The Framework for the Evaluation of Heads of Department (HODS) 

13 September 2000

Thank you ladies and gentleman for the opportunity to brief you on the development of a framework for the evaluation of heads of department (HODs) in the South African public service. The background to the development of this framework is as follows:

BACKGROUND

A system of performance agreements was implemented in 1998 for senior managers (including HODs) in the public service. However, there has been no systematic and coherent process through which these performance agreements have been assessed. The result was that the performance of only 14 Directors-General of national departments were evaluated during 1999. Ministries are too stretched in capacity to manage the evaluation process in a meaningful way. Many HODs have indicated that they do not receive systematic and comprehensive feedback on their performance. In addition, Government has also not received systematic feedback on the achievement of its priorities.

Against this background, the Public Service Commission (PSC) was tasked by Cabinet to develop a framework to assist executing authorities with the evaluation of their HODs. The development of this framework by the PSC, as an independent body, falls within its constitutional mandate to propose measures to improve performance and service delivery in the public service

The PSC, in the development of the framework, conducted research to determine how the evaluation of HODs is dealt with in the public services of Australia, New Zealand, Canada, Singapore and the United Kingdom. We have drawn the following lessons from the experiences of these countries which have informed our approach to the evaluation of the HODs:-

  • Evaluation of the Directors-General/Chief Executives/Permanent Secretaries, the elite of the public service, is a very high profile event, accorded top priority.

  • It is located at the highest office in government i.e. Prime Ministers Office (President in our case), and led/driven by high level functionaries from the Prime Ministers Office and Public Service Commission.

  • It is linked to the appointment process through a performance management instrument of one kind or the other.

A total of three alternatives were developed by the PSC and written inputs were obtained from executing authorities and HODs. The responses received indicated support for a structured process through which the performance of HODs could be evaluated. The various options were also discussed with the Governance and Administration Cluster of the Forum of South African Directors-General whereafter it was discussed and approved by Cabinet.

THE LEGISLATIVE FRAMEWORK

The legislative framework that guides the performance evaluation of heads of department is complex and requires an understanding of the broad legislative context within which it is contained:

  • Section 3(B)(1) of the Public Service Act, 1994 entrusts the President with the power to undertake and manage the appointment and other career incidents of Heads of Department of National Departments and Premiers to deal with the appointment and other career incidents of Provincial Heads of Department. The President has delegated the powers entrusted to him, except those in relation to the deployment of heads of department, to the Deputy President and Ministers.

  • The power to award salary increases in accordance with the performance of heads of national departments has been delegated to Ministers as executing authorities for departments. This power must be exercised in accordance with the bases provided by the Minister for Public Service and Administration after consultation with the Minister. The Minister for Public Service and Administration determines the framework for salary increases and cash bonuses for heads of department.

  • Section 12(4) of the Public Service Act stipulates that an employment contract may include any term and condition agreed upon between the relevant executing authority and the Head of Department as to, inter alia, specific performance criteria for evaluating the performance of the Head of Department. An employment contract for heads of department is also prescribed in Annexure 2 to the Public Service Regulations (attached as Annexure 1). This contract includes terms and conditions where the entering into a performance agreement and managing salary increases are prescribed.

  • All salary increases of heads of departments depend on their performance as agreed to in their respective performance agreements, which can then be increased within the provisions of the framework provided by the Minister for Public Service and Administration. A performance agreement can serve as evidence in instances where measures for termination of service based on inefficiency are involved.

Two issues of importance to the development of a framework for the evaluation of HODs emanate from our legislative framework:

  • Firstly, the authority to evaluate HODs is vested solely in executing authorities and cannot be delegated. Any framework to evaluate HODs must therefore be aimed at assisting the executing authorities during the evaluation process and not take over the evaluation of HODs.

  • Secondly, the basis for the evaluation of HODs must be the performance agreements concluded between themselves and their executing authorities.

OBJECTIVES WITH THE FRAMEWORK

The framework developed by the PSC proposes uniform but flexible structures and processes according to which the performance of all HODs can be evaluated by executing authorities. The evaluation framework aims to achieve the following:

  • To provide the bases upon which the government and executing authorities are informed on the extent of achievement of objectives.
  • The identification of developmental needs of HODs.
  • Feedback to HODs on their performance and organisational effectiveness.
  • The bases upon which executing authorities can award salary increments and cash bonuses or take any steps deemed necessary to address poor performance.

KEY PRINCIPLES

The following key principles have underpinned the development of the evaluation framework and processes in South Africa:

  • An effective performance agreement system should be the basis of the evaluation.

    A performance agreement is the most important element in the evaluation of a head of department. It contains the details of what a head of department will be evaluated against. The basis for evaluation in most of the countries/states studied by the PSC, is performance agreements (or similar instruments) reached between either the relevant executing authority and the head of department or the Head of State and the head of department. Performance agreements allow monitoring and review of HODs performance against agreed accountabilities. Clear performance criteria are also normally included in performance agreements which simplifies assessment of performance .

