NATIONAL RESEARCH FOUNDATION PERFORMANCE MANAGEMENT WORKSHOP

The Purpose of the Workshop To create an awareness of the performance management system based on strategic plans and business plans

Planning process Strategic plan at the organisational level (highest level) Business plans (second level) Performance agreement at the personal/job level (The lowest level of planning in the organisation)

Strategy implementation process The components within the NRF strategic management system The strategic plan for the NRF The business plans for the units/divisions in the NRF i.e RSA The personal performance contracts that link to the strategic planning system

NRF’s PROCESS OF PERFORMANCE MANAGEMENT SYTEM 1. PERFORMANCE PLANNING (Business / Strategic Plan) NRF ACT) Identification of Key performance Areas to achieve organisational (NRF) goals BUSINES UNITS GOALS(Facilities goals) Develop specific action to achieve goals Employees’ input regarding goals to be achieved 2. PERFORMANCE CONTRACTING (Individual/Team goals) 3. PERFORMANCE MEASUREMENT/ ASSESSMENT 4. PERFORMANCE ENHANCEMENT Development Managing Poor Performance Reward and recognition of performance EXTERNAL FACTORS INFLUENCING PERFORMANCE MANAGEMENT PROCESS * Transformation -Employment Equity Act - Skills Development Act * White Paper on Science & Technology - National System of Innovation OPERATIONAL STRATEGIES AND GOALS

Plans only work as well as the people want them to Your plans are no better than the willingness and ability of the people involved to carry them out. In the final analysis, people determine how effective your plans will be. Create ownership Communicate 4-ways Empower people Give recognition

Performance Agreement “Formal statement of the overall, continuing commitments, output results, accountabilities and standards of a position There are two clear facets to each job: called the key performance areas = The objectives to be achieved = The outputs which will achieve the objectives

Importance of your Performance Agreement Your performance agreement starts you on the road to transparency - it makes visible what your job is

Key Performance Areas Definition The main areas in which results must be achieved on a continuous basis in order to realize the core purpose, of that particular job/function

Performance standard/measure Definition What is the acceptance level of achievement in each of the performance areas? It is a clear and concrete description on the standards of performance, which must be achieved by the employee. It is a statement that describes two things namely What it is which the employee must do, and How well it must be done

Job Outputs Definition These are the required outputs in terms of the employee’s current job description that need to be performed on a daily (ongoing) basis in achieving business goals

Key Performance Indicators Definition It is a concrete description of the measuring format of required outputs. (Where will evidence be found that the standards were achieved e.g. Audit queries report & control statements)

The first steps Know the objectives and plans of your business unit Developing Key Performance Areas for yourself Know the objectives and plans of your business unit Know what outputs/activities will achieve those objectives Develop measurable objectives with performance standards/measures which will enhance performance/improve results for yourself

Key performance areas Financial Internal Business Processes In which areas do we set objectives by which we measure overall achievement? Financial Internal Business Processes Customer/stakeholder Learning and Growth Every person in the organisation will contribute to the wellbeing of the organisation if they work towards the achievement of these objectives

Key performance area Revenue growth and mix Financial Objectives. The main areas in which results must be achieved Revenue growth and mix Cost reduction/productivity improvement Asset utilization/investment strategy

Performance standards: Financial Financial objectives: What it is which the employee must do and how well must it be done The growth of income from all sources The change of revenue mix i.e proportions from grants and budget vote Asset utilization - The improvement in utilization of assets i.e machinery, space and capacity

The Key performance area Internal Business Processes objectives: The main areas in which results must be achieved Innovation Operational improvement through: * Cycle time * First pass rate

Performance standards: Internal business processes Internal business processes: What it is which the employee must do and how well it be done Innovation - new or better ways of doing things (which processes?) Operational improvements: Through the improvement of how long it takes to complete (cycle times) and doing it right first time (first pass rate) How much do we want to improve ?

