municipal financial viability and management Good Governance and public participation Relationship between outputs and outcomes P R O C INPUTS E OUTPUTS OUTCOMES S S E S Key performance indicators are important because they: provide a common framework for gathering data for measurements and reporting translate complex concepts into simple operational, measurable variables enable the review of strategic objectives assist in policy review processes help focus the organisation on strategic areas help provide feedback to the organisation and staff Local Government Municipal Planning and Performance Regulations (2001) A municipality must set KPIs, including input, output an outcome indicators KPIs - measurable, relevant, objective, precise (SMART) Ensure public participation KPIs for all admin units, employees, entities, service providers

17 Outcomes, input, output and baseline indicators (1) Input indicators - measure costs, resources, time (economic) Output indicators - measure yield in products (efficiency) Outcome indicators - measure impact (effectiveness) Composite indicators - combine a set of indicators into one by developing mathematical relationship between them Baseline indicators - current situation Outcomes, input, output and baseline indicators (2) Effectiveness, efficiency and economy And equity municipal performance management system (1) Effectiveness, efficiency and economy And equity municipal performance management system (2) Efficiency - productively of inputs to outputs (output) Effectiveness: outputs achieve desired outcomes (outcome) Economy - inputs acquired at lowest cost, right time and method of producing outputs is economical (input) Equity - services provided impartially, fairly, equitably

18 ACTIVITY/CLASS DISCUSSION Page UNIT 3 Develop and identify the critical areas of a performance management agreement to be used a form of a contract for a municipal staff member 76 OUTCOMES UNIT 3 UNIT 3: INTRODUCTION Describe the processes applicable to developing performance agreements based on relevant legislation; Adapt disciplinary procedures to include performance agreements. In terms of Section 19 of the Municipal Structures Act, Sections 39, 40 and 41 of the Municipal Systems Act and Regulation 7(2) of the Municipal Planning and Performance Management Regulations, a Local Government Structure shall develop a Performance Management System (PMS)

19 Performance agreement is developed based on all required processes Overview of processes on Pages (Page 81) UNIT 3: MANAGERS REPORTING TO MM KPAs negotiable and relate to functional areas of manager: 80% of score CCR: 20% of assessment score-selected from list on pages Core Competency Requirements (Page 81) AMENDED 81, Evaluating the performance of the Municipal Manager the panel Reg 27(4)(d) Executive Mayor or Mayor Chairperson of the performance audit committee or audit com in absence of perf audit comm Member of mayoral or executive committee Mayor and/or municipal manager from another municipality Member of a ward committee as nominated by the Executive Mayor or Mayor 83 Evaluating the performance of the Managers reporting to Municipal Manager the panel Reg 27(4)(e) Municipal Manager Chairperson of the Performance Audit Committee or.. Member of the mayoral or executive committee Municipal manager from another municipality 83 19

20 UNIT 3: ANNUAL PERFORMANCE APPRAISAL* What needs to be assessed/ measured during appraisal? Assessment of the achievement of each KPA. An indicative rating on the five-point scale for each KPA. (80%) Assessment of each CCR according to the extent to which the standard have been met. An indicative rating on the five-point scale for each CCR. (20%) 83 Staff establishment for a municipality Municipal Systems Act, 2000 (Section 66) - Municipal Manager must: approve(develop; sec 8 Act 7/2011) a staff establishment for a municipality APPROVED BY COUNCIL No person appointed unless (sec 8(b)(3)) approved staff establishment provide a job description for each post indicate remuneration package Establish evaluation mechanism Employment Equity Act, a municipality must develop and adopt appropriate systems and procedures to ensure fair, efficient, effective and transparent personnel administration 84 Performance management system staff Poor performance: Poor systems and processes Inappropriate structure Lack of skills and capacity Inappropriate organisational culture Absence of appropriate strategy Overview of processes on Pages Disciplinary process are adapted to include performance agreements Guidelines: Addressing poor performance and incapacity Formal poor performance counselling sessions Formal disciplinary process corrective action