  • Whilst primarily aimed at the evaluation of the individual HOD, the evaluation process should facilitate assessment of institutional effectiveness.
Executing authorities are themselves measured against the delivery of services by their respective departments. Accordingly, the evaluation of HODs against the objectives contained in their performance agreements should provide insight into the service delivery of their departments. Annual departmental reports and reports of the Auditor-General may further be used during the evaluation of HODs. These reports provide insight into institutional effectiveness and efficiency.
  • Inputs into the evaluation process should wherever practicable involve independent role-players as well as peers. Executing authorities should, however, remain responsible for final decisions.

It was observed that many of the countries/states studied by the PSC make use of what is referred to as peer assessment during the evaluation process. In some countries the actual evaluation committee comprises of peers of the chief executives that are being evaluated eg. New Zealand and Singapore. In other instances peer assessment takes place as a key phase of the evaluation process as a whole eg. Canada.

A further development that was observed is the introduction of 360 degree evaluation as part of the methodology used to evaluate HODs eg. Singapore. This involves inputs into the evaluation process by clients, other executing authorities, peers, staff as well as other persons who in the opinion of the evaluating body have insight into the performance of the relevant HOD. The involvement of such persons during the evaluation process should be limited to the provisioning of assistance to executing authorities. They can by no means be involved in final decisions that emanate from the evaluation process. As discussed in the legislative framework, the authority and responsibility to take such decisions remains that of the executing authority.

  • The evaluation process should provide a comprehensive and credible procedural framework in order to ensure consistency in the evaluation process.

The systems used in the majority of the countries studied provide clear instructions to HODs on the manner in which they will be evaluated. Guidelines are normally circulated early in the year which sets out the process of evaluation to be followed in that particular year. The advantage of providing guidelines is that it-

  • ensures that the information submitted to an evaluation committee is consistent;
  • simplifies the task of processing information in an appropriate format to facilitate evaluation committee meetings; and
  • ensures that the participants in the evaluation process know exactly what is expected of them and by when.
  • The framework should provide an indication of the level of performance, alert to inefficiency and facilitate decisions on the granting of salary increases and cash bonuses.

The first objective with any evaluation system is to provide a clear indication of the level of a subjects performance. Annexure 2 to the Public Service Regulations states that the employment contract of a head of department is directly linked to his/her performance agreement and that the employer may deal with a head of department in accordance with the applicable collective agreement reached in the Public Service Co-ordinating Bargaining Chamber and the relevant labour legislation if prescribed objectives/milestones are not achieved. The results of the evaluation process of heads of department based on their performance agreement can therefore also trigger a process aimed at termination of service based on inefficiency (with due regard to labour legislation).

Resolution 13 of the PSCBC further provides that salary adjustments and cash bonuses may be awarded in accordance with guidelines provided by the Minister for Public Service and Administration. A framework for the evaluation of HODs must therefore also facilitate advice to assist executing authorities in deciding whether salary increases and cash bonuses (in accordance with pre-determined categories) may be granted.

  • The constitution of the evaluation panel should be flexible to respond to the uniqueness of departments or sectors.

Executing authorities are in the best position to determine which role players have insight into the performance of their HODs. A rigid framework which predetermines the full composition of evaluation panels will undermine the ability of such panels to accommodate the uniqueness of departments or sectors.

  • An integrated approach should be followed, aligned to planning and MTEF cycles.

From a practical point of view it will be beneficial for executing authorities and HODs to link the evaluation process to other regulated reporting and planning requirements. The majority of cycles are linked to financial years, hence the proposal to link our HOD evaluation to the MTEF cycles. It is up to the HOD and the executing authority to determine whether one or more annual cycles will be used as the time frame for the evaluation.

METHODOLOGY

With due consideration to the principles that have been discussed, the following methodology to be used for the evaluation of HODs was decided upon:

Evaluation panels

Executing authorities must appoint evaluation panels to assist them with the evaluation of their HODs. The nomination of members to serve on evaluation panels is left to the discretion of executing authorities. The evaluation panels can reflect all stakeholders as dictated by the nature of the department concerned and may also involve the peers of HODs. All executing authorities will be directly involved as part of the panel during deliberations on their HODs performance.

Each evaluation panel appointed by executing authorities for HODs of national departments will be chaired by either the Chairperson or Deputy-Chairperson of the PSC. Panels appointed for provincial HODs will be chaired by the Commissioner resident in that province or, in their absence, by one of the nationally nominated Commissioners (other than the Chairperson or Deputy-Chairperson). The involvement of the PSC on these panels is to ensure, as independent role player, that the evaluation process is fair and equitable and that the same norms and standards are applied to all HODs in terms of procedures. The involvement of the PSC should ensure a level of consistency across the board.

The role of evaluation panels will be to advise executing authorities on the performance of their HODs.

