The City S Employee Performance Management Policy and Procedure

THE CITY’S PERFORMANCE MANAGEMENT POLICY

July 2007

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City of Johannesburg

Revised Performance Management Policy and Procedure

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TABLE OF CONTENTS

TABLE OF CONTENTS

SECTION 1: PREAMBLE

THE CITY’S PERFORMANCE MANAGEMENT PRINCIPLES

PERFORMANCE MANAGEMENT ACROSS THE CITY

PERFORMANCE MANAGEMENT OBJECTIVES

THE PERFORMANCE MANAGEMENT CYCLE

SECTION 2: SECTION 57 EMPLOYEES & EMPLOYEES ON FIXED TERM CONTRACTS

THE PERFORMANCE SCORECARD

DEFINITIONS

THE CITY MANAGER’S SCORECARD

SCORECARD INTEGRATION

PLANNING : SCORECARD DEVELOPMENT

Assigning Weightings and Measuring Performance

Targets and Baselines

Evidence and Means of Verification

MONITORING AND REPORTING OF PROGRESS

REVIEWING PERFORMANCE

An Overview of the Review Process

Who Rates Whom?

Amending the Individual Performance Scorecard at the Mid-Year Review

Planning the Final Performance Review

Holding the Final Performance Review

Assigning Scores to KPAs and SPOs

Documenting Discussions at the Formal Performance Review

SCORING PERFORMANCE

THE MODERATION PROCESS

REWARDING PERFORMANCE

Annual Salary Increase – Section 57 Employees and Employees on Fixed Term Contracts

Annual Performance Bonus – Section 57 Employees

Annual Performance Bonus – Employees on Fixed Term Contracts......

THE PERFORMANCE MANAGEMENT AND REMUNERATION COMMITTEE (Applicable to Section 57 employees only)

APPEALS PROCEDURE

SECTION 3:PERMANENT EMPLOYEES

THE SCORECARD

DEFINITIONS

SCORECARD GUIDELINES

THE MODERATION PROCESS

REWARDING PERFORMANCE

APPEALS PROCEDURE

SECTION 4: GENERAL

APPOINTMENTS DURING THE YEAR

TRANSFERS AND PROMOTIONS

PERFORMANCE MANAGEMENT TRAINING

COMMUNICATION

EMPLOYEE HANDBOOK

ROLES AND RESPONSIBILITIES

The Role of Various Departments

The Role of the Manager

The Role of the Employee

PERFORMANCE MANAGEMENT AND TRAINING & DEVELOPMENT

Why Individual Learning Plans?

Guidelines for Employee Development

PERFORMANCE MANAGEMENT AND EMPLOYMENT EQUITY

MANAGING POOR PERFORMANCE

ANNEXURE 1: EXAMPLE OF A PARTIALLY COMPLETED SCORECARD FOR FIXED TERM CONTRACT EMPLOYEES

ANNEXURE 2: EXAMPLE OF A COMPLETED SCORECARD FOR PERMANENT EMPLOYEES – ROUTINE JOB

ANNEXURE 3: ACCOUNTABILITY MATRIX

SECTION 1:INTRODUCTION

OVERVIEW

Performance management is regarded as a critical communication process that helps managers provide a motivating climate to assist employees in developing and achieving high standards of performance. The Municipal Systems Act 32 of 2000 requires that the City of Johannesburg establish a performance management system that is commensurate with its resources, best suited to its circumstances and in line with the priorities, objectives, indicators and targets contained in its integrated development plan. It is required to promote a culture of performance management among its political structures, political office bearers and councillors and its administration.

The core components of this performance management system are as follows:

Setting of appropriate key performance indicators;

Setting of measurable performance targets;

Monitoring performance;

Measuring and reviewing performance at least once a year;

Taking steps to improve performance;

Establishing a process of regular reporting.

In its drive to attain its vision of becoming a world-class city by the year 2030, the City of Johannesburg (CoJ) has implemented a range of systems and processes targeting improved performance and enhanced service delivery for its citizens. One such system is the City’s performance management system, originally designed in June 2001. This system aimed to meet the legislative requirements as laid down by relevant legislation at the time, such as the Municipal Systems Act, 32 of 2000 and the Municipal Structures Act, 117 of 1998 and the Municipal Structures Amendment Act, 2000.

