Local Government Performance Management

1. Purpose and background

This study focuses on local government sector of South Africa. “Local government is aptly defined as a sphere of government located within communities and well-placed to appropriately respond to local needs, interests and expectations of communities.”Van der Waldt (2006). Local government could also be described as public organisations authorised to manage and govern the affairs of a given territory or area of jurisdiction (Koma, 2010). South African local government is made up of 272 municipalities, divided into 8 metropolitans, 44 districts and 226 locals.

Organizational performance management is the process that measures the implementation of organization strategies. In local government level, key performance determinants are economic development, governance, and financial viability most importantly service delivery.

Performance management provides the mechanism to measure whether targets and strategic objectives that are set by municipalities and its employees are met. (Performance Management Policy Framework, 2008),one of the problem faced by municipalities according to CoGTA in relation to unmet objectives and employee satisfaction, is poor municipal work environment which is not conducive to attracting and retaining talented professionals. This is due to limited incentives, limited career paths and little scope or encouragement of initiative.

1.1. Introduction

Aligning pay with performance is something every employer seek to achieve so as to get value for value, this is directly connected to equity theory, equity is defined by oxford dictionary as quality of being fair and impartial, Adams' Equity Theory calls for a fair balance to be struck between an employee's hard work, skill level, tolerance, enthusiasm etc, and an employee's outputs (salary, benefits, intangibles such as recognition, etc). According to Stacey Adams (1963), this theory is built-on the belief that employees become de-motivated, both in relation to their job and their employer, if they are aware that their inputs are greater than the outputs.

Employers and employees view of compensation differs, employees consider compensation as a return for services rendered, and also see it as a reflection of their personal worth in terms of skills and abilities, as well as the education and training they have acquired. Whilst employers view it as major expense and as a possible influence on employee attitudes and behaviors through compensation-based motivational strategies (Boachie-Mensah, 2011)

The main focus of this research is whether, pay for performance policy is beneficial in local government and to assess employees’ attitude towards performance related pay? Performance related pay is defined as a system of remuneration in which an individual’s increase