Presentation to the Portfolio Committee on Public Enterprises

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Presentation to the Portfolio Committee on
Public Enterprises The Alexkor Performance
Management Process Presented By Arthur Sika
Yonella Nonyusa 19 March 2010

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The Presentation Content

• Executives Performance Management Process.
• Board Performance Management Process
• Process, Mechanisms and Procedures
• Performance Objectives
• Measurable objectives
• Evaluation of objectives

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The Alexkor Performance Management Process - An
Overview
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The Alexkor Performance Management Process - An
Overview
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The Alexkor Performance Management Process - An
Overview

• The Background
• No Performance Management was in place
• Strategic Planning Vs Strategic Execution The
  Integrated Performance Management Model
• Strategy execution (through Human Capital) is
  critical to strategic success otherwise plans
  will falter or wither on the vine because of poor
  execution, i.e. poorly implemented Performance
  Management System.
• Performance Management is the driving force or
  vehicle through which strategic plans are
  converted into deliverables
• The Overview Of The Current System
• Performance management system for CEO managers
  is place.
• Performance contracts for CEO Manager are in
  place.
• Performance review / appraisal takes place once
  ever 4 months
• Quarterly Performance reviewing is linked to
  rewarding (Perf Based Pay)
• More details in this presentation

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The Alexkor Performance Management Process - An
Overview
At Alexkor we view Performance Management as a
process of establishing a shared understanding of
what is to be achieved and how it is to be
achieved and an approach to managing people that
increases the probability of achieving success.
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The Alexkor Performance Management Process - An
Overview
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The Alexkor Performance Management Process - An
Overview
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The Alexkor Performance Management Process
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Performance Planning / Contracting Phase -

• The Alexkor Shareholders Compact / Corporate
  Objectives were cascaded into the CEOs
  Performance Contract.
• In the process the CEOs immediate subordinates
  input was solicited (the bottom up approach) in
  the drafting of the CEOs contract.
• The CEOs Performance Contract was then cascaded
  into the immediate subordinates Performance
  Contracts , the respective individuals were
  involved in this process.,
• The respective managers Performance Contracts
  were then approved by the CEO before being signed
  by both the CEO respective managers.
• The various Managers Performance Contracts will
  be cascaded to their respective subordinates,
  again the respective employees will be involved
  in this process.
• The employees Performance Contracts will also be
  checked approved by the CEO, before being
  signed by the CEO, respective Managers their
  respective staff.

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The Alexkor Performance Management Process
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Measurable Objectives -

• The measurable objectives as stipulated in the
  Shareholders Compact are as follows
• Continue operations as going concern and
  improvement of financial and operating ratios.
• Revision of Alexkor Environmental Management
  Plan.
• Conversion of old Alexkors old order mining
  rights to new order mining rights.
• Transfer the converted land mining rights to
  Richtersveld Mining Company.
• To enable the Pooling and Sharing Joint Venture
  between Alexkor and Richtersveld Mining Company

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The Alexkor Performance Management Process
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Measurable Objectives -

• Continued.....
• To transfer the specified immovable properties (
  farms and erven)
• Transfer all movable assets relating to
  agricultural and maricultural businesses to the
  Richtersveld Agricultural Company.
• Formal establishment in respect of the existing
  Alexander Bay village.
• Compliance with MPRDA and any other relevant
  legislation and the terms and conditions of the
  mining rights.
• Restructuring to achieve an optimum business
  model and establishment and implementation of
  appropriate control structure for Alexkor.

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The Alexkor Performance Management Process
-
Evaluation Of Measurable Objectives -

• Alexkors performance in relation to the
  strategic objectives is measured with reference
  to KPIs as set out on the Shareholders Compact
  which include the key items of the strategic
  objectives.
• The KPIs are included in Alexkor Corporate Plan
  and are reported on in the Quarterly Reports
  submitted to the Shareholder on periodical basis.
• The measurable objectives as set out in the
  Shareholders Compact. These measurable
  objectives are cascaded from the CEO down to
  management and the entire organisation.

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The Alexkor Performance Management Process
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Evaluation Of Measurable Objectives -

• Revision of Alexkors Environmental Management
  Plan (EMP)
• The revised EMP was submitted on November 2008 to
  the Department of Mineral Resources. We have so
  far not had any comebacks.
• Conversion of Alexkors old order mining rights
• The conversion was granted in December 2009. The
  execution should take place in about two to three
  weeks.
• Transfer the converted land mining rights to the
  Richtersveld Mining Company (RMC)
• The transfer of the rights will take place on
  execution.
• To enable the Pooling and Sharing Joint Venture
  (PSJV) between Alexkor and the RMC
• The DoS has certain suspensive conditions for the
  establishment of the PSJV
• Revision of the EMP
• Conversion of the Old order Mining Rights
• Transfer of the Mining Rights to the RMC
• A mining plan is to be put together by the
  interim joint board which does not include
  representatives of Alexkor. It is an independent
  Board which also has members of the Richtersveld
  Community.

