1 INTRODUCTION One of the hallmarks of a transforming and accountable city that is committed to improving quality of life for its citizens, is the successful application of its performance management system. Such application allows elected representatives and communities to gain insight into, and make judgments about, the City and the effectivity and efficiency of its strategy, processes and people. In this way, policy and legislation imperatives will be translated into service delivery DEFINING PERFORMANCE MANAGEMENT Performance management is the setting and measurement of desired outcomes and activities of an organisation, the organisation s individual components, and the staff who contribute to the achievement of its strategic vision. It is a multilevel process that starts with an overall strategy and cascades into individual performance management and appraisal. The City has adopted this definition because it accepts that its performance must be measured at many levels and in a comprehensive manner. Performance management encompasses the monitoring, measurement and reporting of performance at a citywide, organisational (departmental, regional, UACs) and individual level. LEGAL AND REGULATORY DEVELOPMENTS The building blocks of the City s approach to performance management include: Development and formal adoption of a system that complies with the Municipal Systems Act and the Municipal and Performance Management Regulations of The system represents the municipality s cycle and processes of performance planning, monitoring, measurement, review, reporting and improvement Development of performance indicators (including prescribed indicators) that encompass inputs, outputs and outcomes, and enable the measurement of strategic/ developmental priorities and objectives - setting targets in relation to these indicators. These indicators should be reviewed, refined and changed annually, if necessary Establishment of formal mechanisms to monitor, measure and review performance. This would include performance audit committees and management information systems REVIEWING PERFORMANCE MANAGEMENT During the 2003/04 financial year, the City initiated the balanced scorecard approach to planning and performance management. This led to the development of a City Scorecard, Departmental Scorecards and Individual Performance Scorecards. The balanced scorecard is an analytical tool that brings together, on a single management report, many of the disparate elements of an organisation s strategic agenda. It forces the organisation to consider all the important operational measures together, thus highlighting or illustrating whether improvement in one area was achieved at the expense of another. Entailed in the balanced scorecard approach is the need for a continuous review process. A review of the process (2003/04), including comments from the Auditor-General in his assessment on the results of the City s performance measurement, has highlighted the following issues: Communities inputs into the process plan were not considered in adopting the documented process for drafting the IDP Consultation with communities during the development of the PMS framework and process did not take place Key performance indicators (KPIs) were not classified as input, output and outcome indicators The performance management system did not prescribe a process of setting performance targets
2 Tracking performance of individual staff and service providers was manual The performance of staff was only tracked up to level four Performance reporting to the Council by the core administration was carried out annually, instead of at least twice a year The internal audit has not assessed the City s Performance Management System s functionality, compliance, and the extent to which performance measurements are reliable Performance reporting is not allowing specific reporting on the results of general (national) key performance indicators (KPIs) A Performance Audit Committee has not yet been appointed There is lack of clarity on the role of internal auditors in performance management While the review has highlighted a number of challenges, the City has, during the same financial year, made the following strides during the implementation of the system: All senior management signed performance management agreements The external Performance Management and Remuneration Panel met regularly The second and third coaching sessions of senior managers were implemented on the automated system A business planning and management tasks team (BP&PM) is convened on a regular basis to assess performance management practices within the City and make recommendations to management New staff members were trained in the City s PMS as part of their induction process Individual learning plans were developed The City s performance management is not only about the setting and measurement of desired outcomes and activities of an organisation, but also the continuous review of its performance against set indicators and targets, to allow for continuous improvement of the system. THE CITY S APPROACH TO PERFORMANCE MANAGEMENT The City s performance management approach is part of a broader system of strategic management. This strategic management system ensures that the City is directed through the integration of planning, budgeting and performance management processes. The performance management process then unfolds at a number of different levels, each aligned to the next. The city-wide level focuses on city-wide performance, the organisational performance management level focuses on performance of the departments, regions and UACs. The individual performance management level focuses on individual staff members. Though aligned, the levels differ in the types of indicators that are used to assess performance. The figure below demonstrates the alignment between the three levels and also indicates the different measurement and the tools used in each level. The performance management process then unfolds at a number of different levels, each aligned to the next: The citywide level focuses on the City s overall performance The organisational performance management level focuses on the performance of departments, regions and UACs The individual performance management level focuses on individual staff members Though aligned, the levels differ in the types of indicators that are used to assess performance. Figure X.XX illustrates the alignment between the three levels and also indicates the different measurement tools used in each level.
