The CEO performance agreement has three components:
agency specific Goals and Commitments established between a CEO and the responsible authority
agency commitments to the Sector-wide Initiatives
Personal Development Goals, determined by the CEO.
Components of the agreement
1. Agency specific goals and commitments
The CEO and the Minister (or Board Chair) should document their agreement on a limited number of priority performance objectives for the agency (4-6 such objectives are anticipated). The specific nature and scope of objectives is at the discretion of the responsible authority but would typically include such items as:
the delivery of specific Government commitments
service delivery, service expansion or service improvement targets
the design, development or implementation of major policy initiatives, reform programs or new business models
resource Agreement Commitments
the expected contribution of the agency in progressing Government policy priorities in areas that cross departmental boundaries.
Performance objectives should be SMART (specific, measurable, achievable, relevant and time based). Targets should be directed towards higher order outcomes but may be formulated to reflect short term progress towards medium or longer term goals.
Examples of SMART performance objectives have been provided. In establishing specific and measurable key deliverables and key performance indicators it is important to clearly identify the intended outcome of the strategy or activity and be able to quantify the desired result.
2. Agency contribution to sector-wide initiatives
Agreement on the CEO's planned contribution to sector-wide administration and management priorities is to be established. These are discussed further in the Sector-wide initiatives section.
The CEO performance agreement is to be authorised by the Public Sector Commissioner, the responsible authority, and the responsible Minister (where different to the responsible authority).
Roles of the parties
There are a number of parties involved in the CEO performance agreement process. The parties include:
CEO
Board Chair
Minister
Ministerial Chief of Staff
Public Sector Commission
The roles and responsibilities of the various parties are as follows:
CEO
Under section 47 of the PSM Act, all CEOs appointed under section 45 of the Act must enter into a performance agreement each financial year (or calendar year for Managing Directors of TAFE Colleges) with their responsible authority and the Public Sector Commissioner. Acting CEOs are also required to establish an agreement within two months of commencing in an acting CEO role.
In consultation with the responsible authority and/or responsible Minister, the CEO is responsible for identifying key deliverables and key performance indicators that will act as the performance criteria upon which the assessment of the CEO/Agency’s performance will be made. This includes identifying deliverables and indicators for both the Agency Specific Goals and Commitments and Sector-Wide Initiatives. These are to be specific and measurable.
The CEO should ensure that:
discussions are held with their Responsible Authority to agree on key deliverables and performance indicators which are clear and unambiguous;
their agreement and subsequent assessment is received by the Public Sector Commission by the due date;
their CEO performance agreement is consistent with key strategic plans and documents such as the agency resource agreement, annual strategic plan and/or workforce development plan; and
reasonable explanations are provided in the assessment for the non-achievement of stated commitments.
Discussions regarding the performance agreement process can be held between the CEO and the Public Sector Commissioner, if requested.
Should the CEO wish to contact the Public Sector Commissioner, please contact Ms Margaret Riddell, Senior Executive Assistant, on 6552 8551.
Board Chair
In relation to a statutory authority, the Board or Governing Council administering the department or organisation is the responsible authority for the purposes of the CEO performance agreement process. The responsible authority is required to discuss and negotiate with the CEO the performance criteria that will be applied to assess the performance agreement at the end of the cycle.
The Board Chair should:
identify key priority areas for the statutory authority for discussion with the CEO at the commencement of the CEO performance agreement process;
engage in open and constructive discussions with the CEO to assist in developing a meaningful performance agreement;
monitor progress of the commitments made in the performance agreement;
raise any concerns or issues during the performance agreement process;
in consultation with the CEO, undertake an assessment of the CEOs performance at the conclusion of the performance agreement cycle;
provide the CEO with constructive feedback on their performance and identify areas that may need to be addressed in the next performance agreement cycle;
complete the "Evaluation and Appraisal of Agreement" section of the CEO performance agreement form, including any comments on the CEO’s performance and an overall rating of assessment of performance;
Minister
Where there is no board, committee or other body, the relevant Minister of the Crown is the responsible authority for the department or organisation.
The Minister should:
identify key priority areas for discussion with the CEO at the commencement of the CEO performance agreement process;
engage in open and constructive discussions with the CEO to assist in developing a meaningful performance agreement;
complete and return the CEO performance agreement to the Public Sector Commission in a timely manner;
monitor progress of the commitments made in the performance agreement;
in consultation with the CEO, undertake an assessment of the CEOs performance at the conclusion of the performance agreement cycle;
provide the CEO with constructive feedback on their performance and identify areas that may need to be addressed in the next performance agreement cycle;
complete the "Evaluation and Appraisal of Agreement" section of the CEO performance agreement form, including any comments on the CEO’s performance and an overall assessment of performance; and
forward the completed CEO performance assessment to the Public Sector Commission.
