Ministers’ performance-based contracts: Results matter

IT’S true, action speaks louder than words. The performance-based contracts signed by Cabinet ministers and heads of public institutions last week have brought a new dimension that results speak louder than actions.

Having performance-based contracts ensures the effectiveness and efficiency of all local authorities, public institutions and State-owned enterprises in Zimbabwe on condition that enough support is given to realise intended results.

What are performance-based contracts?

A performance-based contract is a negotiated performance agreement between government, acting as the owner of an agency and ministers acting as employees. It is an agreement between two parties that clearly specifies their mutual performance obligations and in this case it’s the government and its ministers as employees. It specifies what needs to be achieved, expected levels of achievement, timelines and reporting modalities. Performance agreements are used to define accountability for specific ministerial goals and to help executives align their daily operations with the agency’s programme goals.

It is a freely-negotiated performance agreement between the government, acting as the owner of public agency on one hand, and the management of the agency on the other hand. The performance-based contract specifies the mutual performance obligations, intentions and the responsibilities of the two parties. Similarly, it also addresses economic/ social and other tasks to be discharged for economic or other gain.

Zimbabwe’s case on performance-based contracts

Cabinet ministers, heads of State-owned entities and parastatals signed performance-based contracts last week and among those who signed was the Reserve Bank of Zimbabwe governor John Mangudya and others.

Performance-based contracts for permanent secretaries were launched in 2020 in a bid to create robust public sector institutions and leadership.

It’s true that performancebased contracts are the best way to manage public officials, especially heads of departments and senior managers but the implementation part will be key.

The idea of performance-based contract is that nobody must be permanently employed when non-performing.

If there is no value for money, the employer, which in this case is the government, must be able to dismiss an underperformer. In the past, senior officials have not been accountable to the employer in terms of performance but only in terms of reporting for duty.

Why performance-based contracts?

The government acknowledges that over the years there has been poor performance in public sector, especially in the management of public resources which has hindered the realisation of sustainable economic growth. Some of the contributing factors that can be attributed to poor performance include excessive regulation and control, frequent political interference, poor management, outright mismanagement and a bloated staff establishment. There are a lot of factors that adversely affect the performance of the public sector and the introduction of performance-based contracts will expose those who are inefficient but continue to hold public office.

Stronger alignment with results-oriented goals

Goals help align employees with the organisation’s mission. They also help employees (ministers) see how their contributions fit into the bigger picture and the value they bring to the country in their various ministries.

Performance-based agreements define accountability for specific organisational goals, help executives align daily operations, and clarify how work unit activities contribute to the agency’s goals and objectives.

Performance-based agreements provide a useful vehicle to bring results-oriented performance information into the executive’s performance evaluation. Goals direct and guide employee efforts, motivate performance, and improve performance evaluation and strategic planning. In other words, without the right goals, performance and engagement suffers.

Continuity of programme goals during leadership transitions

Leadership continuity helps to sustain an institution’s viability and future mission by supporting its people and developing its human capital. Preparing for transition at the top is only a part of establishing a culture of leadership continuity and performance-based contracts can assist in such transitions.