Presentation to the Portfolio Committee on Public Enterprises The Alexkor Performance Management Process Presented By Arthur Sika & Yonella Nonyusa 19 March 2010

 Executives Performance Management Process.  Board Performance Management Process  Process, Mechanisms and Procedures  Performance Objectives  Measurable objectives  Evaluation of objectives The Presentation Content

The Alexkor Performance Management Process - An Overview

The Background  No Performance Management was in place  Strategic Planning Vs Strategic Execution – The Integrated Performance Management Model  Strategy execution (through Human Capital) is critical to strategic success; otherwise “plans will falter or wither on the vine because of poor execution,” i.e. poorly implemented Performance Management System.  Performance Management is the driving force or vehicle through which strategic plans are converted into deliverables The Overview Of The Current System  Performance management system for CEO & managers is place.  Performance contracts for CEO & Manager are in place.  Performance review / appraisal takes place once ever 4 months  Quarterly Performance reviewing is linked to rewarding (Perf Based Pay)  More details in this presentation…… The Alexkor Performance Management Process - An Overview

At Alexkor we view Performance Management as a process of establishing a shared understanding of what is to be achieved and how it is to be achieved and an approach to managing people that increases the probability of achieving success. The Alexkor Performance Management Process - An Overview

Click to edit Master subtitle style The Alexkor Performance Management Process - An Overview

Click to edit Master subtitle style The Alexkor Performance Management Process - An Overview

 The Alexkor Shareholders Compact / Corporate Objectives were cascaded into the CEO’s Performance Contract.  In the process the CEO’s immediate subordinates’ input was solicited (the bottom up approach) in the drafting of the CEO’s contract.  The CEO’s Performance Contract was then cascaded into the immediate subordinates’ Performance Contracts, the respective individuals were involved in this process.,  The respective manager’s Performance Contracts were then approved by the CEO before being signed by both the CEO & respective managers.  The various Managers’ Performance Contracts will be cascaded to their respective subordinates, again the respective employees will be involved in this process.  The employees Performance Contracts will also be checked & approved by the CEO, before being signed by the CEO, respective Managers & their respective staff. The Alexkor Performance Management Process - Performance Planning / Contracting Phase -

The measurable objectives as stipulated in the Shareholders Compact are as follows:  Continue operations as going concern and improvement of financial and operating ratios.  Revision of Alexkor Environmental Management Plan.  Conversion of old Alexkor’s old order mining rights to new order mining rights.  Transfer the converted land mining rights to Richtersveld Mining Company.  To enable the Pooling and Sharing Joint Venture between Alexkor and Richtersveld Mining Company The Alexkor Performance Management Process - Measurable Objectives -

Continued.....  To transfer the specified immovable properties ( farms and erven)  Transfer all movable assets relating to agricultural and maricultural businesses to the Richtersveld Agricultural Company.  Formal establishment in respect of the existing Alexander Bay village.  Compliance with MPRDA and any other relevant legislation and the terms and conditions of the mining rights.  Restructuring to achieve an optimum business model and establishment and implementation of appropriate control structure for Alexkor. The Alexkor Performance Management Process - Measurable Objectives -

 Alexkor’s performance in relation to the strategic objectives is measured with reference to KPIs as set out on the Shareholder’s Compact which include the key items of the strategic objectives.  The KPI’s are included in Alexkor Corporate Plan and are reported on in the Quarterly Reports submitted to the Shareholder on periodical basis.  The measurable objectives as set out in the Shareholder’s Compact. These measurable objectives are cascaded from the CEO down to management and the entire organisation. The Alexkor Performance Management Process - Evaluation Of Measurable Objectives -

 Revision of Alexkor’s Environmental Management Plan (EMP)  The revised EMP was submitted on November 2008 to the Department of Mineral Resources. We have so far not had any comebacks.  Conversion of Alexkor’s old order mining rights  The conversion was granted in December The execution should take place in about two to three weeks.  Transfer the converted land mining rights to the Richtersveld Mining Company (RMC)  The transfer of the rights will take place on execution.  To enable the Pooling and Sharing Joint Venture (PSJV) between Alexkor and the RMC  The DoS has certain suspensive conditions for the establishment of the PSJV  Revision of the EMP  Conversion of the Old order Mining Rights  Transfer of the Mining Rights to the RMC  A mining plan is to be put together by the interim joint board which does not include representatives of Alexkor. It is an independent Board which also has members of the Richtersveld Community. The Alexkor Performance Management Process - Evaluation Of Measurable Objectives -

 Performance Contracts as cascaded from the CEO’s Performance Contract are all in place for the CEOs immediate subordinates as follows;  Mine Manager  Financial Manager  Mine Engineer  Company Secretary  IT Manager  Human Resources Manager The Alexkor Performance Management Process - Performance Contracts For Management -

The Alexkor Performance Management Process - Performance Planning / Contracting Phase - Of essential significance in the Alexkor Performance Management Process is that both the Business Strategic Objectives & the Business Values were cascaded into the Performance Contract, as illustrated below.

