30 October 2019
Bridget Morison
[FYI request #11431 email]
Dear Bridget
Your Official Information Act request, reference: GOV-002073
Thank you for your email of 10 October 2019, asking for the following information under the Official
Information Act 1982 (the Act):
An updated copy of the “Guidelines for Performance Management of ACC Providers”
Updated copy of Guidelines
Please find attached a copy of the “EPM Performance Management Guidelines - March 2018”. This
document is generic and applies to all contracted providers including mental health providers.
Also, available on ACC’s website is the “Integrated Services for Sensitive Claims (ISSC) Operational
Guidelines” and “ACC’s Standard Terms and Conditions”, which includes how ACC manage performance
and relationships with providers. These documents can be found via www.acc.co.nz under Resources.
Any queries
If you have any questions, you can email me at [email address].
Yours sincerely
Emma Coats
Manager Official Information Act Services
Government Engagement & Support

EPM Performance Management
Guidelines
A Guide for the Management of ACC
Contracted Suppliers by Engagement
and Performance Managers
Haydn Gwil iam

Performance Management Guidelines
March 2018

Scope of the Performance Management Guide
Accident Compensation Corporation (ACC) operates in a dynamic commercial and technical
environment. Effective procurement planning, management and monitoring of Supplier
Performance is critical to controlling both the risks and costs involved in Procurement, the
management of Supplier Relationships and achievement of intended contracted outcomes.

This Guide has been developed to provide information on Performance Management related
to post-award activities of Supplier management for Engagement and Performance
Managers, i.e. once a Contract has been established through a Strategic Sourcing process.
Given the dynamic and complex nature of Performance Management, this document should
be read as guidance only; it should not be interpreted as a script.
Who does the Guide apply to
This Guide is for Engagement and Performance Managers’ (EPMs’) management of
Contracted Suppliers. It does not apply to non-contracted or regulated PSD providers.
How should this Guide be used
This Guide should be read in conjunction with the following documentation:
•  The relevant Supplier’s Contract
•  ACC’s Procurement Policy http://thesauce/resources-and-tools/policy-
legislation/corporate-policies-a-z/procurement/index.htm
•  ACC’s Provider Management Framework http://thesauce/resources-and-
tools/methodologies-lifecycles/procurement/manage-providers/provider-management-
framework/index.htm
•  ACC’s Classification Tool for Providers, Suppliers and Third parties
http://thesauce/resources-and-tools/methodologies-lifecycles/procurement/manage-
providers/provider-management-framework/index.htm
Performance Management Principles
Supplier Performance monitoring is a fundamental aspect of good Contract Management
that ensures the actual service received is in accordance with agreed service standards and
prices as defined within the Contract. This is a fundamental element for delivering and
managing the expected value from any Contract.

The ability to measure the Performance of a Contract and provide effective feedback is
critical to a successful Supplier Management process and a Supplier’s development during
any Contract lifecycle.

The Performance landscape for Suppliers should be viewed and managed holistically and all
aspects of Supplier activity be taken into consideration when making assessments or
judgements on Performance. It should not be limited to Performance Measures alone as
these can be poor indicators of Performance if they are not aligned to the contract
deliverables or intended outcomes.
Accident Compensation Corporation
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Performance Management Guidelines
March 2018

Effective Supplier Performance Monitoring and Management involve:

•  Regular forum(s) to discuss the Supplier’s Performance and obligations on both
parties
•  Regular checks that a Supplier’s Performance is meeting agreed standards and
contractual obligations
•  Regular checks that the supplied goods or services meet the required specification(s)
•  Checks to ensure Contract conditions and clauses are being delivered or adhered to
•  Non-compliance and Breaches of Contract to be acted upon and addressed quickly
•  Advice to the Supplier on any aspects of Performance that fall short of expectations
•  Timely action on issues or problems as they arise
•  Systems and processes that capture and consider Stakeholder feedback
•  Having accessible records of Supplier engagement and access to good
data/reporting on Supplier Performance to inform decisions and discussions
•  Regular inspections or reviews of compliance to applicable Legislation and Contract
conditions, Quality provisions, Health and Safety etc. are carried out (this can include
external Audit or Review by a third party).
It is generally accepted that Performance Measurement can be an expensive and time-
consuming activity, and as such should be carried out on a selective and prioritised basis,
proportionate to the value and importance of the Contract to ACC. This is particularly
important when time and resources are limited.