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The Alexkor Performance Management Process
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Performance Contracts For Management -

• Performance Contracts as cascaded from the CEOs
  Performance Contract are all in place for the
  CEOs immediate subordinates as follows
• Mine Manager
• Financial Manager
• Mine Engineer
• Company Secretary
• IT Manager
• Human Resources Manager

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The Alexkor Performance Management Process
-
Performance Planning / Contracting Phase -
Of essential significance in the Alexkor
Performance Management Process is that both the
Business Strategic Objectives the Business
Values were cascaded into the Performance
Contract, as illustrated below.
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The Alexkor Performance Management Process
-
Performance Coaching / Feedback Phase -

• The Alexkor Performance Management Systems
  encourages constant coaching feedback in line
  with the Performance Contract.
• T o ensure good understanding proper use, the
  CEO Managers were taken through the following
• What is Performance Coaching?
• Guidelines for Effective Coaching (When To Coach,
  How To Coach, What To Coach, Why Coach)
• Formal Informal Coaching
• Guidelines for Providing Feedback (Positive Vs
  Negative Feedback)
• Characteristics of Feedback for Improving /
  Developing Performance
• Pitfalls to Avoid When Giving Feedback
• Guidelines for How Often to Conduct Update
  Review Discussions
• Preparing for the Coaching Discussion
• Steps for Conducting the Coaching Discussion
• Key Communication Skills (Questioning Techniques
  Listening Skills)
• Tips for Observing and Documenting Behaviours

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The Alexkor Performance Management Process
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Performance Reviewing / Appraisal Phase -

• Performance Appraisals On a Quarterly Basis
• 180 Performance Management Appraisal process is
  followed in Alexkor.
• Manager review themselves first before sitting
  with the CEO to have a discussion on the overall
  performance review discussion for the entire
  quarter.
• To ensure good understanding CEO managers where
  taken through the following
• How to conduct a Performance Review?
• Overview of Steps in Performance Review
• Performance Reviewing Guiding Principles
• Preparing For A Performance Review
• What is the Quarterly / Annual Performance Review
  Discussion?
• Steps for Conducting the Annual Performance
  Review Discussion
• The Performance Ratings.
• Guidelines for Determining the Ratings
• Appraisal Pitfalls to be Avoided
• Dealing with Performance Review Problems

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The Alexkor Performance Management Process
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Performance Rewarding Phase -

• In line with market related salaries
  remuneration practices.
• Fixed salary structure Variable salary
  structure.
• Linking Performance To Pay from the quarterly
  appraisals that are conducted.
• Performance Based Pay System the performance
  increment given is determined by taking note of
  current salary Vs the market overall
  performance rating.

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The Alexkor Performance Management Process - An
Overview

• The entire Management team at Alexkor were then
  taken through Performance Management Training
  Program to ensure thorough comprehension of the
  following Performance Phases,
• Performance Planning,
• Performance Coaching,
• Performance Reviewing
• Performance Rewarding
• The bottom line was to transfer expertise, ensure
  thorough understanding of the entire Performance
  Management process by the Alexkor Management to
  ensure effective application in Alexkor.
• The rationale is that, Performance Management
  will never survive without Management thorough
  understanding therefore support.

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The Alexkor Performance Management Process - An
Overview

• When its implemented for the entire staff, they
  will as well be taken through a one day
  Performance Management Orientation Training
  Program to ensure understanding of the
  Performance Management Process  
• A Performance Management Policy Procedure Guide
  for Alexkor a procedural document that details
  the entire Performance Management System for
  reference purposes was is also in place.

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Board Performance - Implementing DPE Guidelines

• At  the board meeting of February 2010 the board
  deliberated on the process for the evaluation of
  its performance.
• The board agreed that a self assessment of the
  board performance will be done and will be
  followed by an extensive board members
  performance evaluation by the Chairperson.
• Thereafter and overall board assessment by an
  independent assessor. This process will take
  place during April 2010.

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Board Remuneration - Implementing DPE Guidelines

• The Remuneration of the Board of Directors is
  based on the DPE State Owned
  Enterprises Remuneration Guidelines-
  Chairpersons and Non- Executive Directors.
• The SOE categorisation according to the
  Guidelines determine fee levels.
• Board members are remunerated according to the
  Guidelines
• On retainer fee basis for Main Board Membership
  and Committee membership
• At a median of the range for Alexkor size.
• Board members are also reimbursed for the
  expenses.

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Turnover at Executive level

Turnover at Executive level Turnover at Executive level Turnover at Executive level
Financial Year 2008-2009 2009-2010
Exits 0 1
Headcount 0 6
Turnover 16.66
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Demographics at Executive level

Demographics at Executive Level Demographics at Executive Level Demographics at Executive Level Demographics at Executive Level Demographics at Executive Level
Female Male Male Male
African African White Total
31-Mar-10 1 2 3 6
16.67 33.33 50.00 100
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Thank You