Delivery Management Guidelines Practice Guide 3 - Performance Management

Transcription

1 Delivery Management Guidelines Practice Guide 3 - Performance Management Version control Version 9-1 Date Status Draft

2 The IDMS Prov Infr Strat DP1: Portfolio Management DP1-1 Infrastructure Planning DP1-2 Programme Management Develop Develop Develop/review U-AMP (including Develop/review C-AMP (incl Authorise Monitor & /review Constr /review prioritised MTEF works list) portfolio level Work Plans) Implementation Control Proc Strat IPMP Close Out U-AMP C-AMP Manage Implementation G1(a) G1(b) G2 PC PF1.1 PF1.2 PF1.3 PF1.4 PF2.1 1 PF5 PF2.2 PF2.3 PF3 PF4 DP2: Project Management DP2-1 Implementation Planning DP2-2 Design DP2-3 Works DP2-4 Close Out PC 2 Prepare Packages Define Packages Develop/Review IPIPs (Prgr & Proj level) Design devlpmt Detailed design Compile MFC Info Construct / Deliver works Handover works Contracts Close Out PEP1 PEP2 IPIP PEP3 PEP4 PEP5 PEP6 PEP7 G3 G4 PC PC G5 PC G6(a) PC G6(b) G7 G8 3 4a 5 4b T1 T2 PF1.3 PF1.4 PF2.1 PF2.2 PF2.3 PF3 PF4 PF5 Adminstv Close Out DP3: Operations & Maintenance DP3-1 Recognise & accept assets DP3-2 Mobilisation for Facilities Mgt DP3-3 Operations DP3-4 Maintenance DP3-5 Demobilisation of Facilities Mgt G8 PF1.3 PF1.4 PF2.1 PF2.2 PF2.3 PF3 PF4 PF5 Delivery Management Guidelines: Practice Guide 3: Performance Management 2

3 Structure of the Infrastructure Delivery Management Toolkit (IDMT) Management Companion Delivery Management Guidelines PG1: Prov Infr Strategy PG3: Perform Mgt Practice guides PG2: Constr Proc Strat Infrastructure Delivery Management System (IDMS) Delivery Management Guidelines: Practice Guide 3: Performance Management 3

4 Table of Contents 1. Purpose of this module Where am I within the Delivery Management Guidelines Introduction How to use this practice guide Performance management for service delivery The performance management process Performance management and infrastructure management Outcomes based performance management Accountability through reporting Performance of the individual The performance management system for infrastructure management Performance management definition Integrating service delivery performance management Performance Management Roadmaps Developing performance indicators Step 1.1: Agree on what you aim to achieve (Impacts and Outcomes) Step 2: Specify the Outputs, Activities and Inputs Step 3: Select Key Performance Indicators (KPI s) Step 4: Set realistic Performance Targets Step 5: Determine the process and format for Reporting performance Step 6: Establish Processes and Mechanisms to facilitate corrective action Points to consider Monitor and evaluate programme, project and operational performance Step Collect Work Performance Data Step 2.2 -Collect Budget Forecasts Step Evaluate performance Step Analyse and synthesize data into information Step Make performance information available to corporate systems and functions Publish performance information Step Develop a reporting register Step Develop report templates Step Produce, publish and distribute reports Step Confirm receipt and obtain feedback Review and appraise performance of individuals Step Develop and maintain Master Responsibility Assignment Matrix and provide performance information to HR function Step Provide Individual Performance Information to HR function Step Provide Management with performance management information Take management action...30 Delivery Management Guidelines: Practice Guide 3: Performance Management 4

5 5.5.1 Step Obtain and study performance related information and critically reflect on root causes of good and bad performance Step Extract and disseminate learning from good performance to improve performance in other areas Step Take appropriate action to address causes of poor performance Putting it all together how performance management works The Performance Management System A practical example Legislative requirements The Framework for the Infrastructure Grant to Provinces (IGP) Establishing and improving the performance management function Conclusion...41 Table of Figures Figure 1: Performance Management in relation to other modules...6 Figure 2: Performance Management - The Outcomes based model for improved service delivery...8 Figure 3: Performance Management - Overview and context of the process...9 Figure 4: The Outcomes based Performance model...11 Figure 5: The Performance Management System for infrastructure management...14 Figure 6: Performance Management to integrate service delivery...16 Figure 7: Performance Management Function The highest level performance management process...17 Figure 8: Performance management roadmap...18 Figure 9: Roadmap 1: Develop Performance Indicators...19 Figure 10: Roadmap 2: Monitor and Evaluate performance...24 Figure 11: Roadmap 3: Publish Performance Information...27 Figure 12: Roadmap 4: Review and appraise performance of individuals...29 Figure 13: Roadmap 5: Take management action...30 Figure 14: The Performance Management System for infrastructure management in the Toolkit context...32 Figure 15: Programme structure...33 Figure 16: Organisational structure...34 Figure 17: The RASCI table for the Capital Programme...34 Figure 18: Capital Programme Team Structure...35 Figure 19: Project delivery targets...35 Figure 20: Project reporting template...36 Figure 21: Two Performance graphs...36 Figure 22: Project 107 pie chart...36 Figure 23: Programme level report...37 Figure 24: The complete example...38 Figure 25: Aligning many different cycles...39 Delivery Management Guidelines: Practice Guide 3: Performance Management 5

6 1. Purpose of this module The purpose of this module is to: Introduce users to the concepts of performance management and how they relate to infrastructure management Guide users in developing performance indicators Guide users in monitoring and evaluating programme, project and operational performance Guide users in publishing performance information Guide users in reviewing and appraising performance of individuals Guide users in taking management action Provide the outline of a performance management system 2. Where am I within the Delivery Management Guidelines PG1: Strategy PG3: Perf Mgt Practice guides PG2: Constr Proc Strat Figure 1: Performance Management in relation to other modules Delivery Management Guidelines: Practice Guide 3: Performance Management 6

7 3. Introduction 3.1 How to use this practice guide This performance management practice guide is structured as follows: Part 1 An introduction to the subject matter. Part 2 Presents a more detailed discussion on the concepts of outcomes based performance management and how these are integrated throughout government legislation and toolkit guideline documentation. This section builds the arguments supporting the way in which performance management for service delivery is applied in this toolkit guide. It also clearly indicates the legislated and statutory imperatives for compliance with the principles presented in this toolkit. Part 3 Starts with a high level process flow diagram or roadmap of the performance management process to be followed across each department from top management down to the most junior project manager. This process presents five process steps that are each broken down into their own roadmaps showing the lower level steps to be followed. Part 4 Presents more detail on how performance management works and how it would be applied in a department. Each of the other toolkit delivery management guides contains a relevant performance management section that discusses specific aspects of performance management and indicators. The roadmaps presented in section 4 of this guide also form the backbone of the toolkit s Infrastructure Delivery Management System, or IDMS, where these steps are expanded upon with inputs and outputs and related responsibility assignments. The IDMS also links the process steps to examples, templates and other supporting information. Delivery Management Guidelines: Practice Guide 3: Performance Management 7

