This unit describes the skills and knowledge required to establish a Performance Based Contract (PBC) performance measures hierarchy. It includes conducting a performance measures workshop, establishing the individual performance measures, establishing the individual payment curves for performance measures, analysing and assessing the agreed performance measure hierarchy.

This unit applies to administrators or managers working within the contract management field in Defence but may be applicable to any individual in this field of work.

The skills and knowledge described in this unit must be applied within the legislative, regulatory and policy environment in which they are carried out. Organisational policies and procedures must be consulted and adhered to.

Those undertaking this unit would work within a team, with limited supervision while performing complex tasks in a range of contexts.

No licensing, legislative or certification requirements apply to this unit at the time of publication.

ELEMENTS

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1

Conduct a performance measure workshop

1.1

Assess list of stakeholders required to define the performance measures

1.2

Gather and collate candidate performance measures from a workshop

2

Establish the individual performance measures

2.1

Define key characteristics of the different type of performance measures used in PBC

2.2

Assess whether individual performance measures from the list of candidate performance measures are required in the PBC as strategic performance measures, key performance indicators or system health indicators

2.3

Establish the process for operating the performance measure, including application of business rules

2.4

Assess the averaging technique applied to the performance measure

3

Establish the individual payment curves for performance measures

3.1

Establish the performance levels for each performance measure, including the upper, mean and lower levels

3.2

Establish the payment curve for each performance measure

3.3

Apply weightings to each key performance indicator

4

Analyse and assess the agreed performance measure hierarchy

4.1

Implement the established the performance measures

4.2

Assess coverage of the performance measures against the Key Result Areas (KRA)

4.3

Determine and assess the risks associated with each of the performance measures

4.4

Prepare a performance measure hierarchy report

Evidence required to demonstrate competence in this unit must be relevant to and satisfy all of the requirements of the elements and performance criteria on at least one occasion and include:

applying weighting to key performance indicators

assessing Key Result Area (KRA) coverage of performance measures

establishing an effective performance measure hierarchy

establishing performance requirements for performance measures

gathering and analysing data

identifying statistical requirements for Performance Based Contracting (PBC).

Evidence required to demonstrate competence in this unit must be relevant to and satisfy all of the requirements of the elements and performance criteria and include knowledge of:

applying PBC principles

effective communication techniques

management and coordination of staff and stakeholders

management of stakeholder expectation

managing meetings and workshops

performance measures hierarchy and their role in PBC.

As a minimum, assessors must satisfy applicable regulatory requirements, which include requirements in the Standards for Registered Training Organisations, current at the time of assessment.

As a minimum, assessment must satisfy applicable regulatory requirements, which include requirements in the Standards for Registered Training Organisations, current at the time of assessment.

Assessment must occur in workplace operational situations where it is appropriate to do so; where this is not appropriate, assessment must occur in simulated workplace operational situations that replicate workplace conditions.

Assessment processes and techniques must be appropriate to the language, literacy and numeracy requirements of the work being performed and the needs of the candidate.

Resources for assessment must include access to:

a range of relevant exercises, case studies and/or other simulations

relevant and appropriate materials, tools, equipment and personal protective equipment (PPE) currently used in industry

applicable documentation, including workplace procedures, regulations, codes of practice and operation manuals

acceptable means of simulated assessment.

Foundation skills essential to performance are explicit in the performance criteria of this unit of competency.

Range is restricted to essential operating conditions and any other variables essential to the work environment.

Non-essential conditions may be found in the Companion Volume Implementation Guide.

Not applicable.

Performance based contract