According to Khalo et al. (2013:110) a substantial body of knowledge management as a science has developed since the late 1970s; encompassing concepts such as performance measures, performance indicators, performance appraisal and review, value for money and, more recently, the total quality management. The planning framework for local government is based on the notion that the formulation of a plan (IDP) is not sufficient; adequate implementation is fundamental for the success of local government. The Local Government: White Paper on Local Government, 1998 states that performance management is crucial to ensuring that plans are being implemented and have the desired development impact, and the resources are used efficiently.
5.2.1 Definitions of performance management
There are several definitions relating to performance management which are relevant to this study. These definitions are cited below:
Armstrong (1994:23) defines performance management as “A method of establishing shared understanding about what is to be achieved, and an approach to managing and developing people in a way that increases the probability that defined outputs will be achieved in both the short and longer terms”.
The Service Delivery Review (2003) states performance management is viewed as:
“… the systematic, data-oriented approach to managing people at work that relies on positive reinforcement as the major way to maximise performance”.
From the above definition, the following three components can be noted:
Systematic (clear processes and procedures);
Data-oriented (if you cannot measure it, you cannot manage it); and
Positive reinforcement (the system is used in a positive, progressive manner).
The overall objective of performance management is to establish an organisational culture in which individuals and teams take responsibility for the continuous
improvement of the organisation, and own their own skills and contributions to desired results ( Pillay & Subban, 2007:56).
5.2.2 Objectives of a performance management system
According to SALGA (2003c:72) the objectives of implementing a performance management system in municipalities are to:
Achieve sustainable improvements in service delivery to the community;
Develop constructive and open relationships between managers/supervisors and employees;
Encourage and reward good performance;
Link the IDP to team and individual performance;
Enable individuals to develop their abilities, increase their job satisfaction and achieve their full potential so that both the employee and the municipality benefit; and
Fulfil the requirements of the Local Government: Municipal Systems Act 32 of 2000.
5.2.3 Principles of performance management
Pillay and Subban (2007:59) state that the principles of performance management can be summarised as follows:
It translates corporate goals into individual, team, departmental and divisional goals;
It is a continuous and evolutionary process, in which performance improves over time;
It relies on consensus and co-operation rather than control or coercion;
It creates a shared understanding of what is required to improve performance and how this will be achieved;
It requires a management style that is open and honest, and encourages two- way communication between superiors and subordinates;
It requires continuous feedback;
Feedback loops enable the experiences and knowledge gained on the job by individuals to modify corporate objectives;
It measures and assesses all performance against jointly agreed goals; and
It should apply to all staff and is not primarily concerned with linking performance to financial reward (Pillay & Subban, 2007:59).
According to Pillay and Subban (2007:59) the underlying rationale behind these principles is to review and remove blockages to service delivery. Khalo et al., (2013:116) add that it is generally agreed that performance management has seven key principles that should be applied in designing an effective performance management system (PMS). These are as follows:
Clarity of purpose: Performance management is a means to obtain management information for monitoring purposes, but, most importantly, to focus management attention on areas where change is needed. There may be different information needs for different functional managers, and therefore appropriate measures must be set to ensure that everybody benefits (Khalo et al., 2013:116).
Focus: Performance management should primarily focus on the strategic objectives of their institution, reflecting both the core issues of the institution and the priority areas for improvement (Khalo et al., 2013:116).
Balance: Performance management should provide a holistic view of performance across the institution, reflecting the latter’s main systems, processes and activities. It is therefore appropriate to set a number of key operational measures, in addition to the strategic objectives, to ensure that all significant areas are covered (Khalo et al., 2013:116).
Ownership: Managers on all levels of the institution must take ownership to ensure that performance management is more than a paper exercise.
Experience suggest that performance management systems that are imposed from senior levels are unlikely to be as helpful or accurate as those that are owned and understood by the managers who will be responsible for collecting and analysing the data (Khalo et al., 2013:116).
Scrutiny: Scrutiny is important to analyse the focus of the performance management system and to ensure the accuracy, reliability and validity of data
collected. On-going scrutiny is necessary to ensure that the measures remain relevant and that the information generated is useful (Khalo et al., 2013:117).
On-going development: Performance management must continuously develop to adapt to changing circumstances (externally and internally). Changing systems, processes and activities; new government priorities and legislation;
or advances in technology might make a measure irrelevant. The measures should therefore be improved or alternative measures be developed (Khalo et al., 2013:117).
Continuous improvement: Performance measures will be most useful if they are incorporated in a system of continuous review that includes regular monitoring and remedies for low levels of performance. It is necessary to establish monitoring and reporting mechanisms within the institution so that clear lines of accountability are put in place. Responsibility for achieving the measures needs to be assigned to the appropriate level (Khalo et al., 2013:117).