8 3.2 Performance management for service delivery Agree desired Impacts Agree necessary Outcomes Confirm achievement of Impacts Monitor and Evaluate Outcomes Specify Outputs Plan Activities Plan and Provide Inputs Compare actual against Planned Monitor and Evaluate Outputs Perform Activities Deploy Inputs Outcomes Performance Management Approach Figure 2: Performance Management - The Outcomes based model for improved service delivery Performance management for service delivery (as illustrated in Figure 2 above) is: An ongoing, systematic approach to improving infrastructure management and infrastructure delivery results. (Results are defined and categorised as inputs, activities, outputs, outcomes and impacts) This is achieved through a clear sequence of events based on critical reflection and managerial action in response to analysis of the relationships between: o Agreement on the desired impacts flowing from the agreed planned strategic objectives o The planning of the necessary outcomes and specific inputs, activities and outputs required to achieve those outcomes and associated impacts o The deployment of inputs and the generation of service delivery outputs through planned activities o The achievement of associated outcomes and impacts resulting from the outputs delivered The performance of programmes, projects and operations are mapped to the performance of those individuals responsible for the performance of the work and accountable for the results achieved The results are accounted for through publication of reports recording actual performance against planned targets Reviewing and appraising the performance of individuals responsible for the performance of deploying the inputs, performing the activities and measuring the performance is vital for the success of the performance management system. This step does not only happen once per year, but on an ongoing basis and must input into and be part of management action Delivery Management Guidelines: Practice Guide 3: Performance Management 8

9 Variances from planned performance are followed by management action to rectify, normalise and improve poor or unacceptable delivery performance of the portfolio, programme, project and individual. Management action must also exploit good performance by rewarding those responsible for achieving excellence and disseminating that learning in order to continuously improve the organisation. Performance management is integrated into all aspects of a department s management and policy-making processes and transforms the department s programme management, project management and operational practices so that they are focused on achieving improved service delivery results for the public in the spirit and letter of the Batho Pele principles. Performance management of individual departments are also integrated into the provincial delivery strategy and national sector and cluster service delivery strategies in the spirit and letter of the principles of the National Planning Commission and the Government-wide monitoring and evaluation policies of the Presidency. 3.3 The performance management process The process of performance management applicable to an individual department is presented in graphical form in Figure 3 below, which also places this guide in the context of other toolkit guides. Indicators and targets Roles and responsibilities Strategic Inputs Strategy and objectives Module 3 Portfolio Portfolio Planning Management 1 - Develop Performance Indicators Decision information Module 4 Project Implementation Management 3 - Publish Performance Information Module 5 Operations and and Maintenance 2 - Monitor & Evaluate Progr, Proj and Ops Performance Module 6 Procurement 4 - Review & Appraise Performance of Individuals Progress Tracking Performance data Performance information 5 - Take Management Action Figure 3: Performance Management - Overview and context of the process Performance management is an integral part of every topic covered in all of the other guides of this toolkit as it is an integral part of the corporate fibre of every activity and process of any organisation in the public or private sector. Performance management is the responsibility of every single manager responsible for any part (big or small) of the service delivery value chain across all spheres of government, from the Director Delivery Management Guidelines: Practice Guide 3: Performance Management 9

10 General, Head of Department or Municipal Manager down to the most junior manager tasked with the delivery of a specific project or the execution of a specific operational maintenance function. The performance management process consists of only five high level process steps, namely: 1. Develop performance indicators 2. Monitor and evaluate programme, project and operational performance 3. Publish performance information 4. Review and appraise performance of individuals 5. Take management action. The relationships between this guide and the other toolkit guides will be discussed in general in the next section. 4. Performance management and infrastructure management 4.1 Outcomes based performance management Outcomes Based performance Management: President Jacob Zuma has yesterday in his State of the Nation Address presented to the nation some of these outcomes and measurable outputs. The outcomes effectively mark the beginning of a process for improving government performance and providing focus to our delivery. This is the year of improving service delivery and a year of action. The outcomes approach we have adopted is based on a few questions that government had to ask to achieve its objectives: What are the key outcomes that government wants to achieve? Which priority outputs should we measure to see if we are achieving each outcome? Where should the system focus in order to achieve the outputs? How much do we need to invest, within limited resources, to achieve the best mix of desired outcomes? What targets should we set to achieve our desired results? Minister Collins Chabane, Feb The South African Government has adopted an outcomes-, or results-based performance management approach. In this section of the module, various components of, and statements about, outcomes performance management are brought together to support the performance management for service delivery model defined in the previous section. The Framework for Managing Programme Performance Information 1 emphasises the importance of having performance information available to managers and summarises the results-based approach to managing service delivery in the following statement: This approach emphasises planning and managing with a focus on desired results, and managing inputs and activities to achieve these results. In the Green Paper on National Strategic Planning 2 the Presidency states: 1 Framework for Managing Programme Performance Information, 2007, Published by National Treasury. Delivery Management Guidelines: Practice Guide 3: Performance Management 10

11 We proceed from the understanding that governance consists of a continuum of related activities which feed into one another: policy development, strategic and operational planning; resource allocation; Implementation; performance monitoring and evaluation. The green paper continues to make it clear that it is the responsibility of all departments and spheres of government to undertake elements of each of these activities. Performance monitoring and evaluation is therefore the responsibility of every government department involved in the delivery chain, the level of detail is to be appropriate as to where the respective department is in terms of the reporting chain. The Policy Framework for the Government-wide Monitoring and Evaluation System (GWM&E) 3, defines a monitoring and evaluation system as: A set of organisational structures, management processes, standards, strategies, plans, indicators, information systems, reporting lines and accountability relationships, which enables national and provincial departments, municipalities and other institutions to discharge their M&E functions effectively. The GWM&E policy continues by stating that the GWM&E system is intended to facilitate: A clear sequence of events based on critical reflection and managerial action in response to analysis of the relationships between the deployment of inputs, the generation of service delivery outputs, their associated outcomes and impacts. Impacts Desired results from achieving specific outcomes Outcomes Outputs National Programme Level Outcomes Sector Programme Level Outcomes Provincial Programme Level Outcomes Departmental Programme Level Outcomes Project Outputs Operational Outputs Maintenance Outputs Activities Project Activities Operational Activities Maintenance Activities Inputs Human Resource Inputs Financial Resource Inputs Technology Resource Inputs Figure 4: The Outcomes based Performance model 2 Green Paper: National Strategic Planning; September 2009, published by The Presidency 3 Policy Framework for the Government-wide Monitoring and Evaluation System, November 2007, published by The Presidency Delivery Management Guidelines: Practice Guide 3: Performance Management 11

