Chapter 11. Performance Framework

The Department has developed a performance framework to be the primary mechanism by which the performance of Self-Employment Assistance Providers is assessed. The Department may also choose to consider the Provider’s performance against the requirements of the Deed, the Joint Charter, the Service Guarantee, and any representations in the Provider’s response to the Self-Employment Assistance request for tender.

The performance framework is based on the principles of efficiency, effectiveness, quality, and assurance. The Department will provide feedback to Providers regarding their performance against these principles at the end of each 12 month Performance Period. Where relevant, the Department will work proactively with Providers to address performance management issues.

Please note: The Performance Period will commence on 1 July each year and end on 30 June the following year.

This Chapter outlines how the Department measures the performance of Self-Employment Assistance Providers under the performance framework and the process by which the Department may reallocate Places.

The performance framework measures the performance of Self-Employment Assistance Providers using a single performance score, which provides a simple and transparent mechanism for measuring performance. The Provider’s performance will be assessed in each of their Employment Region(s).

The single performance score will reflect the performance of Self-Employment Assistance Providers against 3 Key Performance Indicators (KPIs). Performance against these KPIs will be weighted to calculate the single, overarching score. The weightings for each KPI are:

• KPI 1 – Place Usage: 40%

• KPI 2 – Outcomes: 40%

• KPI 3 – Quality: 20%.

The annual business reallocation process is based on the 12 month Performance Period ending 30 June each Financial Year.

(Deed Reference(s): Clauses 106, 107)

Providers are allocated a number of Places each Financial Year in each of their Employment Regions for the delivery of Workshops, Small Business Coaching, Business Advice Sessions, and Business Health Checks. KPI 1 assesses the efficiency of the Provider’s service delivery by measuring their usage of these allocated Places in each Financial Year at a point in time.

KPI 1 has two components, each measuring the Provider’s usage of their allocated Places.

KPI 1A – Small Business Coaching Place Usage (25%)

Source formula shown as an image ServiceCite note: The official guideline shows this formula as an image. The Department describes it as: “Image depicting a fraction showing how KPI 1A is measured. The numerator of the fraction reads 'Small Business Coaching Places used'. The denominator of the fraction reads 'Small Business Coaching Places allocated'.” View the formula in the official PDF on page 53.

KPI 1A measures the proportion of allocated Small Business Coaching Places by the Provider. The methodology of KPI 1A is as follows:

The Small Business Coaching Place allocation will be based on the Provider’s allocation of Small Business Coaching Places at the point in time KPI 1A is being assessed.

Where the Provider has increased their allocation of Small Business Coaching Places through any Handback of Small Business Coaching Places process during the Financial Year, the Provider’s allocation will be calculated based on their new, higher number of allocated places.

Where the Provider has reduced their allocation of Small Business Coaching Places through any Handback of Small Business Coaching Places process during the Financial Year, the Provider’s allocation will be calculated using the average of the Provider’s:

• initial allocation of Small Business Coaching Places following the completion of any business reallocation process conducted at the beginning of the Financial Year, and

• allocation of Small Business Coaching Places at the point in time KPI 1A is being assessed.

For example: RUN Business Inc is a Self-Employment Assistance Provider operating in the Cairns Employment Region. After having 100 Small Business Coaching at the beginning of the Financial Year following the completion of the business reallocation process, they hand back 20 Small Business Coaching Places using the annual Handback of Small Business Coaching Places process. This leaves them with 80 allocated Places. By the end of the Financial Year, RUN Business have used 70 Small Business Coaching Places in the Cairns Employment Region.

RUN Business’ performance under KPI 1A for the Performance Period ending 30 June is assessed using the following calculation:

Source formula shown as an image ServiceCite note: The official guideline shows this formula as an image. The Department describes it as: “Image depicting a fraction showing how KPI 1A is measured for RUN Business. The numerator of the fraction 70, representing the Provider's Places used. The denominator of the fraction show in brackets '100 plus 80', which is then divided by 2. This denominator represents the average of the Provider's Small Business Coaching Places allocation.” View the formula in the official PDF on page 53.

Accordingly, RUN Business' score for KPI 1A is: (70 / 90) = 78%.

