CONSULTATIVE REPORT ON THE APPOINTMENT AND MANAGEMENT OF HEADS OF DEPARTMENT IN THE PUBLIC SERVICE

1. CONSULTATIVE REPORT ON THE APPOINTMENT AND MANAGEMENT OF HEADS OF DEPARTMENT IN THE PUBLIC SERVICE PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION 23 May 2012

2. OUTLINE OF THE PRESENTATION • INTRODUCTION • METHODOLOGY • AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS • RECOMMENDATIONS • CONCLUSION 22

3. INTRODUCTION • The Public Service Commission (PSC) has observed through its work over the last thirteen years that the manner in which Heads of Department (HoDs) are recruited, appointed and managed requires a rethink. • Key challenges in this area include the fact that the appointment process does not always result in the selection of the best candidates for the job, and the short term nature of the employment contracts tends to encourage a high level of mobility among HoDs. • In addition, the performance management and development process is applied with worrying levels of inconsistency, with some HoDs not being evaluated at all while others only get evaluated after the end of the financial year primarily to inform decisions about financial performance incentives. • Given these observations that emanated in the course of carrying out its oversight work, the PSC decided to undertake a comparative study on the appointment and management of HoDs in the Public Service. 33

4. INTRODUCTION (CONT) • This report draws on all the relevant key findings the PSC has made over the years and builds on these using the comparative study that was completed during the course of the 2008/9 financial year. The report, therefore, effectively constitutes a logical sequel in a series of oversight studies that the PSC has been conducting in this area. • The purpose of the report is two-fold: • Firstly, it provides an evaluative overview of the current arrangements for the appointment and management of HoDs; and • Secondly, the report identifies options and makes recommendations to strengthen these arrangements. 44

5. METHODOLOGY • The methodology adopted included the following: • Study tours to the United Kingdom and Republic of Kenya. The purpose of the study tours was to learn more about the systems and processes followed by these countries in the appointment and management of their HoDs. • A series of meetings were initiated with the foreign embassies of Denmark, France and Sweden, and delegations from the Federal Civil Service Commission of Nigeria and the German Agency for Technical Co-operation (GTZ). The purpose of these meetings was to augment the information gathered during the study tours. • A desk-top study of literature was conducted and it focused, among others, on the relevant reports produced previously by the PSC in this area. 55

6. METHODOLOGY (CONT) • A survey questionnaire was developed and distributed to heads of national and provincial departments in the Public Service. The purpose of the questionnaire was to obtain the views of HoDs on whether the current framework is effective and how this framework could be improved. • An analysis of all the data collated from the above processes was undertaken. • This presentation has been strengthened by highlighting the recommendations in this report which are being supported by recommendations made by the National Planning Commission (NPC) and by providing the most recent statistical data to reinforce trends. 66

7. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HoDS • Recruitment and Selection: • The South African Public Service follows a policy of open competition for the filling of the vacant posts of HoDs. • The selection panel is constituted by a minimum of three Executive Authorities (EAs). • A selection panel is expected to make a recommendation of the most suitable person for approval by the national or provincial Cabinet. • The challenge with the current process is that it does not always lead to the appointment of the best candidate who meets all necessary requirements. • The trend in countries such as the UK, Canada, Republic of Kenya and Nigeria is that provisions have been made for the appointment of the Heads of the Public Service within their systems. • Heads of the Public Service are responsible for managing the effective functioning of the Public Service and, often with the assistance of their local Civil Service Commission, also facilitate the process of recruiting and selecting HoDs. 77

8. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Employment Contracting and Security of Tenure • There were variations in the duration of the initial contract given to HoDs. The SMS Handbook states the duration of the contract should be a period not exceeding five years. In practice, a five year contract term was used while in most cases, a three year contract term was offered. • The majority of HoDs surveyed by the PSC felt that a three year contract term was too short and not sufficient for impact to be made. The overall contract system itself was not seen as a problem, but there was anxiety regarding future employment and security of tenure. • This was a compelling consideration as in the first year of appointment, an HoD may spend a few months settling in their job (even if they were promoted from within the ranks), and during the third year of their contract, they would be worried about their future job prospects, leaving less time to meaningfully impact on the planning and implementation processes in their departments. • The PSC recommended that the three-year term be reviewed, and Cabinet has since endorsed this recommendation. 88

9. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Employment Contracting and Security of Tenure (Cont) • In the UK, HoDs are not employed on a contract basis. The same applies in the Republic of Kenya, although HoDs recruited from outside the Public Service are put on contract. • In Sweden, a three-year contract system is used, although HoDs are normally retained within the system until they decide to retire. • Ultimately, the important issue may not necessarily be whether to use a contract system or not, but rather how such a system is managed to ensure that incumbents have enough time to make a meaningful difference in their departments and that the non-renewal or termination of contracts is done in an accountable manner. 99

10. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Performance Management and Development System • Cabinet’s decision of 2002 mandated the PSC to facilitate the performance evaluation of HoDs in the Public Service. • This involvement of the PSC in facilitating the evaluation process highlighted certain critical challenges with the current HoD evaluation system, which must be addressed in order to strengthen the evaluation process and its impact. These challenges include the: • Tendency for the performance agreements of HoDs to be concluded late (sometimes even long after the financial year has ended); • Performance of HoDs not being evaluated; and • Performance evaluations being conducted only at the end of the financial year primarily for purposes of awarding financial performance incentives. 1010

11. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Performance Management and Development System • Percentage of HoD Evaluations conducted 1111

12. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Performance Management and Development System • Filing of PAs by the due date. 1212

13. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Performance Management and Development System (Cont) • In the UK, the evaluation of the performance of HoDs is the responsibility of the Head of the Civil Service, often assisted in this process by Her Majesty’s Treasury and the Foreign and Commonwealth Office. • A Remuneration Committee comprising role players such as individuals from the public and private sectors advise the Prime Minister on the rewards payable to HoDs. • The Republic of Kenya also uses a system involving external role players. There is a Performance Contracts Steering Committee (PCSC) which drives the implementation of performance contracts. • The PCSC is assisted by ad hoc Negotiations and Evaluation Task Forces drawn from outside the Public Service (private sector practitioners, retired public servants and academics). • The role of the ad hoc task forces is to negotiate and evaluate performance contracts of HoDs on behalf of the Head of the Public Service. 1313

14. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Training and Development • The provision of training and development plays an important part in the career development of HoDs. • It forms an integral part of the development of HoDs and the creation of new knowledge and skills. • Sixty-five percent (65%) of the HoDs surveyed by the PSC argued that there was not enough provision for opportunities for training and development. • Where such opportunities were available, due to the workload and busy schedules, HoDs could barely manage to utilise them. 1414

15. AN EVALUATIVE OVERVIEW OF THE APPOINTMENT AND MANAGEMENT OF HODS (Cont) • Management of the Executive/Administrative Interface • Tensions at the executive/administrative interface between EAs and HoDs have often created instability in departments which led to an inability by these institutions to deliver on their basic mandates. • As a result, sixty-five percent (65%) of HoDs surveyed by the PSC emphasized the importance of the development of a standardised protocol to manage relationships with the EAs. • These HoDs argued that a standardized protocol to manage relationships would assist in formalizing and standardizing the management of relationships between the EA and the HoD, whilst at the same time improving the system of accountability between the two role-players. 1515

16. RECOMMENDATIONS • The recommendations made in the report were divided into two options: • Option 1: Creating a new system on the Appointment and Management of Career Incidents of HoDs • Option 2: Retaining the existing system with improvements 1616

17. RECOMMENDATIONSOption 1: New System on the Appointment and Management of Career Incidents of HoDs • The Introduction of an Administrative Head of the Public Service • An administrative Head of the Public Service (HPS) is responsible for ensuring effective management of the Public Service including the management of career incidents of HoDs. • The incumbents also perform the functions of Cabinet Secretaries which places them in a position to interact with Ministers on a range of issues including the political-administrative interface. • To implement this system in South Africa, it will be necessary to amend the Public Service Act so as to give effect to this recommendation. • Recruitment and Selection of HoDs • The HPS would be charged with the responsibility of advising the President and Premiers in making recruitment and selection decisions. • In this regard, the administrative Heads of the Public Service could constitute a selection panel involving, among others, EAs, stakeholders representing sectors and other HoDs. 1717

18. RECOMMENDATIONSOption 1: New System on the Management of Career Incidents of HoDs (Cont) • Review of Contract Appointment • The need to review the three-year contract employment term was adopted and has since been reviewed - appointments are now made for five year terms. • A decision regarding the renewal or termination of a contract should be communicated at least six months prior to the expiry of the contract. • Provision of Training and Development • The HPS as a substantive supervisor of HoDs would create enabling conditions for training and development to take place. • This implies that each HoD in consultation with the HPS would need to identify their training and developmental needs and have these stated in their PDPs. 1818

19. RECOMMENDATIONSOption 1: New System on the Management of Career Incidents of HoDs (Cont) • Development of Mediation Mechanism on Roles and Responsibilities • The study showed a need to review the current dispute resolution mechanisms provided for in the PAs of HoDs. • Such a review should make provision for interventions when dealing with the roles and responsibilities of HoDs and EAs, as ambiguity in effectively addressing these matters have led to serious tensions. • Termination of Service • The HPS should advise the President or Premiers on the requirements for the termination of service of HoDs by developing clear guidelines to be followed. • Centralised Performance Evaluation System of HoDs • The PSC piloted and now promotes the system of block/cluster evaluations. • In terms of this system a period is identified wherein all performance evaluations are finalised utilising a single panel which is appointed to deal with the performance evaluations for a specific cluster. 1919

20. RECOMMENDATIONSOption 2: Retaining the Existing System with Improvements • Recruitment and Selection of HoDs • The current arrangements in which the recruitment and selection process of HoDs is delegated to EAs could be retained. • However, there is a need to ensure that the most suitable person is appointed to the post of HoD with due regard to an open and fair process. • Review of Contract Appointment • HoDs should be provided with information indicating whether or not their contract would be renewed at least six months prior to the expiry of the tenure. 2020