12 From the above extracts a clear picture is emerging, namely that monitoring and evaluation (M&E) is much more than just identifying and measuring performance indicators. The reference to reporting lines and accountability clearly links M&E and performance of work to the performance of the individual on the one hand while on the other hand the outcomes based approach links performance management back to the achievement of strategic objectives. 4.2 Accountability through reporting National Treasury s Induction Manual for Accounting Officers provides the following definitions and guidance: Accountable: Accountability: Required or expected to justify actions or decisions Obligation of an individual, firm, or institution to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner. It also includes the responsibility for money or other entrusted property. The Induction Manual for Accounting Officers states: A further requirement for performance information stems from the responsibility of public institutions to publish administrative and performance information, to account to Parliament and provincial legislatures as outlined in the Constitution sections 92 and 114. Provincial MECs are accountable to their legislatures and have to provide these with full reports on matters under their control. The Guide for the Implementation of Provincial Quarterly Performance Reports expands on the above concepts as follows: The fundamental role of managers, whether individually or collectively, is to manage performance. In South Africa, accountability for performance management is governed by the PFMA, the Framework for Programme Performance Information, the Public Audit Act No. 25 of 2004 and DPSA Regulations. Accountability is reinforced by the practical requirements of workplace agreements and financial management reforms. Programme performance management strategies, processes and systems, whether for departments or independently legislated statutory authorities, must provide the information required by managers to continuously measure, monitor, evaluate, and improve program performance. Performance management therefore also includes accounting through reporting on the performance of the organisation in respect of achieving delivery results to internal and external governance institutions. The Induction Manual for Accounting Officers published by National Treasury summarises the accountability cycle and links results (outcomes) to strategy as follows: In short, the cycle of accountability connects the national strategic plans and priorities with the allocation of funds in the budget to the reporting by departments, as to how they have utilised funds, and the results that have been created as a result. As managers, accounting officers need to know whether programmes of their institutions are delivering the expected results. This is a key imperative for any manager in any form of institution. Monitoring of the performance of programmes is a key management tool, which is indispensable for managers in both the public and private sector. The purpose of performance monitoring and evaluation is to provide performance information so that performance information can be reported. Performance information is then used by managers to apply the Delivery Management Guidelines: Practice Guide 3: Performance Management 12

13 principles of results or outcomes based management to manage performance, including that of the individual, to address issues relating to inputs, activities or outputs. 4.3 Performance of the individual Call to account: Require (someone) to explain a mistake or poor performance. Chapter 4: Performance Management and Development; of the SMS Handbook 4 appropriately provides the link between outcomes based performance of the organisation and the performance of the individuals follows: Individual performance assessments should therefore, be informed by and, in turn, inform the evaluation and review of organisational and unit achievement over the preceding period. Reviews of achievement against departmental strategic objectives and business plans should coincide with individual quarterly performance reviews, to enable individual and organisational performance to be more effectively linked. At the core of all of the above lies the issue of accountability. The non-performance buck must stop at the level where a specific manager is accountable for the work performed by those individuals reporting to him or her. Non-performance cannot just be accepted without consequences. There is a clear obligation on every manager in government to take management action whenever and wherever poor performance is identified. More than that, the concept of accountability presented in the previous section, places a further obligation on those who are accountable to provide full reports on matters under their control. Reviews of programme performance should coincide with individual performance reviews. Reports must be scrutinised and evaluated and after critical reflection, management action must follow where unacceptable performance is encountered. The obligation of all managers in government to comply with the performance management approach is clear and unambiguous. This approach: Starts with planning based on strategy monitors and evaluates inputs and activities and the resultant outputs, outcomes and impacts reports on performance information and results in management action, either to sanction non- or poor performing individuals or to reward individuals performing better than expected. This process cannot only be performed once per annum through the formal appraisal process, but must be performed on a continuous day-to-day basis in interaction up and down the organisational chain of command based on the contents of the performance reports. 4.4 The performance management system for infrastructure management Effective program performance management requires a performance management system which links planning for program performance and resource management with performance monitoring and program evaluation. Program performance management links what is being done to what is being achieved. It focuses attention on the effectiveness and efficiency of achieving government policy objectives, meeting community needs, and satisfying statutory and ethical accountabilities. 5 This extract from The Guide for the Implementation of Provincial Quarterly Performance Reports introduces the concept of an integrated performance management system. The components of such a system can be 4 Chapter 4: Performance Management and Development; SMS Handbook, published 2006 by DPSA 5 The Guide for the Implementation of Provincial Quarterly Performance Reports, National Treasury Delivery Management Guidelines: Practice Guide 3: Performance Management 13

14 found in the performance management concepts presented in the preceding sections, which can be summarised as follows: Infrastructure management covers all aspects of the life cycle of infrastructure assets, from acquisition, through operation and maintenance to eventual disposal. The importance of infrastructures in the context of the South African Government today relates directly to the pivotal role and function that these assets perform in the service delivery value chain. Link Indicators and RACI to Individual Performance Agreements Develop Indicators from Strategic Plan Objectives 1 Develop Indicators from Programme Plans and Budgets 1 Develop Indicators from Project / Operational Plans and budgets 1 Deploy inputs Measure against plan Perform Activities Produce Outputs Monitor & Evaluate Impacts against plan Monitor & Evaluate Inputs, Activities and Outputs against plan Monitor & Evaluate Outcomes against plan 2 Publish Performance Information Take Management Action Numbers refer to Roadmap steps Review / Appraise Individual Performance Figure 5: The Performance Management System for infrastructure management Performance management definition Performance management for service delivery is therefore defined as an ongoing systematic approach to improving infrastructure asset management and infrastructure delivery results. This is achieved through a clear sequence of events based on critical reflection and managerial action in response to analysis of the relationships between agreement on the desired impacts flowing from the agreed strategic objectives; the planning of the necessary outcomes and specific inputs activities and outputs required to achieve those outcomes and associated impacts; the deployment of inputs and the generation of service delivery outputs through planned activities and the associated outcomes and impacts resulting from the outputs delivered. The performance of programmes, projects and operations are mapped to the performance of those individuals responsible for the performance of the work and accountable for the results achieved. The results are accounted for through publication of reports, recording actual performance against planned targets. Variances from planned performance are followed by management action after critical reflection in order to rectify, normalise and improve poor or unacceptable delivery performance. Delivery Management Guidelines: Practice Guide 3: Performance Management 14

