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Gj Davids & Sl Pa A PROPOSED PERFORMANCE MANAGEMENT SYSTEM FOR THE GREATER STELLENBOSCH MUNICIPALITY. DEFJANSEN SUPERVISORS: GJ DAVIDS & SL PAULSEN DISSERTATION SUBl\UTTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF THE MAGISTER TECHNOLOGAE DEGREE PUBLIC MANAGEMENT Ai~D LAW TO THE FACULTY OF BUSINESS AT PENINSULA TECHNIKON 30 SEPTEMBER 2003 ABSTRACT This dissertation sets out to develop a Performance Management System for the Greater Stellenbosch Municipality. It is proposed for use as a unit of analysis. The system provides a framework for determining developmental priorities and identifying the appropriate resources. The system monitors progress and simultaneously serves as an instrument that maintains municipal accountability for the delivery of its core developmental functions. Intemationall)(, an infInite number of research projects in the fIeld of performance management and best practices for organisational performance have been undertaken for local authorities. This includes a range ofterms extending from the 1950's, known as benchmarking, to the current context where the balance scorecard has been put ori the performance agenda. The emphasis for increased and accountable performance of local authorities is currently on the foreground, because local authorities are now responsible for executing duties in the form ofdevelopmental outputs. This responsibility found its framework in a range of legislative obligations as found ill: • Sections 152 and 153 of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996), outlining the objects and developmental duties of municipalities; • Section 73 ofthe Municipal Systems Act, 2000 (Act 32 of2000) that outlines the general duties ofmunicipalities in relation to service delivery; • Chapters 4 and 6 of the Municipal Systems Act, 2000 (Act 32 of 2000) outlining, respectively, community participation and performance management procedures and systems, and • Schedules 4 and 5 parts B of the Constitution ofthe Republic ofSouth Africa, 1996 (Act 108 of 1996) and Section 84 of the Municipal Structures Amendments Act (Act 33 of 2000) that outlines the service portfolio of municipalities on which service standards should be developed. This dissertation attempts to develop a proposed Performance Management System (PMS) for the Greater Stellenbosch Municipality, as one of the tools to ensure developmental outputs, by providing a background that led to the implementation of PMS in South African local authorities. For this particular research, the case methodology was the most appropriate tool of research used. Greater Stellenbosch Municipality as the unit of analysis was researched and using related research on this particular phenomenon to guide the development ofsuch a system. The dissertation further aimss to substantiate why Stellenbosch Municipality should have the intention of creating a fully integrated system of managing for developmental results. This is facilitated whereby departmental plans. budgets, operating plans, and team and individual performance reviews are all linked by common, measurable goals, and performance indicators are used at all levels that align with those goals. A number of findings of this research have indicated that performance measures are used to monitor strategic initiatives, to guide the budget process and allocate resources to produce specific strategic results in order to see a clear organisational consciousness for accountability. This research has proved that measurement can promote government and community activism and achievement. lt has also been found from international case studies that the quality of performance measures is critical in establishing the credibility of measurement processes. This is supported by the fact that performance measures should bring about changes in staff behaviours, changes in organisational culture, cost savings and service performance improvements. The conclusion was made that performance measures (indicators) should be clear, comprehensible, understandable, results-orientated, useful and valid, verifiable and accurate. ii DEFINITION OF CONCEPTS Performance Management System (PMS) - Describes and represents the process of performance planning, monitoring, measurement, review and reporting of a municipality; organization, management, and the contribution of relevant role-players. Objectives - The general outcomes to be achieved through actions or activities. Performance measurement - Involves determining the extent to which objectives are achieved through developing indicators and linking them to targets and related standards. Impact' - Refers to the changes and consequences that result from specific activities or achievements; both intended and unintended, assessed in terms ofthe contribution made to