Abstract
Background: The performance management system (PMS) allows employees and employers to clearly state the objectives and ways through which those objectives must be accomplished in an organisation. Against this background, this study investigated the challenges facing PMS at Buffalo City Metropolitan Municipality (BCMM).
Aim: This study examined performance management and organisational success in local government administration in South Africa.
Setting: The study was conducted in the BCMM, located in the central business district of the Eastern Cape province in South Africa.
Method: In-depth face-to-face interviews were conducted with a sample of 20 participants from BCMM. The participants were selected using the purposive sampling technique. The target population of the study was the employees of BCMM.
Results: Based on the analysis of data, the study found that the municipality did not have an electronic system; they were using a manual system in their performance management. Furthermore, the participants also highlighted that there was no approved PMS policy framework that had been endorsed by the council of the municipality.
Conclusion: This study recommended that the municipality must have an approved PMS policy framework, and it should be implemented at all levels of employment within the organisation.
Keywords: performance management; employees; municipality; auditor general; local government.
Introduction
According to Gautan (2016), historically:
[T]he concept of performance management was used only to determine the wages and salaries of employees. In addition, organizations used performance management to shape the behaviours of employees so that specific outcomes could be achieved. (p. 4)
Nevertheless, as Jain and Gautam (2016:3) would argue, ‘such a rewards-driven approach to performance management is not sustainable for most organisations. Moreover, traditional organisations have also started becoming knowledge-intensive for technology-intensive manufacturing processes’. Without doubt, over the years, management science has experienced a great transformation in approaches to performance management systems (PMS) across the world (Toppo & Prusty 2012). This reality is equally true of the South African public service space, which has transformed dramatically since the 1990s with the fall of the apartheid regime.
Before 1994, South African local government administration was governed by the apartheid government, which was characterised by an authoritarian political culture based on white supremacy. This regime encouraged state repression of black people (Leander 2015). After 1994, South Africa became a democratic country and introduced pieces of legislations applicable to local government, such as the Municipal Systems Act (No. 32 of 2000), which requires a municipality to establish a PMS that promotes a culture of performance evaluation among its departments and its administration generally (Bam 2013; Hermanus 2012; Magqogqo 2016). However, Toppo et al. (2012:1) argue that ‘many people think that performance management is a new name given to the well-established term performance appraisal and that there is no difference between the two’. For this reason, most organisations prefer to refer to their systems as PMS rather than performance appraisal systems.
Evans (2004) avers that performance management is a system designed to identify ways to achieve organisational goals through constant assessment and feedback, leading to improvement in employee performance. Also, Dessler (2008:1) stresses that ‘performance management means evaluating an employee’s current and past performance relative to his or her performance standards’.
This article therefore seeks to analyse performance management and organisational success in local government administration in South Africa by using the case of Buffalo City Metropolitan Municipality (BCMM) as the context for the study. The BCMM is located on the east coast of the Eastern Cape province in South Africa. The Eastern Cape province is located on the east coast of South Africa and is the second-largest province in South Africa.
Problem statement
The National Municipal Audit Report for the 2016–2017 financial year has revealed that the trend of improvements in irregular expenditure in the past few years did not continue in municipalities. However, challenges such as issuing of tenders without following procurement procedures continue to occur. In other words, the overall audit outcomes of the 257 municipalities in South Africa have regressed. This was revealed by the auditor-general when he released the audit outcomes in 2017. The audit findings show that there has been no positive change towards credible results for municipalities across the country over the past 5 years. The report also found that seven municipalities in the Eastern Cape did not perform very well (AG 2017).
The BCMM was in the eighth position, with R584 million in irregular expenditure in areas such as internal road projects which were not subjected to competitive bidding, as well as expenditure related to building a community hall at the Nompumelelo location in BCMM. Similarly, Mahlala (2014) conducted a study on ‘assessing the implementation of PMS at the Department of Human Settlement in the Eastern Cape Province’, and in the study, he observed that the department received a qualified audit opinion in respect of the financial year 2014–2015. However, some of the findings include the filling of senior positions with inexperienced staff members, which hurts performance management.