15 Performance management in this toolkit covers all matters related to financial and non-financial performance of the acquisition, refurbishment, operation, maintenance and disposal of infrastructures. Performance refers to both the performance of the organisation as well as the performance of those individuals responsible and accountable for performing and managing the work required to achieve the infrastructure related objectives of the organisation. Performance management not only includes elements traditionally seen as being monitoring and evaluation, but also includes reporting and the subsequent management action. Performance management is not the responsibility of a single junior manager in the department s M&E section, but it is the responsibility of each and every manager starting with the Accounting Officer and spanning across the whole infrastructure delivery chain and life cycle. Infrastructure is a critical and fundamental input into the process of almost every aspect of service delivery. Education service delivery cannot happen without a network of school infrastructure, nor can health services be delivered without an infrastructure of clinics and hospitals, the economy cannot grow without transportation services, and so forth. However, almost more importantly, the already existing infrastructure assets must be operated and maintained so that they can perform as the service delivery input resources that they have been designed and built to be. These assets are thus components of our service delivery system, and if any system component fails the service delivery system of the country is stressed and could fail. A very recent reminder of how catastrophic such a failure can be is the chain of events all South Africans experienced during 2008 when the electricity service delivery system was stressed. It started with overworked power generating infrastructure failing, which event triggered a chain reaction that was exacerbated by inadequate maintenance of all components of the electrical grid. In the end cities were without power for weeks not because of load-shedding, but because poorly maintained switchgear could not handle the strain of the frequent shut-down and switch-on of power. 4.5 Integrating service delivery performance management The context of performance management for infrastructure asset performance management must therefore be understood from a broader service delivery perspective. It must clearly be understood that the consequences of a performance failure in infrastructure asset delivery will affect the whole service delivery system. Performance management for the delivery of infrastructures must therefore be integrated as shown in the Figure 6 below. This illustrates how several different facets are required to come together when a new facility, such as a school or a clinic is delivered. Not only is a physical structure required, but trained personnel, with administrative support and appropriate equipment and consumables is also required. Operations and maintenance budgets and resources are needed, the site must be serviced with basic utilities and links are required to integrate the facility into transportation and other social services such as child welfare, for example. A properly planned performance management system will ensure that a senior manager responsible for the delivery of the complete facility will have insight into the integrated performance reporting through an appropriate governance structure designed to ensure coordination so that all facets of the facility are completed and operational at the same time and that the various components are properly integrated and coordinated. Delivery Management Guidelines: Practice Guide 3: Performance Management 15

16 Un-served need Infrastructure requirement Site Acquisition Structure Design & Build Bulk & Reticulated Utilities Service delivery operational Staff Equipment, goods and services Transportation & Social Infrastructure Functional Facility Served Need Figure 6: Performance Management to integrate service delivery There is a danger that, if incorrectly implemented, performance management can lead to an increase in silo mentality. Therefore, in designing a new Performance Management measurement system, the organisation must establish several coordination or cooperative measures such as perhaps a teamwork index, to encourage and ensure that cross-functional harmony is achieved. Important diverse functional units and departments involved in the delivery of a facility could rate themselves on how well they interact with other units of the organisation and could in turn be rated by the other units. Delivery Management Guidelines: Practice Guide 3: Performance Management 16

17 5. Performance Management Roadmaps Controls Policy Strategy Inputs Plans Budgets Resource input; activities; outputs Performance Data Performance Management What do we want to achieve? How will we know when we have achieved it? What are we going to do to achieve it? Who of us are responsible for what? How do we improve performance? Outputs Accountability Improved Performance Performance Management Function Mechanisms Performance management system Figure 7: Performance Management Function The highest level performance management process At the highest level, as shown in Figure 7 above shows that performance management is about answering the following fundamental questions, namely: What do we want to achieve? This requires an unpacking of our strategy How will we know when we have achieved it? This requires the development of a system of indicators to measure the performance What are we going to do to achieve it? This requires indicators not only measuring deliverables, but also inputs and activities Who of us are responsible for what? This requires us to link responsibilities and accountability to individuals How do we improve performance? This requires management action after critical reflection. The purpose of this roadmap is to guide the user in the steps necessary to perform the functions necessary to implement a performance management system for infrastructure in support of service delivery. Expanding on the above, the high level roadmap emerges as shown in Figure 8 below. Delivery Management Guidelines: Practice Guide 3: Performance Management 17

18 Inputs Plans Budgets Controls Policy Strategy 1 - Develop Performance Indicators What do we want to achieve? How will we know when we have achieved it? What are we going to do to achieve it? Who of us are responsible for what? How do we improve performance? 3 - Publish Performance Information Outputs Accountability Inputs Resource input; activities; outputs Performance Data 2 - Monitor & Evaluate Progr, Proj and Ops Performance 4 - Review & Appraise Performance of Individuals Performance Management Roadmap 5 - Take Management Action Outputs Improved Performance Figure 8: Performance management roadmap This roadmap shows how in: Step 1: policy and strategy and plans and budgets are used to develop indicators complete with targets that can be used to measure performance Step 2: measures the actual input resources, activities performed and outputs achieved, as well as other performance data sources, as needed, and produces performance information. This step is performed wherever work is performed, be it at strategic management level or down at the coalface where the real work is performed Step 3: publishes the performance information in a variety of reports and formats as required by various stakeholders. The common factor amongst the reports is that they all report on variances, whether good or bad, between planned and actual performance. This fulfils one element of the concept of accountability, namely disclosure of results in a transparent manner. Step 4: brings the concepts of corporate or programme performance management together with the concepts of performance management and development of the individual. This is done by using the RASCI or responsibility assignment matrices to identify individuals responsible for work components and by making available reports on the performance of those work components to managers when appraising the performance of individuals. This step closes the loop on accountability by calling individuals to account and to justify their actions and decisions Step 5: managers complete the performance management process when they are provided with performance and decision support information showing the variance between planned and actual achieved, and they reflect on the underlying reasons and most importantly take appropriate managerial action to either reward or learn from good performance and sanction or address poor performance. Delivery Management Guidelines: Practice Guide 3: Performance Management 18

19 Each of the above steps is now presented in further detail below. The format is as follows: Each of the highest level performance management roadmap steps are expanded upon with their own roadmaps (Roadmap steps 1 to 5). These second level roadmap steps are again, in turn, broken down into level 3 steps as shown in the five separate roadmaps (e.g. for roadmap 1 there are six steps from step 1.1 to step 1.6.) Where necessary, these level 3 steps are expanded upon in level 4 steps described in the text below. Level 4 steps are not shown diagrammatically on roadmap diagrams. 5.1 Developing performance indicators 1. Agree on what you aim to achieve (Impacts and Outcomes) 2. Specify the Outputs, Activities and Inputs 3. Select Key Performance Indicators (KPIs) 4. Set realistic Performance Targets 5. Determine the process and format for Reporting performance Roadmap 1 - Develop Performance Indicators 6. Establish Processes and Mechanisms to facilitate corrective action Figure 9: Roadmap 1: Develop Performance Indicators Step 1.1: Agree on what you aim to achieve (Impacts and Outcomes) The purpose of this step is to ensure an understanding of a specific strategic objective; the associated problem and its solution in order that clear outcomes and impacts can be defined in measurable terms. Step 1.1: Understand the Strategic Objective under review Step 1.2: Understand the associated problem or issues relating to achieving the objectives. There can be multiple issues involved, especially at higher levels and care must be taken to apply appropriate tools and techniques such as root cause analysis and decision tree analysis as well as academic research on the subject at hand to identify the real underlying issues that need to be addressed. Delivery Management Guidelines: Practice Guide 3: Performance Management 19