the achievement ofa general goal. Outcomes - The impact ofservices delivered, describing what changed as a result ofeffort. Measuring outcomes is generally recognized as difficult. Inputs - The costs and resources used to provide the services. Outputs - The goods and services provided. Monitoring -To monitor progress towards achieving the objectives. Performance indicators - Yardstick used to assess achievement of results; both quantitative and qualitative aspects. Qualitative and quantitative measures - Quantitative measures indicate "how much" or "how many"; qualitative measures indicate "how well". IDP - Integrated Development Planning: a developmental planning tool to assist local authorities to fulfill the developmental role they need to play. Balance Scorecard - an aid in creating a "balance" among various development factors to be considered when the focus is on outcome performance. Hi ACKNOWLEDGEl\IENT I, David Elmar Frederick Jansen, hereby declare that the content of this dissertation represents my own work and that the opinions contain herein are my own and not necessarily those of Peninsula Technikon. Firstly, I wish to thank our Heavenly Father for guidance, strength, perseverance and faith, whicr I was blessed with throughout my academic years at Peninsula Technikon. A special gesture of gratitude to my sister Jonabelle for her support in every way she could. My friends in Mossel Bay, Gary Brandt and Arthur Meyer, who has assisted me tremendously through times of struggle; Amanda van Niekerk and Lynn Boezak for the faith they have always displayed in me; Andre Olivier for his in-depth contribution towards completion of this dissertation; the staff at Stellenbosch Municipality for their participation in this research. A special thanks to my supervisors, Gregory Davids and S Paulsen, for their commitment towards this project and to Ms Daphne Morrison for her administrative contribution. TABLE OF CONTE1'HS Page Abstract (i) DefInition of concepts (iii) Acknowledgement Chapter 1: Research Design and Methodology 1 1.1 Introduction 1 1.2 Background 1 1.3 Problem Statement 3 1.4 Research Proposition 4 1.5 Research Objectives 4 1.6 Related Research 4 1.7 Research Methodology 11 1.8 Significance of the Study 12 Chapter 2: International Case Studies of Local Authorities Applying Performance Management Systems 13 2.1 Introduction 13 2.2 Background to International Reference 14 2.3 Measurement Models Supporting Evaluation of the Results 16 2.4 Performance Measurement Quality Criteria 20 2.5 Preliminary Conclusion 22 2.6 Performance Measurement Experiences of Illinois and Arizona 25 2.7 Conclusion 34 Chapter 3: The Introduction of Performance Management within Local Authorities in South Africa 36 3.1 Introduction 36 3.2 Recognition of Local Government 37 3.3 Transforming Local Government 38 3.4 Entrenching Developmental Local Government 42 3.5 Responding to Service Delivery and Other Challenges 48 3.6 Conclusion 51 Chapter 4: Integrated Development Planning and Performance Management 52 4.1 Introduction 52 4.2 What is Integrated Development Planning? 53 4.3 Legislative Framework 61 4.4 Performance Management in Local Government 63 4.5 The Policy and Legislative Context 66 4.6 Practical Implementation of the Legislation 68 4.7 Why Measuring Performance? 69 4.8 Structuring of a Performance Management System 70 4.9 Conclusion 78 Chapter 5: Analysis of Stellenbosch's Community Profile and its Integrated Development Plan 80 5.1 Introduction 80 5.2 Community Demographics of Greater Stellenbosch Municipality 81 5.3 Analysis of the 2002-2006 Integrated Development Plan of Greater Stellenbosch Municipality 88 5.4 Conclusion 105 Chapter 6: Proposed framework of a Performance Management System for Greater Stellenbosch Municipality 107 6.1 Introduction 107 6.2 Guidelines derived from data ofprevious Chapters 107 6.3 Results from Interview Survey 113 6.4 A Proposed Framework for a Performance Management System for Greater Stellenbosch Municipality 122 6.5 Conclusion 131 Bibliography 132 Annexurel: Framework for the proposed PMS 141 Annexure 2: Unstructured Interview Questionnaire 1 142 Annexure 3: Unstructured Interview Questionnaire 2 144 Annexure 4: Unstructured Interview Questionnaire 3 145 Annexure 5: Key Performance Indicators as extracted from the IDP of Greater Stellenbosch Municipality 146 Annexure 6: Example of a Monthly Report used within the Greater Stellenbosch MunicpaIity . 150 List of Figures and Tables Figure 1: Traditional Input-Output Model 6 Figure 2: Primary Performance Indicators 9 Figure 3: Linking Programs to Benchmarks Through Key Results in Mulmomah County 16 Figure 4: Data Used in Mulmomah County, Oregan 17 Figure 5: Results-Orientated Government: Prince WilIiam County, VA 19 Figure 6: IDP Structures in
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