Studies indicate that employees are not well informed about the importance of PMS, and as a result, they do it for compliance purposes (Dlelaphantsi 2016; Hermanus 2012; Kwame 2012; Magqogqo 2016; Mahlala 2014; Dowling 2007; Loveridge 2011; Munzhedzi 2011). In this study, the researchers will perform an analysis of the PMS and its policies to identify the extent to which they contribute to organisational success at BCMM. Poor performance can be ascribed to the lack of understanding of the basics of performance management, which compounds its implementation. To successfully address these concerns raised by audited reports, this research article will focus on understanding how the PMS of BCMM contributes to its organisational success and improved productivity. It is important to veer into organisational productivity in municipalities against the backdrop of regular complaints of poor service delivery in much of the municipalities in South Africa but especially in the Eastern Cape province.
Objectives of the study
This study is concerned with the following objectives:
- to explore how municipal workers at BCMM perceive the PMS of the municipality
- to understand the challenges facing the PMS in BCMM
- to explore ways of improving organisational efficiency at the municipal level in South Africa through the effective leveraging of PMS.
Performance management systems: An overview
Different scholars globally argue that PMS has both positive and negative aspects in an organisation (Baird & Herbert 2012; Dwomo-Fokuo et al. 2014; Kalowamfumbi & Fryer 2009; Mahlala 2014). As observed by Boakye (2014), supervisors spend long periods of time evaluating the performances of the employees. Central to this contestation by Boakye (2014) is an assertion by Hervie, Illés and Dunay (2021:5), who argued that if the organisation consists of a huge number of employees, the process of PMS becomes hectic. On the other hand, Frimpong et al. (2014) worry that now and then the experience of PMS is stressful. In the same vein, Mahlala (2014) suggests that the PMS becomes an obstacle to the employees if managers overlooked their achievements. Moreover, performance management should be a process of positive support, encouragement and celebration of the victories (Atkinson 2012; Boadu et al. 2014; Kumar & Sahoo 2012).
On the other hand, the employees might be unsatisfied if they are working under a faulty PMS and where wrong means are undertaken to flourish (Dunay 2014). According to Hervie et al. (2014), PMS is mostly considered to be unbiased; if underperforming employees accomplish more success than the real hardworking ones, the individuals will get disappointed and lose their trust in the organisation. Experts, for example, Mahlala (2014), submit that the employee feels that if his or her errors are overemphasised and his attainments are ignored, then such an employee will lose the encouragement to work hard and progress (Brewis 2014; Hermanus 2012; Javu 2012; Mahlala 2014). Meanwhile, Sahoo and Mishra (2012) are of the view that too much praise and celebrating for achievements will also make the employees arrogant.
Essentially, the effectiveness of PMS is useful for both companies and employees (Sahoo & Mishra 2012). Concurring with this argument, Boakye et al. (2014) assert that the bonuses given by the organisations to successful employees work as effective motivations to encourage the employees to perform better. The authors further stated that the employees will correlate their remunerations with the appreciation of the company for their hard work. Similarly, researchers, for instance, Fryer and Ogden (2009), contend that along with words of encouragement from the employers, financial incentives motivate the employees to perform better.
In some European countries, the PMS is well established. For instance, in Belgium, Decramer, Smolders and Vanderstraeten (2013) posit that a comprehensive approach to PMS brings better results in an organisation. In addition, the study found that PMS allows managers to see when employees go above and beyond what is expected of them. Also, a PMS helps them to track progress against goals and personal developments and make informed decisions about additional compensation, such as pay rises or bonuses. Available data on poor performance management within the public sector in South Africa reveal that challenges that resulted in the failure of PMS included poor communication, lack of understanding of the PMS by the employees and lack of knowledge with regard to the integration of the performance management and development system (Javu 2012). While there is abundant literature on PMS in private and public sectors in South Africa, not many studies have been carried out on municipal and provincial governments (Menemene 2015), hence the need to examine this missing flank in public sector analysis of the intersection between performance management and organisational productivity in municipalities.