20 Step 1.3: Understand the appropriate solutions for the identified issues Step 1.4: Define the long term Impact Indicators mapped to and aligned with existing higher level indicators, which can verify that the strategic objectives have had the desired impact. Examples of such high level impacts would for instance be infant mortality rates, or employment rates, or the movement per capita GDP etc. The key here is that these are long term indicators are proving that the policies and objectives are effective. Note: in the case of a provincial department these high level impact indicators will in most cases already have been defined at a national sector or a provincial PGDS level, and can merely be verified before being incorporated into the performance management system. Step 1.5: Define the Outcomes that will allow verification that the medium term results have been achieved for each programme and sub-programme element. This step brings strategy closer to home, because here the infrastructure manager operates at Portfolio and Programme level. Again, in the Department the manager will inherit certain prescribed higher level indicators 6. However it is crucial that appropriate programme level outcome indicators are selected. Examples are the rate of service backlog eradication or the percentage access to services, whether the infrastructure delivery rate is improving or accelerating etc. Note: that the development of indicators is a complex exercise and will require extensive technology and specialist support to keep track of the cascading sets of indicators relating to the objectives. Designing an Integrated performance management system, supported by appropriate governance coordination structures and performance indicators that measures teamwork and cooperation can ensure increased integration of service delivery with enhanced cooperation across silos Step 2: Specify the Outputs, Activities and Inputs The purpose of this step is to specify WHAT the institution needs to do to achieve the desired outcomes and impacts. Step 2.1: Determine which parties (stakeholders) will be negatively or positively impacted. (Information obtained from a Stakeholder Analysis) This exercise is essential in order to map benefits (results achieved) to various stakeholders as well as to ensure in a later step, that all stakeholders are provided with appropriate reports. This step also covers developmental elements such as job creation, poverty reduction, EPWP indicators, gender and youth empowerment indicators and the like. Step 2.2: What does the institution need to deliver in the short term to achieve the desired impacts and outcomes - These are the OUTPUTS Step 2.3: What does the institution need to do in order to produce these Outputs - These are the ACTIVITIES Step 2.4: What resources (financial, human, technology) are required by the institution to perform these activities - These are the INPUTS. This exercise is as much a bottom up as a top down exercise. The important factor here is to ensure completeness. The information will in the majority of cases be found in the appropriate programme and project implementation and execution plans. Defining a good performance indicator requires careful analysis of what is to be measured. One needs to have a thorough understanding of the nature of the input or output, the activities, the desired outcomes and 6 Note The presidency is currently developing such a high level set of indicators. Delivery Management Guidelines: Practice Guide 3: Performance Management 20

21 impacts, and all relevant definitions and standards used in the field. For this reason it is important to involve subject experts and line managers in the process. When assessing government performance, one must consider not only the service delivery dimensions (such as quality, access, equity, timeliness) but also the financial dimensions of performance (such as effectiveness, efficiency and value for money) Step 3: Select Key Performance Indicators (KPI s) The purpose of this step is to, from the complete set of indicators defined in step 2, select a key set of indicators that will be (and can be) measured. Step 3.1: Select a potential Key Performance Indicator (KPI) and test it for its ability to communicate whether the institution is achieving its strategic objectives Step 3.2: if the candidate KPI passes step 3.1, test it for availability of data to measure the KPI, robustness of the data (will it always be readily available), and verifiability of the data. Data must also have the ability to be "rolled-up" Step 3.3: Repeat steps 3.1 to 3.2 until a Key set of indicators have been selected. Step 3.4: Lower level managers will require a larger number of KPIs than higher level managers. During this step, the hierarchy of indicators are planned including how lower level KPIs will be rolled up from project / operational level to Programme level to the top level portfolio / Strategic Dashboard / balanced scorecard. A litmus test here is to ensure that all higher level indicators are required in statuary reports (IRM etc are provided as a minimum) Step 4: Set realistic Performance Targets A realistic performance target must be set for each Key Performance Indicator. Unrealistically high targets will not be achieved and will demoralise people. Unrealistically low targets will not stretch the organisation to continuously improve and will lead to poor and underperforming individuals being fraudulently rewarded for under-performing. The targets must be set, taking into account what can be achieved innovatively but realistically by extracting the maximum efficiency and effectiveness of available resources. Business Unit / Programme targets must be aligned with targets contained in line / project / programme manager's individual Performance Agreements. Step 4.1: Analyse and understand current base-lines (previous performance achievements) and where base-lines are appropriate given available resources, adjust these to reflect budget and agreed efficiency induced growth factors Step 4.2: Where the analysis in Step 4.1 indicates that current baselines are reflective of severe under-performance, re-base lining is done to eliminate behaviour that leads to underperformance going forward Step 4.3: Verify that the aggregate of lower level targets realistically rolls up to higher level targets. If not, management intervention is required to either adjust higher level targets downwards, or increase inputs available to increase production, or if in management s opinion adequate resources are available, adjust lower level targets upward Step 4.4: Scrutinise plans and budgets and performance indicators and targets to ensure that the Performance Management System is integrated within and across business units, Departments and the Province. Any discrepancies are identified and addressed in relevant coordination forums Step 5: Determine the process and format for Reporting performance 7 For more information on this topic, please see the Framework for Managing Programme Performance Information; May 2007, National Treasury Delivery Management Guidelines: Practice Guide 3: Performance Management 21

22 The purpose of this step is to design and implement a comprehensive reporting system that is fully aligned with the: External KPI s and the Higher level reporting requirements Internal KPI's. Step 5.1: From the stakeholder analysis and other statutory requirements determine and map who the parties requiring reports are, also determine what if any content, frequency and format requirements exist. This is documented in a Stakeholder Reporting Analysis Document. Step 5.2: Develop and publish a Reporting Strategy for the Department. This strategy must be aligned with the Provincial and Sector and National Reporting Strategy, e.g. when specific systems are used to report on specific programmes. The Reporting strategy will define reporting mechanisms and processes, what technologies will be used by whom and how interface issues between systems will be handled. Step 5.3: Adjust existing reporting templates for each regular reporting recipient stakeholder and agree the format in accordance with the Reporting Strategy Step 5.4: implement and manage the reporting processes to ensure that all reports contain the agreed contents in agreed formats and reach its intended recipients regularly at the agreed frequencies. This process is managed using a Reporting Management Control Document Step 6: Establish Processes and Mechanisms to facilitate corrective action The objective of this step is to establish the Monitoring and Evaluation (M&E) functions in support to management at all levels to facilitate management in its obligation to take corrective actions. These actions cover the full life cycle of the delivery value chain, namely from impacts, outcomes, outputs and activities, right down to variances in respect of financial, human and technology resource inputs. Step 6.1: Engage with the Stakeholder Reporting Analysis in step 5.1 to ensure that management's reporting requirements in respect of the Performance Management function is adequately addressed in the standard reports. If not, specific performance reports for management must be included. Note this step is performed at each level of the Department across every Department and is the responsibility of each line / project / programme / functional / portfolio / executive manager Step 6.2: Design and document the M&E process for the Department. This process must be tightly aligned with the requirements of the Individual Performance Management cycles to ensure that all prescribed individual performance steps can be supported. These processes however do not focus only on the individual, but also on the performance of units such as projects, operational work units, programmes and sections in the department and even the whole department as a unit. The output is a documented M&E Process Step 6.3: Establish the various forums / meetings where the M&E process can interact with the delivery units as well as management Step 6.4: Perform the M&E function by critically reflecting on the contents of the report, identifying poor performance, analysing underlying causes for under performance, and developing solutions and proposed actions in support of the management functions Step 6.5: after obtaining management decisions on the corrective action to be applied to the situation, follow up and ensure that such actions have been taken and monitor whether these actions are producing the desired correction in the indicators. This process is managed through a Management Decision Log Step 6.6: If, despite regular prompting, no decision is forthcoming, the agreed escalation process is implemented to bring the matter under the attention of more senior management. A performance management system works only if there is a mechanism to hold the responsible person accountable. The unintended consequences of choosing some measure that promotes inappropriate behaviour or malicious compliance can undermine the proposed reform. These need to be rooted out if they exist. Delivery Management Guidelines: Practice Guide 3: Performance Management 22

