BRIEFING ON STRATEGIC PLANS AND BUDGETS FOR 2016/17 PRESENTATION OUTLINE Who is Productivity SA? Vision and Mission Value Chain Proposition Key Priority Sectors Structure and Governance Strategic Objectives Programme Focus Strategic Projects Strategic Direction-Business Model

WHO IS PRODUCTIVITY SA? Who is Productivity SA Productivity SA is established in terms of section 31(1) of the Employment Services Act as a juristic person. Its mandate is to promote employment growth and productivity

Vision To lead and inspire a productive and competitive South Africa.

VISION & MISSION Mission “To improve productivity by diagnosing, advising, implementing, monitoring and evaluating solutions aimed at improving South Africa’s sustainable growth, development and employment through increased competitiveness” 5

Employment Services Act – Finances of Productivity SA Finances of Productivity SA - Section 40 (1) Productivity SA financed from: Money appropriated by parliament for this purpose; Income earned from services rendered by it Grants or donations made to it Money received from any other source

Value Chain Proposition National priorities Drivers e.g. NDP, IPAP, New Growth Path, MTSF, WCR Enabling Act – Juristic Person Mandate Vision & Mission Strategic Objectives Key Priority Sectors Value Proposition – Solutions via Programmes Impact MTSF – Medium Term Strategic Framework

Economic impact Creation of Employment Poverty alleviation Reduction of inequality Improved Economic efficiency

Functions of Productivity SA – Section 32 Clause of the Employment Services Act Productivity SA’s Value Propositions (a) To promote a culture of productivity in the workplace Enterprise productivity and competitiveness Micro-small enterprises and cooperatives productivity capabilities Knowledge Management and Research Public sector efficiency and effectiveness Productivity awareness (b) To develop relevant productivity competencies (c) To facilitate and evaluate productivity improvement and competencies in workplaces (d) To measure and value productivity in the workplace (e) To maintain a database of productivity and competitiveness systems and to publicise these systems (f) To undertake productivity-related research (g) To support initiatives aimed at preventing job losses (h) To perform any other function

Services Drivers Outcomes CONTRIBUTING TO DECENT EMPLOYMENT THROUGH INCLUSIVE GROWTH NDP IPAP New Growth Path World Competitiveness Report MTSF Drivers Enhancing the productive capacity of South Africa SOLUTIONS Turnaround Productivity and competitiveness SMME & Co-operatives Training Knowledge Management & Research Productivity Awareness Services Improved productivity and competitiveness in Enterprises Effective communication between employees and management Early warning systems to prevent job losses Build productive capabilities of SMMEs and intermediaries Awareness creation on importance of productivity Provision of industry related information and comment on productivity of priority economic sectors Outcomes ‘ MTSF – Medium Term Strategic Framework

PRIORITY SECTORS

Productivity SA Priority Sectors Productivity SA ‘s Priority Sectors Manufacturing Agro-Processing Mining Public Sector 10 Main sectors State of the nation address talks about 5 Priorities – Education, Health, Fight against crime and corruption, land reforms and Creating decent work

STRUCTURE AND GOVERNANCE Schedule 3A Entity – reporting to Minister of Labour Tripartite organisation Board drawn from organised Business, Organised Labour and Government Programmes STRUCTURE AND GOVERNANCE

Implementation Delivery grouped as follows: Region 1 Gauteng - Physical presence Limpopo Northwest Delivery grouped as follows: Region 2 Western Cape - Physical presence Northern Cape Free State Region 3 Kwa-Zulu Natal - Physical presence Eastern Cape Mpumalanga

PROGRAMMES Turnaround Solutions Productivity Organisational Solutions Value Chain Competitiveness Marketing and Communications Human Resources Corporate Services

STRATEGIC objectives Promote a culture of productivity in the workplaces Develop relevant productivity competencies Facilitate and evaluate productivity improvement and competencies in workplaces Maintain a database of productivity and competitiveness systems and publicising these systems Undertake productivity-related research Support initiatives aimed at preventing job losses

ALIGNMENT WITH OBJECTIVES OF KEY FUNDER’S Alignment with Funder’s Objectives: 2016/17 DoL R47.944m * National Awareness Campaign * Research Reports for specific sectors * SMME & ETD – Employment creation 11% dti R8.523m * Support Industrial Clusters * Workplace Collaboration Management and Workers * Competitiveness & Productivity * R&D 5% UIF R97.8m *Turnaround solutions in companies in distress * Rescue companies *Saving jobs *Positive WP relations 57% Self-generated R18.7m * Utilise skills set to generate additional funding to be sustainable 28%

