Recent reports of Eskom executives awarding themselves R6 million bonus per person from a pool of R1.7bn has left a sour taste in the mouths of The National Union of Mineworkers (NUM). However, according to Dr Mark Bussin, exco member of the South African Reward Association (SARA), there are always two sides to a story.

The trade unions are facing members on a daily basis regarding how tough it is to come out on one’s salary. “I think it is the next big wave to hit us – in work poverty (IWP). It affects more than half our workforce. People are struggling to come out on their salaries and they don’t understand what executives do to earn their millions. It causes resentment and anger amongst workers and creates a platform for radical elements, radical political parties and radical politicians,” says Dr Bussin.

On the other hand, executives are under continual scrutiny, pressure, risk and forever increasing fiduciary responsibility. It is governance and onerous fiduciary duties that drives executive pay up and up. In Eskom’s case, they do run their business as a business should be run. However, with political interference setting unrealistic political goals and targets, it can put Eskom into the red. This is not entirely the Executive’s fault. Their original budget showed a profit, but the politicians, for example, instructed the electrification of several voter areas and they made a loss – not exactly their fault.

“However, as right as the bonuses seem to the Eskom executives, there is a new word that I have coined called – the “optics” of remuneration. With rotating executives, blackouts, Medupi and general negative press – the optics don’t seem right to earn millions in bonus. This calls for wisdom and sensitivity on the part of Eskom executives. Accepting the millions is contentious and should be declined. Regardless of how lawful or technically correct the bonus calculation is. The optics aren’t right.”

ENDS
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MEDIA CONTACT: Cathlen Fourie, 012 644 2833, [email protected], 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 ​

Managing employee performance remains a key element of ensuring that businesses remain competitive by executing their strategies better and more efficiently. Performance improvement cannot be achieved through traditional performance management approaches that focus primarily on employee assessments. For this reason top organisations are improving their practices.
 
“In order to bring your organisation’s performance management up to date, the setting of clear performance objectives at the right levels of stretch, followed by more regular, real-time and forward looking conversations on performance between managers and employees is key,” says Lindiwe Sebesho, President of the South African Reward Association (SARA).
 
The right level of stretch
“This is the level of performance that encourages employees to do more than what is normally expected so that they can improve or sustain desired performance outcomes,” Sebesho explains. “It is important that performance objectives are defined in very specific terms.”
 
Various guides are available to help organisations, managers and employees define stretch objectives including the widely used CSMART approach. This approach refers to defining objectives that are challenging, specific, measureable, achievable, and realistic and time bound.
 
Real-time conversations
Sebesho advises that organisations should endeavour to create an environment where great conversations about the business are the norm and people are generally encouraged and feel it is safe to participate in them. “Performance focused conversations should be held whenever support is required to make progress or when progress has been made.  It is especially important to ensure that issues that impact on performance are addressed quickly,” says Sebesho.
 
Keep it regular
Traditional performance management approaches advocate set intervals, however, whilst this may work for some environments, it does not work in others. Sebesho agrees: “Flexible approaches are often necessary to cater for any event that may impact on an employee’s understanding of what they need to focus on and get the support they need to deliver great results.”
 
Using a Reward Specialist
Where organisations are aiming at improving their performance management practices, Sebesho advises the use of a Reward Specialist. “Reward Specialists generally ensure that their organisation’s total reward strategies and policies are formulated and implemented in a way that rewards people fairly and consistently in line with the value of their skills, knowledge and experience,” she says. “They particularly have to ensure that performance based rewards encourage employees to maximise their performance.”
 
Bonus plans, incentive schemes or stock options must fairly reward employees for achieving stretch performance objectives and contributing optimally to the success of the organisation. 
 
“As performance is a key decision factor for such schemes, a Reward Specialist has to ensure that their organisation’s performance management practices are effective and are therefore a sound basis on which to make performance based reward decisions. It is also important that they ensure that such schemes are motivational and speak to the needs and desires of the employees.”
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ENDS
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MEDIA CONTACT: Cathlen Fourie, 012 644 2833, [email protected], 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