KPI 1B – Other Services Place Usage (15%)

KPI 1B measures the proportion of allocated Places that are used by the Provider for:

• Workshops

• Business Health Checks

• Business Advice Sessions.

The methodology of KPI 1B is as follows:

Source formula shown as an image ServiceCite note: The official guideline shows this formula as an image. The Department describes it as: “Image depicting a fraction showing how KPI 1B is measured. The numerator of the fraction reads 'Total non-Small Business Coaching Places used'. The denominator of the fraction reads 'Total non-Small Business Coaching Places allocated'.” View the formula in the official PDF on page 54.

Where the Provider’s usage of Places for Business Health Checks and/or Business Advice Sessions exceeds their nominal regional Place allocation (see Flexible usage of Places for Business Health Checks and Business Advice Sessions), the figure used will be their allocated number of relevant Places in the Employment Region.

Example: Ask! Advisory Services is a Provider in the Ballarat and Bendigo Employment Regions. Their Place allocations and usage as at the end of the Financial Year are identified in Table 11‑A.

Because they exceeded their Place allocation for Business Advice Sessions in Ballarat, they were unable to use 34 Business Advice Session Places in Bendigo. In totalling their Places used in Ballarat for the purposes of KPI 1B, their allocation of Business Advice Session Places (29) is used rather than their Places used (33).

Accordingly, for KPI 1B Ask! Advisory Services received the following scores:

Ballarat: (62 / 65) = 95% Bendigo: (70 / 76) = 92%.

Table 11‑A: Example of Place allocations - Ask! Advisory Services

KPI 2 assesses the effectiveness of the Provider’s service delivery by measuring the outcomes of Participants who access Small Business Coaching. KPI 2 measures 2 types of Performance Outcomes – Full Performance Outcomes and Partial Performance Outcomes.

Full Performance Outcomes

The Provider will be credited a Full Performance Outcome for a Participant who exits Small Business Coaching if the Participant:

• accessed the Services from the Provider throughout their Period of Small Business Coaching, and

• was, at the time of their last submitted Quarterly Report, earning an average net income from their Business of at least:

  • 30% of the Basic Rate of JobSeeker Payment, if it was their first Quarterly Report;

  • 60% of the Basic Rate of JobSeeker Payment, if it was their second Quarterly Report; or

  • the Basic Rate of JobSeeker Payment if it was their third or a subsequent Quarterly Report.

The relevant Basic Rate of JobSeeker Payment will be the rate of payment on the final day of the Financial Quarter that the Quarterly Report covers. The Provider must calculate the Participant’s average net income from their Business across the period identified on the Quarterly Report.

Partial Performance Outcomes

There are 2 ways the Provider can be credited a Partial Performance Outcome.

Splitting a Full Performance Outcome into 2 Partial Performance Outcomes

Where a Participant transfers between Self-Employment Assistance Providers during their Period of Small Business Coaching and otherwise meets the conditions for a Full Performance Outcome, both Providers will each receive a Partial Performance Outcome.

This means that both Self-Employment Assistance Providers will be credited a Partial Performance Outcome for a Participant who exits Small Business Coaching if the Participant:

• accessed the Services from the Provider at the time of either their Small Business Coaching Commencement or their exit from Small Business Coaching, and

• was, at the time of their last submitted Quarterly Report, earning an average net income from their Business of at least:

  • 30% of the Basic Rate of JobSeeker Payment, if it was their first Quarterly Report;

  • 60% of the Basic Rate of JobSeeker Payment, if it was their second Quarterly Report; or

  • the Basic Rate of JobSeeker Payment if it was their third or a subsequent Quarterly Report.

Participants who remain off Income Support Payments

The Provider will be credited a Partial Performance Outcome for a Participant who did not immediately meet the conditions for a Partial Performance Outcome or Full Performance Outcome upon exiting Small Business Coaching where the Participant:

• was receiving Income Support Payments on the day prior to their Small Business Coaching Commencement, and

• is not receiving Income Support Payments 12 weeks following their exit from Small Business Coaching.

