As discussed in Chapter 4 of the Partnerships Victoria Contract management guide, it is good practice for there to be a relationship at the strategic level between senior management of the government party and of the private party and its consortium members. In addition, the internal organisation of the private party and the quality of its management and operating personnel can impact upon project performance. The contract director should therefore report to senior management on material changes in the private party's organisational structure and any concerns in relation to the quality of its management and operating personnel.
The following table outlines the key organisational structure issues that should be considered and appropriate tools or processes to be used.
Issues to be considered | Tools or processes |
What is the organisational structure? Is there a formal organisation chart that is regularly updated? Are authority and responsibility relationships clearly established? Are plans and controls in each organisational unit inadequate, adequate, or over-developed (red-tape)? Is there a culture throughout the organisation of reducing costs and improving quality? Do all the organisational units operate effectively in working towards the overall objectives or are they non-cooperative or competitive with one another? | Organisational chart - in a complex structure, the analysis of financial health should focus on which organisation/s has/have ultimate responsibility for service delivery, taking into account parent company guarantees for subsidiaries. This chart is likely to require regular updating |
The following table outlines the key performance issues that should be addressed in reviewing the quality of management personnel.
Issues to be considered | Tools or processes |
What person or group constitutes top management? Has present top management been responsible for performance over the past few years or are they relatively new? What style of management is being used (e.g. autocratic or participative)? What influence or control does the board of directors exercise? What are the capabilities of the board of directors? What is the level of experience of top management personnel and how long are they expected to remain? What is the quality of the middle management and supervisory personnel in terms of planning and controlling work, with regard to meeting schedules, controlling costs, improving quality and performance? What are the private party's relationships with subcontractors, such as the construction contractor, operator and facilities maintenance contractor? Have they been in similar projects together? How is the private party managing those relationships? Are there any significant issues? | Operational reports - there should be a requirement placed on the private party to regularly provide updates on the management structure, including any changes in personnel Operational audit - where necessary, the government party should conduct its own audit of the management structure, including where appropriate following up references for key managerial staff (in accordance with privacy laws and regulations) Regular payment reports - discussed in detail later in this appendix |
The following table outlines the key performance issues to be addressed in reviewing the quality of operative personnel.
Issues to be considered | Tools or processes |
What are the skills and abilities of the workforce? Are these skills adequate for meeting the needs of the contract? What is the general attitude and level of motivation of employees? How responsive are staff to meeting deadlines? What is the level of employee turnover? Does the organisation have enough skilled workers to meet the needs of the contract? Are there key people specified in the contract? If so, are those individuals performing the nominated roles? What is the wage policy of the organisation? (For example, are they paying the highest wages in the sector?) What training has been undertaken or is to be undertaken? What recruitment, promotion, redundancy or dismissal of any employee and/or any industrial disputes have occurred? What accidents and health and safety incidents have occurred? | Operational reports - there should be a requirement placed on the private party to regularly provide updates on operating personnel, including any changes in personnel Operational audit - where necessary, the government party should conduct its own audit of the operations, including where appropriate following up references on operating personnel (in accordance with privacy laws and regulations) Regular payment reports - discussed in detail later in this appendix |