23 5.1.7 Points to consider The Improving Government Performance: our Approach; 2009 published by The Presidency describes a delivery strategy which contains important points to consider when defining the KPIs: What is the sector s service delivery chain (who does what to ensure delivery)? Who are all the relevant role players in the service delivery chain (inside and outside government)? Who is accountable at the top and all along the delivery chain? What critical activities and outputs are required to achieve the sector outcomes? What are the agreed norms and standards for this sector in the delivery of services? How will budgets be prioritized to align with the service delivery agreement or savings effected in other areas which could be utilised here? What are the timelines? How will M&E information on activities, outputs and outcomes be reported and analysed? Will it be early enough to permit corrective action? How will it be known that change is happening? How much capacity does the sector Ministry have to deliver? Do they require any help? In case of disagreements or disputes, how will these be resolved? A list of all the likely blockages and the plan to solve them. What is the role of each stakeholder in the sector, and how will they be held accountable? Evidence-based decision making is the systematic application of the best available evidence to the evaluation of options and to decision making in management and policy settings. Evidence can come from any of the three data terrains outlined in the GWM&E system: programme performance information, evaluation and census data/ statistics as well as from research studies and local community information. 5.2 Monitor and evaluate programme, project and operational performance Delivery Management Guidelines: Practice Guide 3: Performance Management 23

24 1. Collect work performance data and produce performance measurements 2. Collect budget forecasts Monitoring involves collecting, analysing, and reporting data on inputs, activities, outputs, outcomes and impacts as well as external factors, in a way that supports effective management. Evaluation is a time-bound and periodic exercise that seeks to provide credible and useful information to answer specific questions to guide decision making by staff, managers and policy makers. 3. Evaluate performance of projects and programmes 4. Analyse and synthesize data into information Roadmap 2: Monitor & Evaluate Programme, Project and Operational Performance 5. Make performance information available to reporting systems and performance functions Figure 10: Roadmap 2: Monitor and Evaluate performance Step Collect Work Performance Data The purpose of this step is to collect all of the necessary work performance data and work performance information so that the performance measures can be produced. Step 1.1: Collect information from activities such as: o Input Status resource availability, which resources are not available, which resources are available, which resources have completed their work o Output status percentage deliverables complete, actual numbers delivered, which deliverables have not started, which have started, which deliverables are completed o Schedule progress progress tracking on key tasks o Cost and Expenditure reports actual expenditure in various categories committed, certified, paid - cash flow estimates, actual costs of work performed Step 1.2: Collect Key Performance Indicator measurements Step 1.3: Collect additional local management measurements as required: o Planned versus actual schedule performance o Planned versus actual cost performance o Planned versus actual technical performance Scope Quality Safety Step 1.4: Verify for accuracy, completeness and reality checks. Delivery Management Guidelines: Practice Guide 3: Performance Management 24

25 5.2.2 Step 2.2 -Collect Budget Forecasts The purpose of this step is to collect the entire relevant budget forecasting information to allow estimates of the final outturn costs and the budget over or under expenditure can be determined. Step 2.1: Budget forecasts provides information on: o the additional funds that are expected to be required for the remaining work o Status of the contingency management o Estimates of final outturn costs (cost at completion) Step 1.2: Verify for accuracy, completeness, reality checks Step Evaluate performance Evaluation is a time-bound and periodic exercise that seeks to provide credible and useful information to answer specific questions in order to guide decision making by staff, managers and policy makers. Evaluation is performed through informal (internal) reviews or formal audits of the project or function being evaluated. Step 3.1: Evaluate performance through reviews at regular (quarterly / annual) intervals or at project completion. Step 3.2: Evaluate Programmes o Impact or goals -based evaluation: Determine whether the programme has achieved its predetermined objectives o Governance review determine to what extent the programme and its projects is complying with prescribed risk and control processes o Outcomes or benefits evaluation review to what extent the delivery of programme benefits have been achieved Step 3.3: Evaluate Projects o Governance review determine to what extent the project is complying with prescribed risk and control processes o Cost Review determine to what extent the project is meeting the cost versus budget objectives o Schedule review determine to what extent the project is meeting the schedule objectives o Safety review determine to what extent the project is meeting the safety objectives o Quality review determine to what extent the project is meeting the quality objectives Step 3.4: Evaluate Operational functions o Governance review determine to what extent the operations and maintenance functions are performed in compliance with prescribed risk and control processes o Maintenance review determine to what extent prescribed maintenance procedures are being performed on key components o Cost and budget review determine to what extent the operations functions meet the cost and budget objectives o Safety review determine to what extent the operations functions meet the safety objectives o Quality review determine to what extent the operations functions meet the cost and quality objectives o o Condition assessment of facilities perform condition assessment at agreed intervals Functional assessment of facilities and major equipment perform functional assessments at agreed intervals Step Analyse and synthesize data into information The purpose of this step is to integrate the performance related information collected and produced in the monitor and evaluate function into data tables, various performance graphs, and calculate the performance indices. Delivery Management Guidelines: Practice Guide 3: Performance Management 25

26 Step 4.1: Prepare data in Key Performance Indicator formats Step 4.2: Analyse additional local management measurements o Past performance and trends o Variance Analysis such as Earned Value analysis. Step 4.3: Synthesize all performance data into data repositories, such as databases or business intelligence systems Step 4.4: Produce pivot reports and graphical analysis Step 4.5: Verify for accuracy, completeness, reality checks Data rich/information poor (DRIP). Many of the current performance measures are buried in the numerous management and operational reports making it difficult for the recipients to understand and use the measures. To avoid the DRIP syndrome, the performance measurement reports should focus on the few relevant measures for the intended recipients stating the specific measurement goals and using appropriate presentation tools such as charts and storylines as appropriate Step Make performance information available to corporate systems and functions The purpose of this step is to ensure data and information compatibility across functional and departmental interfaces. Step 5.1: Establish a KPI Dictionary to control KPI definitions Step 5.2: Ensure data conforms to Government s Minimum inter-operability Standards (MIOS) to ensure that performance management information systems (including spreadsheets) can interface with each other. Delivery Management Guidelines: Practice Guide 3: Performance Management 26

