Major shake-up on the cards for Eskom workers – including performance incentives

 ·27 Mar 2024

Eskom’s board is taking steps to fix the utility’s dysfunctional organisational culture, including implementing performance incentives that it hopes will improve the performance of its power stations.

According to Eskom chairperson Mteto Nyati, the utility’s board has used the last 18 months to gain a deeper understanding of the systemic challenges faced by Eskom.

One of the significant obstacles identified is the organisational culture, which Nyati described in an interview with CNBC Africa as unhelpful and dysfunctional.

There are several issues that plague Eskom, including a debt of over R400 billion, criminal activities within the company, unreliability of its operations, and constant leadership changes.

The problems with Eskom’s culture and employee morale were of particular concern to Nyati, as these issues have led to the utility’s erratic performance and the increase in criminal activities.

The chairperson commented on Eskom’s staff problems following a report by the German consultancy group VGBE Energy.

The report found Eskom’s staff to be frustrated and unmotivated, and they were working in a blame-shifting environment characterised by indifference and ignorance.

The report also highlighted that Eskom does not have a system in place to reward good performance, which leads to a lack of motivation among the staff to work harder and achieve better results.

The experts who conducted the report urged Eskom to modify its corporate culture and advised it to introduce a reward program to promote good performance at an individual level.

For instance, power plants could be given a bonus if they can decrease their losses by a certain percentage.

Another incentive could be to offer free accommodation for Eskom employees in close proximity to the power plant.

According to Nyati, Eskom’s board has devised a plan to address the problems and will put into effect some of the recommendations suggested by the VGBE team.

He stated that during the investigation, they identified instances where leaders were not leading and managers were not managing, indicating that the people in those positions were unsuitable.

Nyati emphasised the importance of placing individuals who are knowledgeable about Eskom and coal-fired power stations in key positions in order to lead the organisation.

The goal is to find individuals who have experience in this field, as this will help improve overall employee morale, he added.

To encourage the right behaviour, the embattled power utility plans to implement incentive structures.

Nyati mentioned that the team will work together to create a culture of accountability and discipline, although it is unclear whether this will include bonuses, which Eskom has not paid out since 2017.

However, these recommendations fail to acknowledge that, despite any current proposals or plans, Eskom staff had already secured a 7% wage increase in June 2023 through negotiations with their employer.

This salary increase was pushed through even though Eskom has reported a massive loss of R23.9 billion for the 2022/23 financial year.

Concerningly, in a presentation to Parliament’s Public Enterprises Committee, Eskom said it is forecasting a loss of R23.2 billion for 2023/24 – exacerbated by a huge escalation in load shedding, mounting municipal debt and skyrocketing losses due to criminal activity.

Read: Ditching coal will never work for South Africa, says Mantashe

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