3 This year, the City continues to place more emphasis on developing outcome and output indicators. This is to ensure that improvements in the quality of life of the City residents can be adequately measured. In addition, emphasis on output and outcome indicators will strengthen both the planning and performance management systems within the City. CURRENT STATUS OF PERFORMANCE MANAGEMENT IN THE CITY The City s performance management system is both dynamic and evolving. It is premised on principles of continuous need for improvement. In ensuring continuous improvement on the City s system, a number of initiatives will be undertaken to nurture and harness the system s capability at all three levels. CITYWIDE LEVEL The City has initiated an inclusive business planning assessment process to ensure that the core departments, regions and UACs have included measures to report on the general (national) prescribed KPIs. In addition, this process has emphasised a bias towards output and outcome indicators: As part of continuous performance monitoring and improvement, the City is implementing the City Service Monitor, to monitor and track performance of core departments (Health, Housing and Social Development). The City Service Monitor enables the City to collect performance data on service delivery across the regions, against the service delivery plans, which are identified through the IDP process In addition, the City is piloting an activity based costing project. It s aim is for the City to be in position -, upon completion of the project - to allocate resources equitably across the City and standardise the quality of service delivery within the City An accountability matrix between the City, through Office of the City Manager, Contract Management and the Share Holder Units, has been developed to enhance the performance management of service providers (UACs)
4 A brief, pocket size PMS handbook will be circulated to communities. This handbook will explain how the City performance management system works. Communities would also be invited to comment on the system The City will continue to assess the perceptions of residents - through the annual survey on the quality of services it renders and the mechanisms, processes and systems of service delivery The Human Development Agenda (HDA) has been initiated to create a policy framework through which the City can begin to tackle issues regarding poverty and quality of life, in a substantive way. It is envisaged that when completed, the agenda will consider how best to assist and empower specific vulnerable groups in the City - including women, children, youth and migrants ORGANISATIONAL LEVEL The development of balanced scorecards for the departments, regions and UACs has ensured that the performance indicators cover key strategic areas including political and developmental priorities, legislative compliance, and the departments core mandates or business. Scorecards have been reviewed to assess sources of evidence relating to the indicators and to identify gaps. A process to ensure that the new scorecards (2004/05) outline both the annual as well as quarterly targets, has been initiated. The performance management system at the organisational level has been consolidated by: The appointment of a performance management specialist Further refinements on the automation of the system A performance management knowledge sharing seminar will be conducted within the City, to provide broader understanding of performance management and to share best practices. A business planning and management tasks team (BP&PM) is convened on a regular basis to assess performance management practices within the City, and to make recommendations to management. INDIVIDUAL LEVEL Cascading of performance management to individuals within the City, is the cornerstone of the system. The performance management system at the individual level is aimed at clearly identifying what it takes to achieve the strategic agenda and political priorities. It also serves to ensure that management and staff understand what they are responsible for, in achieving the City s goals. The following initiatives have been undertaken to ensure that accountability for performance is constantly assigned and well understood: The work of the performance management and remuneration panel - to monitor performance and evaluate senior managers - will continue to be harnessed to ensure improvement Managers and strategic support staff will continue to be trained on the utilisation of the automated system - to simplify the process of managing the performance of senior management, and to improve performance reporting Performance agreements by all senior managers up to level 4 will be concluded within one month after the beginning of the municipal financial year New scorecards (2004/05) outline both the annual, as well as quarterly targets, to align to the electronic performance tracking system developed by the City
5 A process of performance managing other levels of employees in the City is continuing. A number of levels, 5 or lower, have signed scorecards Employees are encouraged to develop individual learning plans (ILPs) - to acquire competencies that strengthen high levels of performance on their key performance areas. A process to measure the demonstration of newly acquired competencies, will be initiated in the next financial year. CONSOLIDATING PERFORMANCE MANAGEMENT AND CITY PERFORMANCE The continuous review of the City s performance management system is understood, not only within the legislative requirements, but also in the context of sustained efforts to leverage performance drivers in the organisation. Such understanding elevates the City s performance management to a living system, characteristic of highly performing organisations. Performance management will continue to underpin the review of the IDP.