PROGRAMME FOCUS

PROGRAMME 1 TURNAROUND SOLUTIONS

PROGRAME PURPOSE To prevent job losses through Turnaround Solutions

TARGETS 2016/17 PROGRAMME OBJECTIVES Key Indicators Targets Support initiatives aimed at preventing job losses Key Indicators Number of companies nurtured Number of future forums established Number of work-plans developed Number of work plans implemented Number of close out reports Number of impact assessment Capacity Building of Future Forums Productivity Champion Training Number of Jobs Impacted Targets 200 100 10 000

PROGRAMME OUTCOMES Improves Productivity Improves profitability Improves company performance through better marketing, financial strategies, management, HR and Operations Effective communication between employees and management Job security Early Warning systems to detect signs of decline

PRODUCTIVITY ORGANISATIONAL SOLUTIONS PROGRAMME 2 PRODUCTIVITY ORGANISATIONAL SOLUTIONS

PURPOSE OF THE PROGRAMME To provide productivity training to SMME’s/Cooperatives in order to foster continuous performance improvement in their workplaces; as well as Intermediaries such as educators, skills development facilitators and ETD service providers to leverage our reach to organisation and communities.

TARGETS 2016/17 Programme Objectives Indicators Targets Develop relevant productivity competencies Facilitate and evaluate productivity improvement and competitiveness in workplaces Indicators Number of educators trained Number of emerging entrepreneurs trained Number of workers trained Number of SDF’s trained Number of managers trained Number of graduates engaged Targets 200 5500 1000 100 170 2

PROGRAMME OUTCOMES Increased number of intermediaries facilitating the spread of productivity competencies and mindsets Generate and disseminate knowledge and key productivity drivers and challenges Increased number of educators, learners, ETD service providers and SDFs with enhanced productivity competencies and mindsets. Increased number of public sector organisations, including municipalities managing their resources efficiently and effectively Enhance public sector efficiency and effectiveness resulting in improved service delivery Increase productivity levels amongst a number of small enterprises Build the productive capabilities of micro-small enterprises

VALUE CHAIN COMPETITIVENESS PROGRAMME 3 VALUE CHAIN COMPETITIVENESS

PROGRAMME STRATEGIC FOCAL AREAS Manages the total knowledge assets of Productivity SA Improves the productivity and competitiveness of South African firms and sectors through the implementation of continuous improvement principles at the workplace Generate and provide decision makers in government, business and labour with information on productivity Research The workplace challenge programme Knowledge management (Support Function)

PURPOSE OF PROGRAMME The programme comprises the following divisions: The Workplace Challenge (WPC) The WPC Programme is an initiative of the Department of Trade and Industry (dti) Productivity SA manages the programme on behalf of the dti. The WPC improves the productivity and competitiveness of South African firms and sectors through constructive labour relations and the implementation of continuous improvement principles at the workplace. Knowledge Management Manages the total knowledge assets of the Productivity SA for easy storage, retrieval, reuse and continuous improvement of the assets. Research Generate and provide decision makers in Government, Business and Labour with information and knowledge on productivity of economic sectors to improve competitiveness of our economy. .

VALUE CHAIN COMPETITIVENESS Overall programme strategic objectives: To provide technical expertise to improve business processes at firm-level for wealth and employment creation by: upgrading the value-chain efficiencies in industry; and improving the overall competitiveness of the economy To initiate and conduct cutting-edge research and co-ordinate Knowledge Management processes and practices To ensure that Productivity SA is the custodian of choice of productivity related information and knowledge .

TARGETS 2016/17 Programme Objective Indicators Targets Publish Productivity Research reports for selected sectors Indicators Annual Productivity Statistics Annual Competitiveness Indicators position for (IMD) World Competitiveness Yearbook Annual Study on Public sector productivity and performance and service delivery Develop a report on the best way to manage performance, productivity and remuneration in the PES Reports conducted on identified relevant sectors as commissioned Number of Seminars conducted Targets 1 report 1 Report 4 Report 9

TARGETS 2016/17 Programme Objective Indicators Targets Develop relevant productivity competencies Facilitate and evaluate productivity Improvement and competitiveness in workplaces Research and Development Indicators Number of new entrepreneurs that joined WPC Number of capacity building workshops Number of companies implementing WPC Number of change facilitators and interns coached Number of companies in after care Number of quarterly newsletters Launch M & E system Train staff on Green Productivity toolkit Number of case companies Targets 213 80 247 15 change facilitators and 3 interns 308 4 Roll out the system Roll out Green Productivity Toolkit 39