A study conducted by Hervie et al. (2021) examined ‘the importance of PMS practices in hotels in the greater Accra Region of Ghana’. The study found that 30% of the sampled hotels have proper PMS and are achieving their expected results. On the contrary, Boakye (2014) argues that many of the respondents in the hospital industry in Ashanti region of Ghana indicated that they did not fully understand the importance of PMS. In a study conducted by Tyokwe and Naicker (2021) at a South African public hospital in Cape Town, it was discovered that PMS allowed superiors to identify a lack of expertise in an organisation. In another South African context, Ndevu and Muller (2018) conducted a study at Joe Gqabi District Municipality (JGDM), Eastern Cape province. The study revealed that the PMS of JGDM was not transparent and was not communicated to all stakeholders in the municipality. This emphasises the significance of this study. Essentially, according to the drafted PMS policy framework of BCMM (2018), employees are entitled to a 13 cheque (annual bonus), which is equivalent to their monthly salary and is payable on the month preceding their anniversary month. On the other hand, they receive an annual salary increment, which depends on the resolution or outcomes of the collective bargaining council by trade unions and the South African Local Government Association (SALGA) within the municipality. However, these benefits are expected for all employees, irrespective of whether they performed well.
Theoretical framework: Theory of change
The study uses the theory of change. Stachowiak (2010), asserts that ‘Theory of Change has a strong root in several disciplines, including environmental and organisational psychology but has also increasingly been connected to sociology and political science’. On the other hand, Davies (2012) argues that:
Theory of change starts from a baseline analysis of the context and issues. It then draws out the logical order of changes that are foreseen as being necessary between stakeholders and in the contextual situations to support the desired long-term change.
In this study, the theory of change will be used to examine the extent to which the PMS in the BCMM contributes to the improvement of organisational success and also to understand the challenges facing the PMS in BCMM. This theory is essential to this research in the following ways: (1) Workers can identify the causes of poor performance and ways to improve the PMS of the municipality. (2) The top management of BCMM has the likelihood to come up with amicable solutions to improve and strengthen the PMS of BCMM. In the South African context, the theory of change could shed light on local government administrators on how they could formulate the policy framework and strategic approach that enables the municipality to manage the PMS effectively and efficiently.
Research method
This study employed a qualitative research approach, and it utilised in-depth face-to-face interviews that were conducted with a sample of 20 participants from BCMM who were selected using the purposive sampling technique. Data collected were analysed thematically. A qualitative research design was chosen because of the need to understand the subtle narratives and discourses about the intersection between PMS and productivity at BCMM.
Ethical considerations
Ethical clearance to conduct this study was obtained from the University of Fort Hare Research Ethics Committee (reference number: REC-270710-028-RA).
Findings of the study
As stated earlier, the qualitative research method was utilised in this study as it is important to address and bring to the surface the personal views of participants selected for this study. Their views represent their personal experiences regarding the PMS, its challenges and prospects at BCMM. The findings of this study are presented as follows.
Staff perceptions of performance management system in Buffalo City Metropolitan Municipality
Most of the participants did not understand and were not aware of the PMS of BCMM. Only a few of the employees indicated that they understood the PMS of BCMM. Moreover, the participants perceived performance management as a system that does not reward or incentivise employees. Also, the employees of BCMM criticised the PMS of the municipality, and they indicated that it does not support junior staff but that it is only useful to management. The following narrative captures the feelings and views of the given statement.
One of the interviewed participants observed that:
‘We are just filling performance agreement papers for compliance purposes; otherwise, this thing is not helpful to me.’ (Participant 1, Female, 48 years old)
Another employee expressed that:
‘I have been working for BCMM for more than 5 years, but I’ve never filled any performance agreement forms. I only heard about PMS when they were conducting road shows and gave us T-shirts.’ (Participant 2, Male, 27 years old)
A participant stated that:
‘I only filled performance agreement once ever since I joined BCMM, and this thing does not even give us money; you just fill in the papers for sweet nothing.’ (Participant 3, Female, 29 years old)
However, the interviewed manager observed that:
‘Employees do not take PMS seriously. They do it for compliance purposes; hence, it seems that system is not effective and efficient to the organisational success of the municipality.’ (participant 4, Male, 35 years old)
Another manager interviewed in a different department stated that:
‘The PMS is not cascaded down to all levels of employment, meaning not all employees understand the performance management system of the municipality. This is what we are trying to rectify.’ (Participant 5, Female, 40 years old)
In his view, a senior manager noticed that:
‘Employees are well informed about the performance management system, but they don’t take it seriously; some are complaining that this system is not useful, as it does not provide performance bonuses. Other employees are of the view that they are filling papers for nothing.’ (Participant 6, Female, 40 years old)
The main derivative from these narratives is that a lack of understanding of the importance of PMS, and how it impacts organisational productivity, was common among participants interviewed for this study. The implication is that workers do not take it seriously; hence, it is doubtful that the exercise created an impact on their work.