21 ACTIVITY/CLASS DISCUSSION Page UNIT 4 Identify and establish institutional arrangements required for performance management in a municipally 92 OUTCOMES UNIT 4 Develop technical systems to incorporate institutional and individual performance management; Identify and incorporate cultural differences into a municipal performance management system; Explain how the requirements of a performance management system will impact on organisational structures forecast Performance monitoring and auditing (1) Core function of a municipality is service delivery to community IDP and SDBIP Performance management system: key to integrating IDP and SDBIP means of measuring impact of service delivery

22 Performance monitoring and auditing (2) Municipality must establish and develop systems to: monitor validate assess evaluate report and review performance Performance monitoring and auditing (3) Monitoring is: regular observation ad recording of activities process of routinely gathering data giving feedback on progress on achieving KPAs and KPIs an on-going process that runs parallel to the implementation of the IDP Municipality must develop a monitoring framework that: identifies role-players allocates specific tasks Performance monitoring and auditing (4) Auditing: is a validation of how the municipality rates itself i.t.o. its achievements verifies evidence provides motivation in relation to the principles of sound corporate governance (King II [2002] triple-bottom line) Performance monitoring and auditing (5) Internal auditors of a municipality: must audit performance on a continuous basis must submit quarterly reports to the Municipal Manager and Performance Audit Committee once validation received from Committee and problem areas have been rectified, different reports can be generated e.g. Section 71 reports IT systems Overview of systems on Pages

23 Cultural considerations for performance management MFMA and other related national legislation aim to help municipalities establish a new performance culture refers to a system of shared meaning held by members, distinguishing the organisation from other organisations Organisational culture and change Hofstede s Model of National Culture: High power-distance low power-distance Individualism collectivism Masculinity femininity High uncertainty-avoidance low uncertainty-avoidance Long-term and short-term orientation 100+ UNIT 4: ORGANISATIONAL CULTURE Organisation culture is what sets one organisation apart from another Top management: behaviour, actions, attitudes and even dress code affects culture of organisations Different staff structures/organogram 102 Impact on organisational structures Six key elements managers need to address when they design the organisational culture: work specialisation departmentalisation chain of command Span of control centralisation and decentralisation Formalisation Key questions Page Organisational structures Simple structure The bureaucracy The matrix structure

24 ACTIVITY/CLASS DISCUSSION Page 104 UNIT 5 Apply performance management concepts to municipal service delivery 107 OUTCOMES UNIT 5 Key Performance Areas Develop key performance areas and indicators for financial and non-financial purposes; and Develop and apply performance targets in terms of financial and non-financial performance within municipalities. KPA 1: Municipal transformation an organisational development KPA 2: Basic service delivery KPA 3: Local economic development KPA 4: Municipal financial viability and management KPA 5: Good governance and public participation

25 Key Performance Indicators (1) Key Performance Indicators (2) Provide a common framework for gathering data for measurements and reporting Translate complex concepts into simple operational, measurable variables Enable the review of strategic objectives Assist in policy review processes Help focus the organisation on strategic areas Help provide feedback to the organisation and staff Measurable Simple Precise Relevant Adequate Objective Realistic Key Performance Indicators (3) Municipal Systems Act, 2000 (section 43) national KPIs: The percentage of households with access to basic services The percentage of households earning less than R3000 per month with access to free basic services The percentage of a municipality s capital budget actually spent on capital projects i.t.o. the IDP The number of jobs created through a municipality s local economic development initiatives The number of people from employment equity target groups employed in the three highest levels of management The percentage of a municipality s budget actually spent on implementing its workplace skills plan Financial viability 110 Performance targets developed for measuring financial and non-financial performance Requirements for setting targets: public needs to be consulted on their needs and expectations politicians need to give clear direction line managers need to advise as to what a realistic and achievable commitment Decision-makers must then make a contractual commitment

26 Appendices 1 Roles and responsibilities within the municipal performance management system ACTIVITY/CLASS DISCUSSION Page The Performance Management Guide for Municipalities 3 Legislative compliance checklist 4 Example of a Performance Agreement 5 Example of a Personal Development Plan template 117+ SCHOOL OF PUBLIC LEADERSHIP Thank you Len Mortimer len@sun.ac.za 26