Ministerial chief of staff
Ministerial chiefs of staff have no legislated role in the CEO performance agreement. However, they provide a vital liaison role between the CEO and the relevant Minister in completing the CEO performance agreement and subsequent assessment.
Chiefs of Staff can assist in the CEO performance agreement process by:
responding to CEOs inquiries in a timely manner;
monitoring the receipt and progress of CEO performance agreements forwarded to the Minister for action;
arranging meetings between the Minister and CEOs to discuss the key priority areas for the CEO performance agreement; and
ensuring that completed CEO performance assessments are forwarded to the Public Sector Commission following endorsement by the Minister.
Public Sector Commission
The Public Sector Commissioner is the employing authority of CEOs appointed under section 45 of the PSM Act. To assist the Commissioner, the Public Sector Commission oversees the CEO performance agreement framework.
The role of the Commission in this regard includes:
developing and providing resources to assist CEOs in completing their CEO performance agreements and assessments;
providing direction to CEOs on the required commitments to sector-wide initiatives;
entering into discussion with CEOs on setting key deliverables and key performance indicators where required;
providing information sessions and support to CEOs on developing and assessing their performance agreements;
assessing the agreements and assessments to ensure they are specific and measurable and in compliance with Public Sector Commission guidelines;
assisting agencies and sponsors of the sector-wide initiatives to access, interpret and analyse data collected by the Public Sector Commission;
ensuring that monitoring activities, such as the Annual Agency Survey, support the assessment of progress against specific sector-wide initiatives;
developing reports that the Commissioner can provide to responsible authorities to assist them in making an informed assessment of CEO performance against sector-wide initiatives and governance obligations.
Structure of CEO performance agreements
The CEO performance agreement has three components:
Components of the agreement
1. Agency specific goals and commitments
The CEO and the Minister (or Board Chair) should document their agreement on a limited number of priority performance objectives for the agency (4-6 such objectives are anticipated). The specific nature and scope of objectives is at the discretion of the responsible authority but would typically include such items as:
Performance objectives should be SMART (specific, measurable, achievable, relevant and time based). Targets should be directed towards higher order outcomes but may be formulated to reflect short term progress towards medium or longer term goals.
Examples of SMART performance objectives have been provided. In establishing specific and measurable key deliverables and key performance indicators it is important to clearly identify the intended outcome of the strategy or activity and be able to quantify the desired result.
2. Agency contribution to sector-wide initiatives
Agreement on the CEO's planned contribution to sector-wide administration and management priorities is to be established. These are discussed further in the Sector-wide initiatives section.
3. Personal development goals
CEOs should identify individual development goals.
The CEO performance agreement is to be authorised by the Public Sector Commissioner, the responsible authority, and the responsible Minister (where different to the responsible authority).
Roles of the parties
There are a number of parties involved in the CEO performance agreement process. The parties include:
The roles and responsibilities of the various parties are as follows:
CEO
Under section 47 of the PSM Act, all CEOs appointed under section 45 of the Act must enter into a performance agreement each financial year (or calendar year for Managing Directors of TAFE Colleges) with their responsible authority and the Public Sector Commissioner. Acting CEOs are also required to establish an agreement within two months of commencing in an acting CEO role.
In consultation with the responsible authority and/or responsible Minister, the CEO is responsible for identifying key deliverables and key performance indicators that will act as the performance criteria upon which the assessment of the CEO/Agency’s performance will be made. This includes identifying deliverables and indicators for both the Agency Specific Goals and Commitments and Sector-Wide Initiatives. These are to be specific and measurable.
The CEO should ensure that:
Discussions regarding the performance agreement process can be held between the CEO and the Public Sector Commissioner, if requested.
Should the CEO wish to contact the Public Sector Commissioner, please contact Ms Margaret Riddell, Senior Executive Assistant, on 6552 8551.
Board Chair
In relation to a statutory authority, the Board or Governing Council administering the department or organisation is the responsible authority for the purposes of the CEO performance agreement process. The responsible authority is required to discuss and negotiate with the CEO the performance criteria that will be applied to assess the performance agreement at the end of the cycle.
The Board Chair should:
Minister
Where there is no board, committee or other body, the relevant Minister of the Crown is the responsible authority for the department or organisation.
The Minister should:
Ministerial chief of staff
Ministerial chiefs of staff have no legislated role in the CEO performance agreement. However, they provide a vital liaison role between the CEO and the relevant Minister in completing the CEO performance agreement and subsequent assessment.
Chiefs of Staff can assist in the CEO performance agreement process by:
Public Sector Commission
The Public Sector Commissioner is the employing authority of CEOs appointed under section 45 of the PSM Act. To assist the Commissioner, the Public Sector Commission oversees the CEO performance agreement framework.
The role of the Commission in this regard includes:
Page last updated 24 September 2012