PROGRAMME OUTCOMES Generate and disseminate cutting-edge information and knowledge on productivity across economic sectors Generate and disseminate authoritative Productivity Statistics Increased number of enterprises with high levels of productivity and competitiveness Upgraded value-chain efficiencies in industrial sectors Improved competitiveness in the overall economy

MARKETING AND COMMUNICATIONS DEPARTMENT PROGRAMME 4 MARKETING AND COMMUNICATIONS DEPARTMENT

PROGRAMME OBJECTIVES To inform, educate and lead South Africans in discussions on issues pertaining to Productivity To promote the concept of productivity and competitiveness through various medium Print Radio Online Seminars Workshops Awards and Productivity Month Social media To build appropriate relationships between Productivity SA and stakeholders Partnership or co-sponsorship of productivity or labour related issues Initiate own and participate in relevant discussion forums Invitations to lectures, seminars

TARGETS 2016/17 Outcomes Indicators Targets National Awareness campaign Productivity related knowledge at a strategic level to support the national productivity campaign Productivity month campaign Indicators Media articles published Number of Electronic newsletters published Number of Leader magazine published Annual report Productivity awards Workshops and seminars conducted in regions Number of partnerships with stakeholders Targets 395 12 4 1 7 30 9

PROGRAMME OUTCOMES Create awareness of the importance of productivity and competitiveness (e.g. productivity seminars) Create association of productivity concepts with Productivity SA South Africans embrace the concepts of productivity that lead to changed behaviour An entrenched brand awareness that lead to a strong brand equity Forefront of Productivity thinking and discourse

HUMAN RESOURCES DEPARTMENT PROGRAMME 5 HUMAN RESOURCES DEPARTMENT

TARGETS 2016/17 Programme Objective Indicators Targets Generate career path maps List of development areas of individuals Individual Development Plans of person identify development Established goal setting processes that facilitates total participation and alignment of goals System process for assessing performance in a fair and equitable manner (scorecards) Salary surveys to determine “market relatedness” of remuneration Climate/Culture survey and interviews to check change conducted to improve Culture Shift Indicators Talent Management Development Plans Reviewed Individual Development Plans Completed Performance Contracting Completed Performance Reviews Salary survey/benchmarking against DPSA Annual Climate/Culture survey Targets 80% 100% 70% Completion of IDP’s 100% Completion of Performance Contracting 100% completion of Performance Reviews 100% completion of salary benchmarking exercise 75% implementation

PROGRAMME 6 CORPORATE SERVICES Reporting Governance Sustainability Compliance Support Enabler – IT & Facilities

Employment Services Act – Finances of Productivity SA Finances of Productivity SA - Section 40 (1) Productivity SA financed from: Money appropriated by parliament for this purpose; Income earned from services rendered by it Grants or donations made to it Money received from any other source

BUDGET 2016/17 BUDGET 2016/17 2016/17 REVENUE R’000 Income from sources other than grant funding 28 947 Interest received and other income 446 Sub-total - other income 29 393 Transfers and grants received 154 273 Total revenue 183 666 EXPENSES   Compensation of employees 63 018 Goods and services 119 866 Depreciation 782 Interest - Total Expenses Surplus / (Deficit)

FUNDING FOR PRODUCTIVITY SA – 2009/10 to 2017/18 LINE GRAPH – DoL on the gradual increase. Dti on the decline. UIF very erratic. To show trend, one has to look at more than 5 years

ACTUAL GRANTS VS PROJECTED EXPENDITURE DESCRIPTION 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 R’000 DoL 37 050 40285 43 119 45 531 47 944 50 341 53 261 dti 8 200 13 561 9 170 8 094 8 523 8 943 9 462 UIF 26 500 41 850 29 250 17 666 97 806 78 000 82 524 Total Actual grants & transfers 71 750 95 696 81 539 71 291 154 273 137 284 145 247 Projected Total expenditure 116 044 107 082 113 595 127 678 183 080 168 604 178 371 We can do so much more. What we have barely scratches the surface. Year in year out we budget to make a bigger impact but we consistently receive a reduced grant for various reasons – We started at a low base Money is tight. The end result is that we cut back on the planned interventions to turn companies around, roll out competitiveness and make companies productive. The effect of this is increased unemployment due to jobs lost when companies close down, productivity improvement not done, research and stats not done and SMME’s not trained.

TOTAL ACTUAL GRANTS RECEIVED vs PROJECTED EXPENDITURE – 2012 to 2019 LINE GRAPH – DoL on the gradual increase. Dti on the decline. UIF very erratic.