Since the initial drafting and implementation of the system, a number of changes have taken place in terms of legislation and performance management practice within the City. The interim period has seen the introduction of new legislation and regulations such as the Municipal Finance Management Act, 56 of 2003, the Municipal Systems Amendment Act, 44 of 2003, and the Local Government: Municipal Performance Management and Planning Regulations, 22605 of 2001. The City needs to make changes to the system in order to ensure both legislative compliance and implementation of best practice.

The City has the luxury of having implemented performance management –particularly at the individual level – for a number of years. It is now presented with the ideal opportunity to take this implementation to the next level, in order to achieve its key objectives of:

Legislative compliance;

Implementation of best practice; and

Establishment of a mechanism through which the performance of the City at all levels can be optimised, employees motivated, developed and rewarded, and the goals of the organisation achieved.

This policy is concerned with the way in which individual employee performance is managed across the City of Johannesburg

PRINCIPLES DRIVING PERFORMANCE MANAGEMENT

The City’s performance management system and the way it is to be implemented is underpinned by a set of key performance management principles. The principles are the heart and soul of the City. These principles drive the design and implementation of the performance management system itself.

THE CITY’S PERFORMANCE MANAGEMENT PRINCIPLES

• All employees are responsible for achieving service delivery excellence through constantly improving on areas of individual performance and collective effort.
• Performance management is about actively communicating expectations, motivating success through constructive feedback, focusing on coaching and development, and ensuring delivery. The performance management system is not only a scoring mechanism!
• Those who perform will be fairly recognised and rewarded.
• There will be consequences for those who do not perform.
• Performance management is a process for which all are responsible.

PERFORMANCE MANAGEMENT ACROSS THE CITY

Performance management in the City is a multilevel process that starts with an overall strategy and cascades to organisational, departmental and employee performance management planning, monitoring and review.

There are a number of benefits to this multilevel approach:

It is performance at an individual, departmental, organisational and citywide level that collectively contributes to the City’s success in ensuring delivery to its citizens.

This integrated approach ensures performance priorities for the City as a whole are cascaded through the entire organisation, such that each employee understands their unique and important contribution to the City meeting its strategic objectives.

T he design of the system, whereby the key performance areas and indicators of performance contained in the Citywide scorecard are cascaded into the organisational scorecard (i.e. municipal entity and departmental scorecards) and then into individual scorecards, ensures that the appropriate alignment between individual performance and organisational performance is secured.

Performance management forms part of a strategic management approach within the City, aimed at ensuring that the organisation is strategy-led and that key systems such as business planning, budgeting and performance management are integrated. This approach enables the City to plan and budget better, monitor and measure performance more effectively and report on achievements in a transparent and convincing manner.

The three-tired approach to performance management, and its alignment with the planning and

IDP process, is outlined in the diagram below:

Performance management can therefore be defined further at the Citywide, organisational and individual level, where:

Citywide performance management is the process of strategic planning through which performance objectives for the City of Johannesburg Group are identified, based on input from the Integrated Development Plan, Mayoral Priorities and the Growth and Development Strategy, and then monitored and measured via the City Scorecard.

Organisational performance management is the process through which performance objectives for the City, as defined in the City scorecard, are translated into the business plans for the various departments and municipal entities. Departmental performance is monitored at the level of business plan and Executive Director scorecard although the Executive Director scorecard does not necessarily contain every aspect of the Departmental Business Plan. Aspects from the business plan not included in the Executive Director scorecard must be included in the various Director scorecards from within that Department. The performance of municipal entities is monitored through business plans and service delivery agreements.

Employee performance management is the process through which the objectives as defined in scorecards at the level of Department within the City are cascaded into individual scorecards, allowing for planning, monitoring, reviewing and rewarding of performance, and the enhancement of development, at the level of the individual employee. The monitoring of the performance of employees within the Municipal Entities occurs within the Municipal Entity and falls outside of the scope of this policy.

PERFORMANCE MANAGEMENT OBJECTIVES

The Citywide performance management system aims to:

• Ensure that the City Scorecard is aligned to the IDP, and therefore, to political priorities;
• Develop a business planning process that reflects tangible programmes, activities and targets to achieve the priorities;
• Ensure effective linkage between planning and budgeting;
• Ensure that business plans form the basis of an effective organisational and employee performance management system;
• Develop a monitoring and evaluation system that guarantees performance management and reporting against performance;
• Instil a performance-oriented culture across the City.