The challenges facing performance management system at Buffalo City Metropolitan Municipality
The majority of participants highlighted that no approved PMS policy framework had been endorsed by the council of the municipality. Also, the municipality did not have an electronic system; they were using a manual system. On the other hand, some participants were of the view that the PMS did not reward or incentivise employees who performed very well, and the BCMM has several senior positions that were currently vacant and had people performing the duties of these positions in an acting capacity. As such, no one takes full responsibility in such positions. Lastly, the respondents also showed that employees of BCMM fail to meet their targets and the objectives of the municipality. It was also revealed that participants perceived the PMS of the municipality in various ways. For instance, the following narratives capture the views and feelings of participants about the challenges facing PMS of BCMM.
The first participant stated that:
‘There is lack of cooperation here at BCMM, and another challenge is that BCMM has a lot of vacant senior positions in which people are acting for some months, and instead of permanently filling those positions, [the] municipal manager appoints another person to act for another couple of months.’ (Participant 7, Male, 51 years old)
The respondents stated further that they have a manual system, while there was a need for an electronic integrated system because documents can be lost. The participants shared further that the municipality did not have a PMS policy framework that was approved by the council of the municipality.
A middle-level staff in one of the departments stated that:
‘More than 4 departments out of 13 departments had no heads of department [HoDs] for several years. People did not take full responsibility; they did not take full ownership of the position they occupied.’ (Participant 8, Male, 50 years old)
Another participant with a different take on the prevailing issues stated that:
‘There were challenges with organisational culture in a broad context in management. There was a need to address organisational culture in a more specific context in terms of organisational performance management efforts. The participants stated that there was a need to review the performance management framework, which should give specific guidelines. This framework should give the entire spectrum on how to deal with performance management. Also, the issue of reporting: performance management reporting, what happened after reporting, was the report good or bad? That was all part of consequence management, which was important to consider.’ (Participant 9, Female, 47 years old)
From the preceding analysis, the challenges confronting PMS at BCMM are numerous. They include a lack of clear understanding of what PMS is, vacancies in different positions and the lack of a PMS framework for the municipality, among others. In other words, there is a fundamental lack of understanding of the critical importance of PMS and how it correlates with organisational performance. This fundamental problem has created a vacuum in both the design and implementation of result-oriented PMS.
Discussion of the key findings
This study revealed that many employees at Buffalo City Metropolitan Municipality failed to meet their targets and the objectives of the municipality. This was caused by the poor PMS of the municipality. This finding was not supported by many scholars, who were of the view that effective PMS helps to encourage staff by ensuring that individuals are aware of their targets and goals and how these contributed to the organisation to achieve its objectives as well as its vision (Atkinson 2012; Baird & Herbert 2012; Kumar & Sahoo 2012). Furthermore, scholars argue that a successful PMS ensures that work performed by employees accomplishes the goals and mission of the organisation and that employees have a clear understanding of what is expected of them (Atkinson 2012; Baird & Herbert 2012; Kumar & Sahoo 2012).
