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Senior Eskom officials could lose cash if they don't perform: De Ruyter

The pay of senior Eskom officials will be “at risk” if they fail to do their jobs, the utility's group CEO Andre de Ruyter has confirmed.

Speaking at a press conference on Wednesday night, De Ruyter confirmed that human resources teams were thrashing out processes that would ensure that new performance-based contracts were in place — with both rewards and consequences for those involved.

He said it was aimed at “a small group of very senior executives in the generation management team to drive the right behaviour there and ensure that the right incentives, and disincentives, are in place”.

“The variable pay that we’re introducing is not going to be for members of the bargaining unit, so this is not intended to change the conditions of service for union members. So we don’t expect any challenges from unions in this regard,” he said.

Speaking earlier in the briefing, public enterprises minister Pravin Gordhan said that this was a final element to ensure that power stations were operating at their best capacity.

“This afternoon, the board and the senior management of Eskom have talked about, and will shortly introduce, new provisions which will ensure that pay within the Eskom environment at certain levels of management will be directly related to performance.

“In other words, if your particular power station is not performing at the rate that is required or it is capable of performing at, then the necessary consequences must follow.

“The chief executive [De Ruyter] and other senior managers within Eskom will also ensure that there are senior people on the ground. They have been doing this over the recent past, but more of this needs to happen to instil the right kind of urgency and vigilance at all levels of Eskom, particularly at the power station level,” he said.

De Ruyter was asked at the briefing how this differed from a previous performance system that was in place — first reported by News24 — for senior officials. This system, the report stated, resulted in power station managers receiving green, yellow and red cards based on meeting performance targets.

A green card would be issued if targets were met, a yellow card if targets were not met and, “after nine yellow cards, amid an incident that warranted a 10th yellow card, a red card would be issued and the manager would be suspended for seven days without pay”, according to the article.

While this resulted in fewer breakdowns at power stations, it also resulted in plants not being properly maintained and some issues not being reported — something that De Ruyter made reference to on Wednesday night.

He said: “My understanding is that was a card system, based on a yellow card and a red card, and if there was a certain number of yellow cards and a red card followed, that resulted in dismissal, or similar disciplinary action. Our analysis of this system is that it resulted in numbers being not accurately disclosed and plants being run far harder with no defects to avoid the negative consequences.”

But the new system, he insisted, was a “completely different approach”.

“There will be variable pay that is linked to performance. This is common practice, as you will be aware, in the private sector. So there will be a base pay, but then a variable pay component around rewarding extraordinary performance but also resulting in pay being at risk if certain performance targets are not met. Our human resources colleagues are hard at work putting in place exactly this system,” he said.

The exact details of how this would work were not provided.

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