The Key performance areas: Customer Stakeholder Customer objectives: The main areas in which results must be achieved Market share Customer retention Customer acquisition Customer/stakeholder satisfaction

Performance standards Customer/stakeholder objectives: What it is which the employee must do and how well it must be done Market share -What share of the market do you have (and want?) Customer retention - How many do we have and what percentage can we retain? Customer/stakeholder satisfaction - How do we pro-actively satisfy them? How satisfied are they?

The Key Result Indicators: Learning and Growth Learning and Growth objectives: The main areas in which results must be achieved Employee satisfaction Employee retention Employee productivity through: * Staff competencies * Technology improvement * Climate for action

Performance standards Customer/stakeholder objectives: What it is which the employee must do and how well must it be done Employee satisfaction: the issues that create productivity (How much improvement do we want?) Staff competencies: The number of new skills to be developed Technology improvement: New technology that improves efficiency

Key performance standards The cause and effect relationship Every objective can be linked to required action in one or more of the other perspectives Example: If you have set a high skills development objective, what are the financial implications on your cost objective (and adjust if necessary)

Performance standards Performance Drivers and initiatives are identified In order to improve performance organizations have to drive the new initiatives (or they may not become a reality) An example: Skills development programme (the driver behind the initiative)

Technique for developing performance contracts 1)Develop Objectives for the division based on the Business Plan 2)Develop the Objectives for every position with target(ed) performance standards and weights in the four perspectives. 3)Agree with superior on priorities 4) Manage strategically. The achievement of the individual objectives should achieve the overall results

Performance Standards/measurements What is an acceptable standard Performance standards are intended to set a standard at high, but achievable level Performance standards are aimed at performance enhancement, therefore may be at a level that is higher than the current It is easier to set new standards if you know how well you are doing currently

Allocating weights Weights are allocated according to the importance of the objective/output (activity) in achieving the overall objective of the job and the division/organisation Weights are a guide as to the effort/time that should be spent on that objective, outcome/activity

Delegating Identify objectives and activities/outputs for each person Developing Subordinates Performance Agreements Identify objectives and activities/outputs for each person Take into account the current and future desired level of performance and requirements of the position

How to develop the ACTIVITIES/OUTPUTS of a performance agreement Some basic issues that are important There are various “levels” of people in the organisation Some people are in charge of others i.e. are managers. Others do not have subordinates The NRF distinguishes between two basis “streams” of employees, scientists and non-scientists

How to develop a performance agreement The most important is to establish what the objectives are of the job Next develop outputs (activities) which will achieve the objectives Finally attach weights, in order of importance to the objectives (100) and to the outputs (100)

The Key performance areas (Outputs) The work to be done (activities) which if they are done well will achieve the objective of the person in that job For people who have subordinates: - Develop the management activities (see example) - Develop the Technical activities (see

The Key performance areas (objectives) Example of setting objectives Example: OBJECTIVE!!!!! The result (kpa-objective) that we desire is to develop skills in the division The performance standard: Two per person The performance indicator: Monthly Skills Development report

Key performance area (output) Example of activity Example In order to achieve the objective (previous slide) Key performance area: Develop skills plan for every person Performance standard: All within budget KPI: Skills plan implemented

Performance Agreement The Performance agreement Use the template provided to: Develop KPA (objectives) in four perspectives Develop the KPA outputs (activities) that will produce the results Ensure that these link to that of your immediate manager/team Agree on weights, performance standards and measurements Sign agreement with team/manager Review regularly as objectives, etc change

The allocation of weights (a benchmark) Within Key Performance Areas (OUTPUTS) Senior Managers should have at least 50% of the weight allocated to management activity/outputs and the balance to technical activity/outputs People who do not have subordinates may have 100% technical activity/outputs

NRF Completion Dates The whole process from strategy development and implementation through to each person having performance agreement must be completed by the end of June 2002……. Thank you.