KPI 2 Methodology

The methodology of KPI 2 is as follows:

Source formula shown as an image ServiceCite note: The official guideline shows this formula as an image. The Department describes it as: “Image depicting a fraction showing how KPI 2 is measured. The numerator of the fraction reads ''Number of Full Performance Outcomes' plus, in brackets, 'number of Partial Performance Outcomes divided by 2'. The denominator of the fraction reads 'Number of exited Participants who have commenced and/or exited Small Business Coaching with the provider', minus, in brackets 'Number of Partial Performance Outcomes for transferred Participants divided by 2'.” View the formula in the official PDF on page 56.

As Performance Outcomes have significant lead times, KPI 2 will be measured on a contract-to-date basis.

KPI 3 assesses the quality of the Provider’s service delivery, the Provider’s compliance with the Deed, Participant feedback and the outcomes of assurance activities conducted by the Department. Each Performance Period, the Department’s Provider Lead may consider the evidence outlined below in Table 11‑B to assess the Provider’s performance. Table 11‑B: KPI 3 - Measures of Quality and Assurance

Provider performance will be measured against an overarching benchmarked single performance score at an Employment Region level. The Department has set individual benchmarks for each Key Performance Indicator, each of which contribute to the overarching benchmark single performance score as shown in Table 11‑C.

Table 11‑C: Key Performance Indicator Weightings and Benchmarks

Providers should use the KPI benchmarks to identify where they are performing well, as well as any areas for improvement.

The overarching benchmarked performance score at an Employment Region level will be the basis for determining which providers are in scope for business reallocation. The Department may also consider performance in relation to individual KPIs during business reallocation and in regular performance discussions.

The Department may adjust these benchmarks at any stage.

To maximise the opportunities available for Participants, the Department may invite Self-Employment Assistance Providers to:

• hand Small Business Coaching Places back, where the Provider considers these Places will not be used by the end of the Financial Year, and/or

• request additional Small Business Coaching Places, where the Provider can demonstrate demand for Small Business Coaching Places are greater than their current allocation of Places at an Employment Region level.

The Department will Notify the Provider of the relevant dates for the handback process each Financial Year.

The Department will assess written requests from Self-Employment Assistance Providers that propose to use any handback process to:

• move Places between their Employment Regions, and/or

• handback or move Workshops, Business Health Checks or Business Advice Sessions places.

(Deed Reference(s): Clause 107.5)

The Department will undertake a business reallocation process on an annual basis following the end of the Financial Year (based on performance as at 30 June). Providers will be advised on their place allocations following the assessment period.

The business reallocation process may result in Places being reallocated from poorer performing Providers to higher performing Providers. Where Places are reallocated, the changes will apply to the allocation of Places each Financial Year until the Deed Completion Date. The business reallocation process will impact the Provider’s allocation of all Places (including for Workshops, Business Health Checks and Business Advice Sessions).

Following the completion of the business reallocation process, the Provider’s allocation of Places for Services other than Small Business Coaching will be in accordance with the following ratios:

• for Workshops, 30% of their number of Small Business Coaching Places

• for Business Advice Sessions, 40% of their number of Small Business Coaching Places

• for Business Health Checks, 20% of their number of Small Business Coaching Places.

The Department has absolute discretion in its allocation of Places and may deviate from the above ratios to better achieve the Objectives of Self-Employment Assistance.

Poor performance may lead to a Provider receiving a Notice from the Department to discontinue providing the Services.

(Deed Reference(s): Clause 107)

Right of Reply

The Department will formally notify Self-Employment Assistance Providers subject to a reduction in Places and they will have the opportunity to submit a ‘right of reply’. The ‘right of reply’ may describe:

• labour market or geographical factors that affected performance, or

• extenuating circumstances that may have affected their ability to use their Places. Extenuating circumstances are outside the Provider’s control, have not affected other Self-Employment Assistance Providers and are not situations internal to the Provider’s organisation.

Providers that elect to submit a ‘right of reply’ will need to include strategies for responding to these challenges in their submission.

Providers will have 5 Business Days from notification to submit a ‘right of reply’ for the Department’s consideration.

The Department’s decision to reallocate or not reallocate, Places based on a ‘right of reply’ submissions will be final.