The organisational performance management system aims to:

• Improve Citywide performance by improving performance at a departmental and municipal entity level;
• Ensure alignment between the Citywide performance management system – and the City Manager’s scorecard – and the activities and targets for which the departments and municipal entities are held accountable;
• Ensure constant monitoring and evaluation at this level;
• Enable the City to assess the extent of delivery at strategic points, and to plan for interventions where necessary; and
• Instil a performance-oriented culture within each organization and department.

The employee performance management system aims to:

• Improve the organisational performance by improving individual performance;
• Clarify expectations of what individuals are required to achieve;
• Develop the skills and competencies of individuals within the organisation;
• Foster a sound working relationship between managers and employees through the development of agreed objectives, the provision of feedback, counselling and coaching;
• Provide a tool for managers to manage the performance of their staff;
• Allow employees to become more actively involved in managing their own performance;
• Reward those employees whose performance exceeds the output criteria;
• Instil a performance-oriented culture throughout the organisation, at the level of employees.

THE PERFORMANCE MANAGEMENT CYCLE

The employee performance management process within the City of Johannesburg involves four key phases as follows:

Planning: This is about jointly identifying individual performance expectations and gaining the employee’s commitment to achieving these expectations.

Coaching: This is a crucial phase of continuously tracking and improving performance, through feedback and reinforcement of key results and competencies.

Reviewing: This phase involves jointly assessing actual performance against expectations at the end of the performance cycle to review and document planned vs. actual performance.

Rewarding: This phase establishes the link between performance and reward. It aims to direct and reinforce effective work behaviours by determining and allocating equitable and appropriate rewards to employees.

The following table details the timing and activities required for each of the four key phases in the performance management cycle:

PHASE / TIMING / ACTIVITIES
PLANNING / This should occur at two months before the beginning of the new financial year and finalised in July each year i.e. beginning of the financial year. / Manager to schedule meeting with Employee to agree performance objectives for the year.
Both the Manager and the Employee are required to prepare for this meeting.
Manager and Employee to finalise and sign the employee’s scorecard.
COACHING / Ongoing throughout the year / Manager to create both formal and informal opportunities to provide feedback to the Employee on his/her performance against the agreed objectives.
Where baselines and targets have not been finalised by the start of the new performance cycle, these should be finalised and signed off within the first three months of the financial year.
Formal coaching sessions take place once a quarter where discussions, progress and agreed solutions are documented and signed off. The quarterly review in December is regarded as the formal mid year review (see below)
Employees to ask for feedback and assistance when required.
REVIEWING / December of each year – mid year review
July of each year - final review.
All performance reviews must be done before the new scorecard is signed off at the end of July. / Manager to set up formal mid-year review in December to assess the relevance of the objectives, evidence may need to be presented at this stage and the Employee’s performance against the objectives. No formal scoring is done at this stage as it is unlikely that KPIs and targets will already have been met.
Manager to set up a formal final review in June.
The process for reviewing performance is as follows:
Employee to gather required evidence throughout the year and submit the final evidence to the Manager before the formal review.
Manager to prepare rough scores/ratings of Employee’s performance against the agreed objectives as a result of the evidence.
Manager to ask Employee to prepare for formal review by rough scoring him/herself against the agreed objectives.
Manager and Employee to meet to conduct formal performance review and agree final scores. It may be necessary to have two meetings i.e. give Employee rough scores and allow him/her time to consider them before final agreement. Where an Employee and Manager disagree on the score, the Manager’s/Supervisor’s decision is final.
A moderation process is conducted to ensure parity and quality of the review process across the City.
Manager and Employee to prepare and agree individual learning plan – this only needs to be done at the final review in June and not at the mid-year review.
REWARDING / Section 57 employees Financial reward in February of next financial year -after the financial audit and the annual report have been tabled and after Council approves the results.
All employees on fixed term contracts – level 3 and below: financial reward in September /October.
Permanent employees: Non-financial rewards in November / In February of each year the Manager is required to provide information to the Human Resource Department in relation to the budget and the possible maximum payout required in terms of the performance reward scheme.
Manager to review the results of his/her department’s performance reviews and determine appropriate reward as per the performance reward scheme.
Manager to set up meeting with the Employee to give feedback on the link to reward as a result of the review and moderation process.

