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04
Transparency and accountability
Remuneration
report
Remuneration
structure
– continued
Telkom introduced a
variable-based incentive
scheme for bargaining
unit employees, known
as Performance Pays.
Performance Pays focuses
on customer satisfaction
and productivity metrics,
and replaces the current STI
scheme, which is primarily
driven by group financial
performance.
Principles for KPI design and cascading include:
>
Strategic
- KPIs (flight plan) must be aligned with group strategy and financial objectives, and must contain a mix of
customer, financial, operational and people metrics
>
Focused
- Metrics per individual are limited to between four and six KPIs (spread across categories). There should be
at least one or two relevant shared/team KPIs (for example, consumer EBITDA)
>
Practical
- Employees must be able to directly influence their KPIs (other than group/BU KPIs). New KPI system was
implemented from 1 June 2016
Overall performance management process
Clear process definition
> Calendar
> Stakeholders
> Decision rights
Compliance
> Checks
> Reminders and follow-up
> Implications of non-compliance
Rewards and consequences
> Reviews and coaching
> Financial impact
> Promotions
Transparency on bonus ranges, calibration and bonus pool
Performance management
Introduction
Telkomembarked on a performance management initiative in order to review
the system and processes.
The focus is on defining key performance indicators (KPIs) for the GCEO, MDs
and their direct reports, as well as the frontline staff. The purpose of the
initiative is to implement a high-performance management culture that is
outcome-oriented, consistent, simple and practical.
A monthly/weekly dashboard will be used to manage the business units and
the focus will be on five to 10 critical and consistent KPIs (based on priorities
which may change throughout the year).