 The Alexkor Performance Management Systems encourages constant coaching & feedback in line with the Performance Contract.  T o ensure good understanding & proper use, the CEO & Managers were taken through the following  What is Performance Coaching?  Guidelines for Effective Coaching (When To Coach, How To Coach, What To Coach, Why Coach)  Formal & Informal Coaching  Guidelines for Providing Feedback (Positive Vs Negative Feedback)  Characteristics of Feedback for Improving / Developing Performance  Pitfalls to Avoid When Giving Feedback  Guidelines for How Often to Conduct “Update Review Discussions”  Preparing for the Coaching Discussion  Steps for Conducting the Coaching Discussion  Key Communication Skills (Questioning Techniques & Listening Skills)  Tips for Observing and Documenting Behaviours The Alexkor Performance Management Process - Performance Coaching / Feedback Phase -

The Alexkor Performance Management Process - Performance Reviewing / Appraisal Phase -  Performance Appraisals – On a Quarterly Basis  180% Performance Management Appraisal process is followed in Alexkor.  Manager review themselves first before sitting with the CEO to have a discussion on the overall performance review discussion for the entire quarter.  To ensure good understanding CEO & managers where taken through the following;  How to conduct a Performance Review?  Overview of Steps in Performance Review  Performance Reviewing – Guiding Principles  Preparing For A Performance Review  What is the Quarterly / Annual Performance Review Discussion?  Steps for Conducting the Annual Performance Review Discussion  The Performance Ratings.  Guidelines for Determining the Ratings  Appraisal Pitfalls to be Avoided  Dealing with Performance Review Problems

 In line with market related salaries & remuneration practices.  Fixed salary structure & Variable salary structure.  Linking Performance To Pay from the quarterly appraisals that are conducted.  Performance Based Pay System – the performance increment given is determined by taking note of current salary Vs the market & overall performance rating. The Alexkor Performance Management Process - Performance Rewarding Phase -

 The entire Management team at Alexkor were then taken through Performance Management Training Program to ensure thorough comprehension of the following Performance Phases,  Performance Planning,  Performance Coaching,  Performance Reviewing &  Performance Rewarding  The bottom line was to transfer expertise, ensure thorough understanding of the entire Performance Management process by the Alexkor Management to ensure effective application in Alexkor.  The rationale is that, Performance Management will never survive without Management thorough understanding & therefore support. The Alexkor Performance Management Process - An Overview

 When its implemented for the entire staff, they will as well be taken through a one day Performance Management Orientation Training Program to ensure understanding of the Performance Management Process  A Performance Management Policy & Procedure Guide for Alexkor – a procedural document that details the entire Performance Management System for reference purposes was is also in place. The Alexkor Performance Management Process - An Overview

 At the board meeting of February 2010 the board deliberated on the process for the evaluation of its performance.  The board agreed that a self –assessment of the board performance will be done and will be followed by an extensive board members performance evaluation by the Chairperson.  Thereafter and overall board assessment by an independent assessor. This process will take place during April Board Performance - Implementing DPE Guidelines

 The Remuneration of the Board of Directors is based on the DPE “ State Owned Enterprises: Remuneration Guidelines- Chairpersons and Non- Executive Directors”.  The SOE categorisation according to the Guidelines determine fee levels.  Board members are remunerated according to the Guidelines:  On retainer fee basis for Main Board Membership and Committee membership  At a median of the range for Alexkor size.  Board members are also reimbursed for the expenses. Board Remuneration - Implementing DPE Guidelines

Turnover at Executive level Financial Year Exits01 Headcount06 Turnover16.66

Demographics at Executive level Demographics at Executive Level FemaleMale African WhiteTotal 31-Mar %33.33%50.00%100%

Status on vacancies at Executive level CEO Khetiwe McClain-Maseko Security Manager (Consultant) C Wilmans Mine Engineer M Mpanza Company Secretary T Kgari CFO B Lategan Acting Mine Manager W Basson HR Officer Vacant OCCUPIED VACANT

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