FUNDING & TOTAL EXPENDITURE – 2012/13 to 2018/19 LINE GRAPH – DoL on the gradual increase. Dti on the decline. UIF very erratic.

TRANSFERS RECEIVABLE INSTITUTION PROGRAMME R’000 % DEPARTMENT OF LABOUR (DoL) As per MTSF 47 944 31 DEPARTMENT OF TRADE AND INDUSTRY (dti) WORKPLACE CHALLENGE 8 523 6 UNEMPLOYMENT INSURANCE FUND (UIF) TURNAROUND STRATEGY 97 806 63 TOTAL TRANSFERS 154 273 100

TRANSFERS – 2016/17

TOTAL REVENUE DESCRIPTION R’000 % TOTAL TRANSFERS (GRANTS) 154 273 84 OTHER NON-TAX REVENUE 29 393 16 TOTAL REVENUE 183 666 100

TOTAL REVENUE

EXPENSES DESCRIPTION PROGRAMME R’000 % COMPENSATION OF EMPLOYEES SALARIES & RELATED 63 018 34.3 GOODS AND SERVICES INTERVENTIONS AND ADMIN 119 866 65.3 DEPRECIATION 782 0.4 TOTAL EXPENDITURE 183 666 100

EXPENDITURE

ACHIEVEMENTS Continued Unqualified audit opinion Health and Safety – 99% Compliance B-BBEE Rating of 3 (moving from 5 in prior year) ISO 9001 Public Sector SETA Accreditation Strategic alliances / partners and projects

CHALLENGES Diminishing funding sources Undercapitalised for our mandate Lack of investment in product development and upgrading of product offering and its presentation Inability to attract and retain talent Limited investment in appropriate and relevant technology Limited resources to market , fund and implement Productivity SA programmes to the critical masses as well as increasing our footprint throughout the country.

STRATEGIC PROJECTS City Of Ekurhuleni 2. Transnet 3. Rand Water Value Duration Outcomes City Of Ekurhuleni R 5 900 000 3 years Productivity Improvement and Competitiveness 2. Transnet R23 050 000 5 years Enterprise Development 3. Rand Water R 8 200 000 Productivity analysis, including the training of all Rand Water staff

STRATEGIC PARTNERSHIPS PROJECT DURATION Description SANACO (South African national Apex Cooperative Ltd) Three years MOU ending October 2016 Cost-sharing Annual training and certification of 2400 Cooperatives nationally South African Forestry Company Limited (SAFCOL)  3.5 years Productivity Improvement project SAWEN (South African Women Entrepreneurs’ Network) One year Capacitation of 150 female entrepreneurs on productivity related matters ILO Ad-hoc Implementation of SCORE productivity training in Tourism industry SEDA (Small Enterprise Development Agency) R3 498 per smme Aftercare training for graduates from SEDA incubators. DoE (Department of Education)) One year (2016/2017) Training of educators in 13 disadvantaged schools in conjunction with BMF dti Training of cooperatives SAWEN is a networking forum for individuals and organisations that are committed to the promotion and advancement of women entrepreneurs 

Dissemination of Asian experiences to Africa Asian Productivity Organisation (APO) Partnership Multilateral partnership with Pan African Productivity Association Objective: To assist African National Productivity Organisation (NPOs) in capacity building and developing certified productivity practitioners and trainers.   2015/16 Training of Trainers for Productivity enhancement in Africa Program – 2 week program conducted for 8 African countries (Botswana, Ghana, Mauritius, Namibia, Tanzania, Burkina Faso, South Africa, Zambia) Five staff from Productivity SA participated

Dissemination of Asian experiences to Africa   Japan Productivity Center (JPC) Collaboration: Bilateral relationship with individual PAPA member countries or NPOs on Technical Cooperation on Productivity Improvement to African Nations Objectives: To train productivity experts on productivity improvement methods at enterprise level such as 5S, Kaizen, Green Productivity, quality improvement. Observational study missions to Japan 2015/16 Two Productivity SA employees went on a 2week study mission to Japan Three South African model companies involved in 5s activities: WECO (Pty) Ltd, UTP Mould & Die cc and SL Diamond Tools Dissemination seminar to showcase results of this model companies with other PAPA member countries. .

STRATEGIC DIRECTION – BUSINESS MODEL SIX PILLARS Partnership Public Presence People Products and services Process Performance CLUSTER 1 CLUSTER 2 CLUSTER 3 6P’s 3 Clusters Looked at challenges and came up with new business model which focuses on alternative sources of revenue and revising charge-out rates

THANK YOU