Secretariat

All evaluation panels will be supported by a secretariat to be appointed by the executing authority. For this purpose executing authorities can make use of staff in their own offices/ministries or appoint external consultants. The PSC is also willing to make the services of its Office available to executing authorities to act as secretariat to their evaluation panels.

The role of the secretariat will be to collate and process all information received from HODs and executing authorities into a reporting format for the evaluation panels and to take minutes of proceedings during meetings of the evaluation panels.

Executing authority

All executing authorities will participate in discussions of the evaluation panels and will provide input when deemed necessary or when required by the panel. The advice emanating from the evaluation panel will not be binding on executing authorities and they will still be responsible for the final decisions emanating from the evaluation process.

Evaluation process

The evaluation of HODs will be aligned to the planning and the MTEF cycles. It therefore follows that evaluation periods will be linked to financial years. Executing authorities and their HODs may decide on the number of financial years to be covered by an evaluation. The minimum period to be covered by an evaluation will be one financial year. Should an evaluation period cover more than one financial year, salary adjustments and cash bonuses will be cumulatively payable where necessary.

HODs and their executing authorities will have to complete negotiations and sign performance agreements by the end of April of each year. Progress made in relation to the set objectives in the performance agreements must be reviewed on a regular basis as agreed to between executing authorities and their HODs.

The information to be used during the evaluation process must be forwarded to the designated secretariat by not later than 30 June of the year in which the evaluation period agreed to between the executing authority and HOD has been completed. Minimum information that will be prescribed for use during the evaluation process will be the following:

  • The performance agreement, the departments business and strategic plan, the budget and expenditure report for the relevant financial year and the departments annual report. This will facilitate an assessment of institutional performance.

  • A verification statement to be completed by the executing authority and HOD detailing the achievement of targets and outcomes provided for in the performance agreement.
360 degree evaluation

In addition to the prescribed information, executing authorities may also make use of 360 degree evaluation, balanced scorecard or any other credible assessment metHODology. An example of an evaluation instrument that can be used by evaluation panels will be provided to all executing authorities by the PSC.

The Secretariat

The designated secretariat will collate all information submitted to it and forward it to the evaluation panel for consideration. During the evaluation process, evaluation panels will obtain inputs from both the executing authority and HOD.

After the evaluation panel has considered all information submitted to it, it will provide advice in writing to the relevant executing authority. The executing authority, with due consideration to this advice, will make decisions on salary increases, cash bonuses and other actions to be taken in terms of the performance of their HODs. The dates of annual salary adjustments for HODs will be linked to that applicable to the rest of the senior management service. The results of the evaluation process must be forwarded to the President in the case of national HODs, and Premiers in the case of provincial HODs.

Review

Where a HOD is dissatisfied with a decision of the executing authority regarding the evaluation she/he may request a review of the matter. The performance agreements of HODs provide for a dispute settlement procedure according to which a person is identified to which disputes must be referred for mediation. As a first step disputes emanating from the performance evaluation of HODs must be referred to the agreed person. If, however, the dispute cannot be resolved by such a person, the matter can be referred to a Review Committee. A national HOD may lodge his/her dissatisfaction with a Review Committee consisting of the Deputy President and the Minister for Public Service and Administration or their nominees.

In cases where Premiers have not delegated their authority regarding the career incidents of HODs to members of executive councils (MECs), the same review procedure will have to apply to both heads of national and provincial departments. In cases where Premiers have delegated their authority, the Review Committee will consist of the relevant Premier and a MEC nominated by the Premier or their nominees.

Implementation

The implementation of the framework will as a first step be made compulsory for the evaluation of all heads of national departments. Premiers will be advised by the Minister for Public Service and Administration to adopt the same approach.

The implementation of the framework will be facilitated through prescripts to be captured in the Public Service Regulations as well as guidelines to be issued by the PSC.

Guidelines to be provided by the PSC on an annual basis will contain details of additional information that can be used during the evaluation process as well as possible evaluation instruments to be used by executing authorities and the evaluation panels.

SUMMARY

The role of the PSC in the evaluation process should be viewed against the backdrop of its Constitutional mandate to promote the principles of sound public administration. It should further be noted that the involvement of the PSC as part of the evaluation panels will be limited to the provisioning of advice. The PSC will in no way be party to any decision emanating from the evaluation process.

The evaluation of HODs will provide important feedback to government on progress in the public service and will also facilitate accountable decisions regarding the careers of HODs. These important issues have been neglected in the past and for this reason the PSC is willing to make the services of its members and Office available to executing authorities.

Prior to the implementation of this framework the evaluation of HODs has not been regulated to a similar extent in the past. The framework as a totally new concept will therefore be subject to careful scrutiny during its first few years of application in order to identify and iron out deficiencies and to effect the necessary amendments. It can be expected that the system as introduced will not be perfect, but it represents a significant step towards the enhancement of professionalism and service delivery in the public service.

Ladies and gentleman, I thank you.

 

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