SECTION 2: SECTION 57 EMPLOYEES & EMPLOYEES ON FIXED TERM CONTRACTS

THE PERFORMANCE SCORECARD

Every section 57 employee and employees on fixed term contracts are required to have a performance scorecard which should be finalised and signed as close to the beginning of the financial year as possible – see regulations below:

The Local Government Performance Regulations for Municipal Managers and Managers directly accountable to Municipal Managers (August 2006) requires that the “parties must review the provisions of this agreement during June each year and must conclude a new performance agreement that replaces the previous agreement at least once a year within one month after the commencement of the new financial year.”

An example of the scorecard

PERFORMANCE SCORECARD – SECTION 57 & FIXED TERM CONTRACT EMPLOYEES
Employee Name: / Employee Number
Job Title: / Department:
Manager: / Date (Financial Year):
Position Purpose:
Balanced Scorecard / Legislative Compliance / Strategic Performance Objectives (SPOs) / Key Performance Areas (KPAs) / Weight / Key Performance Indicators (KPIs) / Baseline / Target / Evidence / Means of Verification
SPO / KPA
1 / 1.1 / 1=
2=
3=
4=
5=
1.2 / 1=
2=
3=
4=
5=
1.3 / 1=
2=
3=
4=
5=
2 / 2.1 / 1=
2=
3=
4=
5=
3 / 3.1. / 1=
2=
3=
4=
5=
3.2 / 1=
2=
3=
4=
5=
4 / 1=
2=
3=
4=
5=
5 / 1=
2=
3=
4=
5=
6 / 1=
2=
3=
4=
5=
7 / 1=
2=
3=
4=
5=
Employee’s Signature: / Manager’s Signature: / Date:
By signing this performance scorecard the manager and employee hereby indicate their full understanding of, and agreement with the contents of the scorecard. The manager and the employee both acknowledge that this is in full compliance with the City’s Performance Management Policy.

An example of a completed scorecard is attached as Annexure 1.

The City of Johannesburg – Performance Management Policy and Procedure May 2007Page 1 of 40

DEFINITIONS

TERM / DEFINITION
Position Purpose / Accurate, concise statement of why the job exists. It should summarise the overall role of the job from the City’s point of view.
Key Performance Area (KPA) / A key performance area is the explicit statement of a performance objective and outcome results that relate to a major functional, operational, technical, financial or behavioural area of the individual’s role and accountabilities. Any individual role will typically encompass five to seven KPAs – and never more than ten.
Strategic Performance Objective (SPO) / Strategic performance objectives are the most critical and strategically focused key performance areas of any individual’s role for a specific period (typically one year or more). Performance relative to the SPOs will determine the size of an individual’s annual incentive bonus. In most cases, a maximum of three SPOs will be defined for any individual. SPOs will generally be chosen from the range of KPAs defined for an individual.
Weighting / Relative importance of one key performance area to another. Each SPO or KPA must be assigned a weighting out of 100%. The sum of all the weightings for SPOs must equal 100% and the sum of all weightings for all KPAs must equal 100%.
KPI / Deliverables, standards, or measures used to indicate whether or not an SPO or KPA has been met. The results must be within the control of the employee, objective and observable, and capable of being measured.
Target / This refers to the output level the person must achieve in order to be given a particular performance score. Targets must consider realistic timeframes and it must be possible to implement them within a 12-month period. Inclusion of these targets eliminates subjectivity in the review process.
Target Rating Scale / A rating scale of 1 – 5 is used to determine the extent to which a target has been achieved. The details of the rating scale are as follows:
5 / Outstanding performance: Performance far exceeds the standard expected of an employee at this level.
4 / Performance significantly above expectations: Performance is significantly higher than the standard expected in the job.
3 / Fully effective: Performance fully meets the standards expected in all areas of the job.
2 / Performance not fully effective: Performance is below the standard required for the job in key areas. Performance meets some of the standards expected for the job.
1 / Unacceptable performance: Performance does not meet the standard expected for the job. The employee has failed to demonstrate the commitment or ability to bring performance up to the level expected in the job despite management efforts to encourage improvement.
Evidence / The proof that must be submitted to substantiate the level of achievement i.e. rating against the KPI. Evidence must be independent, clearly reflect achievement, and signed off where possible.
Ratings / S (self) indicates the individual’s rating for him/herself for each SPO or KPA, M (manager) indicates the manager’s rating, and C (consolidated) indicates the final rating achieved at the final performance review once the evidence has been discussed by the manager and employee together.

THE CITY MANAGER’S SCORECARD