Apart from the where, when and how of employee performance management, not much has changed since the emergence of COVID-19. This is according to Lindiwe Sebesho, Master Reward Specialist and Executive Committee Member at the South African Reward Association (SARA).

"This is because the key principles in performance management remain relevant in measuring and improving employee contribution to business performance or growth," she says.

Performance philosophy
Many organisations have become a mix of full time on-premises, fixed-hour staff and work-from-home (WFH) employees with flexible hours. So whilst how their performance is set, monitored and evaluated may be more complex, the need to manage performance remains key for business success. Leveraging technology, most employers are optimising various digital platforms that enable real-time, simple-to-use processes to ease the management of performance across the expanded enterprise.

However, performance management principles remain focused on the need to set clear performance objectives and on holding ongoing feedback and feed-forward conversations between employers, workers and teams to optimise their contribution to delivering on corporate strategy.

Therefore this process still aims to foster a continuous improvement ethic that focused individuals and teams on activities that drive business growth. Its outcomes are largely still ratings based and are used to inform fair, business-aligned skills development, reward and talent decisions such as succession planning.

Key principles
Organisations still need to clearly communicate their purpose, growth goals, ambition and strategy within a well-defined business context.

Next, they must align employee efforts through personal, team, financial and non-financial objectives and key results (OKRs) that capture essential outcomes.

As staff execute their duties, regular check-in conversations and real-time feedback enable development and continuous improvement of performance.

Further, regular feedback and ratings should be administered, leading to formal annual evaluations that use an established rating scale linked to desired standards of contribution.

These rating outcomes are then used as input for making reward and other talent-related decisions.

"Whatever the circumstances, business must not become distracted from this proven approach to performance management even where different working arrangements have been adopted," says Sebesho.

Underperformance
With the country's economic downturn, organisations are eager to maximise resource output wherever possible. Accordingly there is a more concerted effort towards the proactive management of underperformance among staff.

"While managers may have let underperformance slide in the past, they are now more focused On ensuring that every worker contributes to growth consistently," says Sebesho.

As part of managing under-performance, it is key to understand the factors that negatively impact employee performance.

The first is a lack of skills that could result from an ineffective education system and/or limited investment by employers in training and development. Assigning employees to roles that do not fit their competencies can also hamper optimal performance. Organisations that invest in skilling up workers and ensure employees are equal to their responsibilities can overcome this hurdle.

The second is low employee morale and engagement, which can be caused by anything from the threat of retrenchments to rewards that do not align with worker values. The best solution is for management to establish a culture of open communication and engage with staff to determine the causes of poor morale. A show of concern alone can help reignite employee interest, although employers must follow through with solutions to maintain trust.

Even workers with good morale may suffer from the third factor, a lack of motivation. This can be caused by societal conditions, such as social unrest or political instability, leading to personal problems, like poor mental or physical health. Employers can offset these obstacles with a comprehensive employee value proposition, additional mental and physical wellness support, and positive reinforcement through recognition of desired behaviours.

Finally, a lack of resources may prevent employees from producing their best work. Low national economic growth, employer budget cuts or inadequate infrastructure, like transport and telecoms, can rob them of opportunities to work effectively. Employers should consider budgeting for critical resources that enable better productivity, and provide alternative working arrangements, like flexible hours or work-from-home solutions where the nature of jobs allow for such.  They also need to provide technical and digital skills support where required.

Enhanced performance
In summary, WFH and hybrid models necessitated by the pandemic have created greater flexibility in the where, how and when of employee performance but have not necessarily changed the core principles of performance management which remain largely the same and employers must apply them consistently for the best results.

Employers should therefore leverage technology to develop simple, real-time processes that enable performance management across expanded enterprise boundaries and maximise their people resources by minimising underperformance.

"By acknowledging these trends, employers can maximise their workforce's performance and pursue their full growth potential despite the various operational challenges they face" says Sebesho.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za 

For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
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The litany of serious governance failures laid bare in the published elements of the Zondo Report is a wake-up for South Africa, and remuneration issues are at the heart of the problem—and it’s solution, argues Dr Mark Bussin, Executive Committee Member of the South African Reward Association (SARA).

“In many instances, inappropriate remuneration is the coalface of corruption and incompetence in our state-owned enterprises (SOEs) because, after all, it boils down to money,” he says.

“If we sort out remuneration, we are half way to putting our SOEs back on the path for growth, with tremendous knock-on benefits for the economy as a whole.”

A major contributor to the problem comes from the way in which Ministers often appoint CEOs directly. Best practice as recommended in King IV’s Supplement on SOEs advises that Ministers only appoint CEOs from a shortlist compiled by the board.

Bypassing the board reduces it—and its committees, including the remuneration committee—to a mere rubber stamp. A CEO that is appointed directly by the Minister is in a position to instruct the remuneration committee to approve unjustified and excessive pay hikes and bonuses as has been done in numerous SOEs.

Another key issue that emerges from the Zondo Reports is the negative impact of cadre deployment. With political connections counting more than competence or ethics in many of these deployments, many remuneration-committee members are incompetent even if they are not actively corrupt.

This means they cannot properly interrogate remuneration benchmark studies and ask the right kind of searching questions.

“In fact, these incompetent but politically connected individuals can easily be led to a foregone conclusion,” he says.
Dr Bussin believes that too many board members rely on their emoluments from a single board, inclining them to adopting a passive role when it comes to controversial issues, such as the perennially vexed question of executive pay.
To preserve their independence, non-executive directors should not be allowed to earn more than 20% of their income from one company, he says.

“The real culprit here is cadre deployment which simply loads overheads onto companies for scant benefit. One way to attack this problem would be simply to do away with individual SOE remuneration committees, and institute a central one under the auspices of National Treasury,” he says.

A similar approach was evident in President Ramaphosa’s 2022 State of the Nation, which indicated that moves were afoot to implement a centralised shareholder model for SOEs to improve governance. Many commentators pointed out that in essence the plan suggests that the only way to bring the sector under control is to impose governance from above.

A centralised remuneration committee would immediately eliminate the need for hundreds of expensive board posts—a quick win for cash-strapped SOEs.

“More important still, this approach would re-establish the link between remuneration and executive performance and value delivered to the company. It would also make being a deployed cadre much less attractive to incompetent and corrupt individuals,” Dr Bussin concludes.

“Centralising remuneration could be accomplished easily and the payoffs would be large and immediate.”

ENDS
 
MEDIA CONTACT: Rosa-Mari Le Roux, [email protected], 060 995 6277, www.atthatpoint.co.za 

For more information on SARA please visit:
Website: www.sara.co.za  
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association