In addition, this study found that the PMS of BCMM was not communicated to all levels of employment within the municipality. Moreover, many respondents complained frequently about the lack of cooperation as one of the biggest challenges facing the PMS of the municipality. Wayessa (2015) conducted a study at the Central University of Technology in Bloemfontein, South Africa. The author argues that the staff members of the Central University of Technology were not adequately trained to understand how the PMS worked before it was rolled out. In other words, the university did not set up the capacity needed to make PMS succeed in the first place. This was one of the biggest challenges facing the effectiveness of the PMS at the university. Also, these observations are supported by a study conducted by Sahoo et al. (2012), whose findings made similar conclusions, emphasising how a lack of training in PMS in an organisation sabotages the very essence behind the exercise.
A majority of the participants in this study have stated that the municipality did not have an approved PMS policy framework. Moreover, several participants complained frequently about the issues facing PMS in the municipality, which included the absence of an electronic system and a lack of an operating manual. This correlates with the finding of Kalowamfumbi (2013), who noted that the challenges facing PMS include a lack of understanding of the term ‘performance management’, design challenges and inadequate consultation with workers before implementation. Kalowamfumbi (2013) also identified a lack of linkage between rewards and performance, a lack of leadership and management commitment, a lack of clear legislation on PMS and inadequate financial resources and bottlenecks towards smooth implementation of PMS.
Finally, this study highlighted that the majority of the participants had a major concern about BCMM having several vacant senior positions where the tasks for these positions were performed by people who were acting in such positions. As a result, no one took full responsibility. This finding is supported by a study conducted by Mahlala (2014). He found that some of the issues, including ‘the filling of senior positions with inexperienced staff members had a negative impact on performance management in the Department of Human Settlement in the province of the Eastern Cape’ (Mahlala 2014).
Importantly, the findings of this study were in line with the theoretical framework adopted in this study. This study employed the ‘theory of change’. With regard to the PMS of BCMM, there is a lot that needs to be changed as most employees did not understand the current PMS of the municipality. Moreover, the system is not cascaded down to all levels of employment; it is only communicated at managerial levels. This finding aligns with studies conducted by Dlelaphantsi (2016), Magqogqo (2016), Mahlala (2014) and Hermanus (2012), where they found that there were times where employees were not well educated or oriented about the importance of a PMS. As a result, they did it only for compliance purposes. They were not innately motivated to do it but had to comply with the instruction. This finding is also supported by the theoretical framework adopted in this study. According to the theory of change, to successfully transform an organisation, one must classify the causes of developmental challenges and understand how they influence each other (Funnel & Rogers 2011). In addition, the employees can work better in an organisation with an actual goal that is achievable if they can be motivated.
General recommendations
From the findings obtained through the study, the following are some of the general recommendations:
- Educate the employees of BCMM and make them realise the importance of PMS in the municipality. This can be performed through awareness campaigns and workshops that should be conducted within the municipality.
- The BCMM must have an approved PMS policy framework by the council and it should be implemented at all levels of employment within the organisation.
- The BCMM must provide rewards or incentives to employees who perform very well. This can be done through employee performance measures or reviews by using self-evaluations, graphic rating scales and checklists by the management.
- The PMS of BCMM must communicate a clear goal, objectives and targets of the municipality. This should be carried out by notifying all employees in various departments of BCMM via e-mails and other forms of notices.
- The PMS must be communicated at all levels of employment, for example, starting from junior staff to the HODs.
- Buffalo City Metropolitan Municipality must introduce an electronic system to strengthen record-keeping and reduce the likelihood of the information getting lost. This can be performed by doing benchmarking to other municipalities or organisations that are using electronic systems.
- Managers should ensure that all employees comply with the PMS policy framework. This can be carried out through a quarterly performance review, which should be conducted for each employee in the municipality. This will have a positive impact and enable the municipality to identify performing and nonperforming employees.
- The PMS of BCMM must align organisational and individual goals.
- Foster municipality-wide commitment to a performance-oriented culture.
- Buffalo City Metropolitan Municipality must develop and manage the human resources needed to achieve organisational results.
Acknowledgements
The authors would like to acknowledge respondents who participated in this research article, particularly Buffalo City Metropolitan Municipality employees for taking their time to participate in this article.
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
M.N. conducted the entire study and acted as the corresponding author. I.U. supervised the study and edited the article.
Funding information
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
Data availability
Supporting data are available from the corresponding author on request.
Disclaimer
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.
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