27 5.3 Publish performance information 1. Develop a reporting register 2. Develop report templates 3. Produce, publish and distribute reports 5.Confirm receipt and obtain feedback Roadmap 3 - Publish Performance Information Figure 11: Roadmap 3: Publish Performance Information Step Develop a reporting register The purpose of this step is to collect reporting requirements to manage the production and publication of reports. Step 1.1: Extract reporting requirements from stakeholder management plan and legislated requirements Step 1.2: Record report related information o Stakeholder details o Report details o Template requirements o Publishing dates o Media requirements o Delivery requirements Step 1.3: Update Report Register monthly with changes Step 1.4: Record all requests for ad hoc reports on Register. Check whether existing format will suffice. If repeated requests, formalise the report Step Develop report templates The purpose of this step is to develop reporting templates to ensure consistent reporting across the department as well as alignment with external reporting requirements. Delivery Management Guidelines: Practice Guide 3: Performance Management 27

28 Step 2.1: Obtain current prescribed template Step 2.2: Analyse template and determine any gaps Step 2.3: Determine whether any new data fields are required and if so modify appropriate monitoring processes Step 2.4: Modify template if necessary to include local performance data (without affecting required data) Step 2.5: Record any changes in the Report Register Step 2.6: Make configuration changes to reporting system to produce reports Step Produce, publish and distribute reports The purpose of this step is to take the performance information produced in Roadmap 2, populate and publish the various reporting formats required by various stakeholders. Step 3.1: Confirm reports required from Register Step 3.2: Produce report from system (corporate system or local system of databases (preferable) or spreadsheets (not recommended)) Step 3.3: If ad hoc request build new report Step 3.4: Update tracking function on register when complete Step 3.5: Confirm Template requirements, publishing dates, media requirements and delivery requirements from register Step 3.6: Publish and distribute reports Step Confirm receipt and obtain feedback The purpose of this step is to communicate with the report recipients to confirm receipt and obtain any feedback. Step 4.1: Confirm receipt in writing and record on report register Step 4.2: Record any feedback received in writing Step 4.3: Communicate feedback received to appropriate projects or functional units. Performance information is essential to focus the attention of the public and oversight bodies on whether public institutions are delivering value for money, by comparing their performance against their budgets and service delivery plans, and to alert managers to areas where corrective action is required. Delivery Management Guidelines: Practice Guide 3: Performance Management 28

29 5.4 Review and appraise performance of individuals 1. Develop and maintain Master Responsibility Assignment Matrix 2. Provide Responsibility assignment information to HR 3. Provide Performance Information to HR function 4. Provide Management with performance management information Roadmap 4 - Review & Appraise Performance of Individuals Figure 12: Roadmap 4: Review and appraise performance of individuals Step Develop and maintain Master Responsibility Assignment Matrix and provide performance information to HR function The purpose of this step is to provide the Human Resources (HR) function with information on which individuals are responsible and accountable for which programmes and projects so that the benefits, goals and objectives (in the form of impact, outcome, output, activity and input indicators) of the programmes and projects can be linked (mapped) to the individual's - performance agreement. NOTE: The need for this step to be placed with a centralised function, such as HR, is because Departments are matrixed organisations with individuals simultaneously performing different roles on projects and functional assignments. Step 1.1: Obtain Responsibility Assignment Matrix (RASCI or other format) information from programmes, projects and asset management operations and maintenance functional units Step 1.2: Integrate into a master Responsibility Assignment Matrix (RASCI or other format) to map individuals to programmes, projects and asset management operations and maintenance functional responsibilities Step 1.3: Coordinate with Individual Performance Management and Development (PM&D) cycle and provide information in respect of individual s Responsibilities, Accountability, and Authority to the appropriate HR function for inclusion in Individual s formal Performance Agreement as an addendum Step 1.4: Track and maintain changes. Delivery Management Guidelines: Practice Guide 3: Performance Management 29

30 5.4.2 Step Provide Individual Performance Information to HR function The purpose of this step is to provide programme, project and operational functional performance inputs into the formal Departmental Performance appraisal cycle of individuals as prescribed by the DPSA Step 2.1: Provide HR function with information on project and programme reporting lines Step 2.2: Provide the appropriate HR function with performance Information related to programmes, projects and asset management operations and maintenance activities as input into the individual performance appraisal process Step Provide Management with performance management information The purpose of this step is to provide information on performance variance from baselines (time, scope, cost, quality etc.) to managers to empower them to take the necessary corrective, preventative or defect repair actions as appropriate. Step 3.1: On an ongoing basis, provide the appropriate top, senior and functional managers responsible for Capital Programmes and Projects as well as Infrastructure management operations with appropriate decision support information to enable management to take appropriate managerial action. 5.5 Take management action 1. Obtain and study performance related information and critically reflect on root causes of good and bad performance 2. Extract and disseminate learning from good performance to improve performance Roadmap 5 - Take Management Action 3. Take appropriate action to address causes of poor performance Figure 13: Roadmap 5: Take management action Delivery Management Guidelines: Practice Guide 3: Performance Management 30

31 5.5.1 Step Obtain and study performance related information and critically reflect on root causes of good and bad performance This step describes a key obligation of managers, namely to reflect on the real underlying causes of good or bad performance in order to learn from the one and improve the other. A key consideration is developing understanding of whether the real root causes are people, processes, systems or external by nature. Step 1.1: Examine, study and scrutinise information provided and request more information, further clarification or different analysis where necessary. Step 1.2: Critically reflect on the real underlying or root causes for poor performance. o What is good and should stay or be improved o What is bad and should stop or be changed o What is missing Step 1.3: Categorise the issues and consider whether the problem lies with the: o Individuals o Processes o Structure o Systems o Policy / Strategy. As an example of critical reflection, if the root causes of poor performance of first year students at universities are not properly understood, management action might be focused at improving and increasing bridging classes at universities rather than focusing the necessary management action where the literacy and numeracy foundation of learners are being established, namely basic education during the early years of education Step Extract and disseminate learning from good performance to improve performance in other areas The purpose of this step is to extract learning from good performance in order to ensure consistent repetition thereof. Step 2.1: Extract and disseminate learning from good performance to improve performance in other areas Step Take appropriate action to address causes of poor performance The purpose of this step is to take appropriate action after having determined what the real causes for poor performance are. Such action could be aimed at individuals or at changing processes, procedures, systems or organisation of work. Three types of actions are identified and discussed. Step 3.1: After reflection, Managers will select one or more of the following actions. (Note these directives are addressed to the individuals accountable and responsible for the performance of the work). 1. Corrective Actions Documented directive for executing work to bring the expected future performance in line with the relevant programme, project or operational plan. 2. Preventative action Documented directive to perform an activity that can reduce the probability of negative consequences associated with programme, project or operational risks. 3. Defect Repair action Formally documented identification of a defect in a programme or project work component and a formal recommendation or directive (change order) to either repair (perform re-work) or replace the relevant work component. This might include early termination of contracts for example. Delivery Management Guidelines: Practice Guide 3: Performance Management 31