21. RECOMMENDATIONSOption 2: Retaining the Existing System with Improvements • Review of Contract Appointment (cont) • The following figures show HOD turn-over over the past three financial years: (Source: PERSAL March 2012) 2121

22. RECOMMENDATIONSOption 2: Retaining the Existing System with Improvements (cont) • In 2008, the PSC published a report titled: “Turn-over rate of Heads of Department and its implications for the Public Service”. • This study revealed 159 instances of change amongst HoDs for the financial years 2003/2004 to 2006/2007. Contract terminations accounted for the highest percentage of turnover incidents, as reflected below: 2222

23. RECOMMENDATIONSOption 2: Retaining the Existing System with Improvements • Provision of Training and Development Opportunities including Succession Planning - There is a need for concerted efforts to be made to ensure that training and development opportunities are created and effectively utilised. • Dispute Resolution - There is a need to ensure that the current dispute resolution mechanism is strengthened. This could be done by developing an interim mediation mechanism driven by the MPSA and/or the Deputy President. • Termination of Service - The DPSA should advise the President and Premiers on due processes to be followed in the termination of services of HoDs as provided for in legislation. 2323

24. RECOMMENDATIONSOption 2: Retaining the Existing System with Improvements (cont) • Centralised Performance Evaluation System for HoDs • For the 2010/2011 financial year, only 1 national HoD has been evaluated, representing a compliance rate of 3% and 11 at Provincial level, representing 22%. • The PSC believes that performance evaluations of HoDs should be finalised by utilising a single panel which is appointed to deal with the performance assessments for a specific cluster. • This will entail that all HoDs in that cluster can be evaluated in one sitting, thus improving the low levels of compliance as shown in slide 11. • The PSC has submitted a draft Cabinet memorandum to the MPSA, requesting for approval and implementation of the above approach in respect of the remaining HoD Evaluations for the 2010/2011 evaluation cycle. (End July is the cut-off date for submission of evaluation documents to the PSC). 2424 24

25. ADDITIONAL RECOMMENDATIONSOption 2: Retaining the Existing System with Improvements (cont) • Tensions between the political and administrative functions at a senior level have not gone un-noticed. Within the status quo a number of interventions can be made to stabilize the political-administrative interface, for example: • A facilitated workshop between ministers and HoDs about demarcating roles and responsibilities and the ground rules for the relationship. • A formal orientation (induction) of the Executive and HoDs in how to effectively run government. • Creating a pool of HoDs for their continued utilization for the benefit of the public service even after conclusion of their contract. 2525

26. RECENT DEVELOPMENTS • The National Planning Commission: • The NPC in its document entitled: National Development Plan – Vision for 2030, makes a number of proposals relevant to this presentation, especially in Chapter 13 which deals with “Building a Capable State”. • Some of these proposals which are supported by the PSC include the following: • The appointment of an administrative Head of the Public Service. • Operational accountability for administrative functions would rest with the Head of the Public Service. • Senior officials should continue to be accountable to their political principals for policy matters. • A hybrid approach to top appointments that allows for the reconciliation of administrative and political priorities. • The demarcation between the powers and responsibilities of political principals and administrative heads needs to be clarified in the South-African context in order to stabilise the political-administrative interface. 2626

27. RECENT DEVELOPMENTS (cont) • The National Planning Commission (cont): • The role of the PSC should be strengthened to make it a robust champion of a meritocratic public service by promoting and monitoring key norms and standards. • Consideration should be given to whether the PSC should play a direct role in the recruitment of the most senior posts. • Greater and more consistent delegation of authority for administrative matters from political principals to their HoDs, and from HoDs to managers. • Greater security of contract should be considered once there is confidence that performance management mechanisms are robust. 2727

28. RECENT DEVELOPMENTS (cont) • The Department of Performance Monitoring and Evaluation: • Obtained approval of Cabinet for the development and application of a management performance assessment tool (MPAT) for assessing the quality of management practices of individual departments. • The MPAT tool has been completed and is currently being applied to national and provincial departments, facilitated by the Department of Performance Monitoring and Evaluation in the Presidency (DPME) and the Offices of the Premier. • The Cabinet approval included agreement that proposals should be developed for the inclusion of the results of the management performance assessments of departments into the performance management system for HoDs. • This essentially kick-started a review process which has culminated in a draft Cabinet memorandum which proposes refinements to the current system. 2828

29. CONCLUSION • The process of managing the career incidents of HoDs is critical in ensuring that the performance of the administrative leaders of the Public Service is effectively managed in line with the relevant legislative frameworks and policies. • An effective system of managing the career incidents of HoDs would allow and provide for an effective Public Service and subsequently, improved service delivery. In order to make the right decisions around this matter, it is imperative that government is informed on the best possible options. • This presentation has highlighted options presently being considered and initiatives proposed to improve the management of career incidents of HoDs. • The PSC notes and commends the decision by Cabinet to extend the employment contact of HoDs from three (3) to five (5) years. The PSC believes that this decision contributes towards a stable and effective Public Service. 2929

30. THANK YOU! 3030