32 6. Putting it all together how performance management works 6.1 The Performance Management System Link Indicators and RACI to Individual Performance Agreements Develop Indicators from Strategic Plan Objectives Develop Indicators from Programme Plans and Budgets Develop Indicators from Project / Operational Plans and budgets Plan Plan Numbers refer to Roadmap steps Deploy inputs Review / Appraise Individual Performance Monitor & Evaluate Impacts against plan Monitor & Evaluate Inputs, Activities and Outputs against plan 1 2 Do Measure against plan Perform Activities Produce Outputs Measure 2 Monitor & Evaluate Outcomes against plan Measure 2 3 Publish Performance Information Take Management Action Act 4 5 Figure 14: The Performance Management System for infrastructure management in the Toolkit context The Performance Management System for infrastructure management is not a technology system, but as in all systems, it is comprised of components that are linked and dependant on each other. The system has a boundary and certain factors that can influence the performance of the system as a whole or any its components. If any of the system components fail, other components are affected and the whole system is under stress and could collapse. A Performance Management system should align with an organisation's performance measures, its strategy and its critical success factors to focus on the important organisational functions and to direct attention to key matters of management concern. A Performance Management System should be a communications tool that helps all members of the organisation understand that their actions are important and that their initiatives should be guided by corporate strategy. Measurement feedback should indicate whether these strategies are being achieved. Thus, performance measures may be considered as a way to clarify, simplify and focus senior management vision and should channel actions that will implement strategies or rectify deviations from agreed strategy. Delivery Management Guidelines: Practice Guide 3: Performance Management 32

33 The diagram in Figure 14 above shows how monitoring and evaluation is done in order to measure and compare actual delivery against planned delivery and strategy. This happens simultaneously and continuously across all levels of the institution. The results of the monitoring and evaluation processes are published in a variety of formats and used by managers to take the necessary corrective action to address variations from the agreed performance standards. The results of the performance management processes are fed back into the strategy development and planning processes in order that the organisation can learn and improve. For individuals the process culminates annually with the annual performance reviews where good performance is rewarded and poor performance is sanctioned. The diagram in Figure 14 also indicates the mapping of the performance management system to the other guides from a system perspective, whereas the mapping to other toolkit guides in Figure 3 was from a process perspective A practical example Structures and RASCIs Capital Programme New Build Programme Refurbishment Programme Project 104 Project 201 Project 105 Project 202 Project 107 Figure 15: Programme structure Senior Manager Physical Infrastructure Mr T Mphuthi Senior Arcitect S Jacobs Senior Project Manager A Nkomo A Biko B Dlamini D Swart C Clark M Ngobeni Delivery Management Guidelines: Practice Guide 3: Performance Management 33

34 Figure 16: Organisational structure A Department has a capital programme with two sub-programmes and several projects as shown above in Figure 15, with an organisational structure as shown above in Figure 16 The problem Figure 16 is immediately obvious, which is that it is not possible to identify which person in the department is responsible for which project or programme. It is only after studying the RASCI table that conclusions can be drawn from the Programme structure shown in Figure 17 and Figure 18. Figure 17: The RASCI table for the Capital Programme Delivery Management Guidelines: Practice Guide 3: Performance Management 34

35 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Performance Management Capital Pogramme Manager Mr T Mphuthi New Build Programme Manager S Jacobs Refurbishment Programme Manager A Nkomo Project 104 A Biko Project 105 B Dlamini Project 107 C Clark Project 201 D Swart Project 202 M Ngobeni Figure 18: Capital Programme Team Structure This example also demonstrates the complexities that arise when operating in a Matrix Management structure as one often does with projects. C Clark normally reports to her functional manager A Nkomo, however for the duration of the project, C Clark reports to S Jacobs for all matters relating to Project 107, whilst she still also reports to A Nkomo and her performance appraisals are being done by A Nkomo. It is highly unlikely that A Nkomo would have information on project 107, because she only receives reports on refurbishment projects. Step Provide Responsibility assignment information to HR and step Provide Performance Information to HR function will in future address these Planning Examining the implementation plan for Project 107 below, shows that there is one indicator, namely number of classrooms completed, where the target for the project is 50 Classrooms per month (except for July and August perhaps because these are heavy rainfall months). Targets Project Project 107 Indicator Class Rooms Figure 19: Project delivery targets Project Reporting tables and graphs Best practice in reporting requires one to report progress showing actual as well as targets and variances. A project progress report could therefore appear as shown below. Note how Red Amber Green icons are used to draw ones attention to areas of poor performance. 8 8 These icons were produced using a standard conditional formatting function of Microsoft Excel 2007 onwards. Delivery Management Guidelines: Practice Guide 3: Performance Management 35

36 Numbers of Classrooms Completed Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Numbers of Classrooms Completed Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 YTD Total Performance Management Project 107 Progress Report Targ Class Rooms Act Variance Figure 20: Project reporting template It is not always easy to recognise trends when looking at data in table format and it is here that the graphing functions of spreadsheets are of great help. Project 107 Performance Project 107 Performance Target Actual Target Actual 0 0 Figure 21: Two Performance graphs The chart on the left is a Bar chart and the one on the right is a line graph of exactly the same data. Note: how for this particular application, the bar chart allows for easier interpretation. It is always important to select the appropriate type of graph to support analysis. Project 107 Performance Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Figure 22: Project 107 pie chart A Pie chart of this same data set for example produces a pretty picture but conveys no useful information what so ever. Analysis of the above Bar chart shows a fall off in performance starting in September and worsening in October and as a manager one would want to interview Ms Clark to understand what the reasons are and how the trend can be reversed. Delivery Management Guidelines: Practice Guide 3: Performance Management 36

37 Act Refurb Programme Project 202 Schools Targ Project 201 Schools Act Targ Project 107 Act Class Rooms New Build Programme Targ Project 105 Act Class Rooms Targ Project 104 Act Class Rooms Targ Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 YTD Totals Target Actual Variance % Target Actual Variance % Derived Indicator Performance Management Programme level reporting and Performance Information Project Outputs Performance Information Status date = Oct 2010 FY 2010/2011 Project Performance (to status date) Sub- Programme Performance (to status date) Capital Programme performance % % % % -19% % % % Figure 23: Programme level report If the information on Project 107 is now incorporated into a Programme level report shown above, and some basic variance analysis turns the output data on the left hand side table into performance information. At a glance it is clear that the new build programme is in trouble, the refurbishment programme is OK but the poor performance of the new build programme is also raising an amber flag over the whole capital programme. Delivery Management Guidelines: Practice Guide 3: Performance Management 37

38 In summary Figure 24: The complete example Putting all of the above lessons from this example together as shown in Figure 24 provides us with an illustration of an integrated performance management system. The example shows how: The RASCI links the Programme structure to the Functional structure to provide the ability to easily identify individuals responsible or accountable for delivery performance The project view and its detailed variance analysis allow us to pinpoint the start of a problem at the end of August which will enable management to drill down and address the issue The Programme view allows us to compare the performance of various projects with each other, asses and compare performance on sub-programmes and even allows us to assess the performance of the whole capital programme Using graphs and other visual tools such as conditional icon sets, allows one to easily visualise the results Care must be taken, though, to use appropriate visual tools that accurately display the situation. Delivery Management Guidelines: Practice Guide 3: Performance Management 38