In line with the requirements detailed within the ACC Provider Management Framework
contracts of high value or high risk (Tier one) should be closely monitored, involving regular
meetings / reports and review. Information from these engagements should be made
available to key Stakeholders on a regular and cyclic basis to ensure transparency/visibility
on Performance and service delivery.

It is important to remember that ACC’s clients should be at the centre of “what we do” so
effective Performance Management should keep this in mind and seek the best outcome for
ACC, our clients and Suppliers.

Performance Management Principles:
•  Be honest and open – good Performance Management relies on good relationships
•  Be transparent – communicate in an open, clear manner
•  Keep it simple – keep the emphasis on development and Performance, and keep the
paper work and process simple
•  Keep in touch – use mini-reviews or engagements (monthly meetings or calls) to
build towards a Performance Review or discussion
•  Let Suppliers know how they are doing – give regular, timely feedback, either
motivational, formative, or both
Accident Compensation Corporation
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Performance Management Guidelines
March 2018
•  Get the right tools for the job – make sure that the resources (including people i.e.
Legal/Finance/Health) are in place to help you run any process if technical support is
required
•  Enable Suppliers to demonstrate or discuss Performance Improvement requirements
•  Suppliers like to perform, to be praised, and to know that their contributions are
valued.
They perform, ACC performs – remember, the Performance of the Supplier reflects
on ACC and the service or quality of outcomes provided to our clients.
Working with Challenging Suppliers
Challenging Suppliers
Handling challenging Suppliers is often, in itself, quite a challenging thing to do. However,
these types of Suppliers need to be managed, ensuring any problems are addressed before
they result in bigger issues, that may affect or impact the supply chain, ACC’s clients,
customers or the Contract’s intended outcomes.
Suppliers can become challenging for a variety of reasons, these may include:
•  Not understanding the Contract or scope of its requirements
•  Financial pressures within their organisation
•  Personality conflict(s)
•  Loss of other service contracts
•  Changes in key personnel or internal contract resourcing

There is no science to why a Supplier may become challenging to deal with, many things
can influence Supplier behaviour, however, the approach to dealing with such an issue
should be considered in line with the principles outlined below:
•  Be mindful of how you communicate and be specific
•  Remain calm and listen
•  Separate the Supplier (or person) from the issues at hand
•  Try not to issue new deadlines or ultimatums that could appear unreasonable
•  Make meetings and engagements meaningful.
In most cases you need to try to find out and understand why the Supplier is being
‘challenging’. Is there a problem that can be sorted out? Has there been a breakdown in
communication? Are there steps or actions that can be undertaken to resolve the issue?
Understanding these fundamentals allows for a specific focus on the issue and tailoring of
the conversation to adapt and avoids any conversation being clouded or diluted by other
matters raised during discussions.
Accident Compensation Corporation
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Performance Management Guidelines
March 2018
Holding Performance Discussions or Managing a Performance
Improvement Process

Holding a Performance discussion or managing a Supplier through a Performance
Improvement Process (PIP) can be the most challenging part of any Performance meeting,
as you may be talking to items or actions that make the Supplier feel uncomfortable.
If you need to engage in potentially challenging discussion(s) with a Supplier about their
Performance during a meeting, keep in mind one of the key principles of being open and
clear, during the conversation.  Ensuring that discussions adhere to the Performance
management principles allows all issues to be put on the table, enabling debate, discussion,
resolution, and planning.
Another key aspect to any Performance discussion is the issue of “closure” as the meeting
must accomplish something.  In order to ensure the Performance discussion achieves the
desired outcome, decisions on what the outcome(s) are, need to be made.
Once you have this you can then design a strategy that can put closure to any issue(s) with
a plan to address identified Performance shortcomings.
‘Closure’ means there will be a specific agreement about what will be done, by whom, and
when it will be completed.
Preparation for Performance meetings will be a key to success.  Ensure you have your facts,
information and examples.  Plan and know your key messages and practise your delivery if
you have to.
It’s equally important that during these meetings that you identify and emphasise what
contributes to good Performance as this can often help and aide the conversation towards
achievement of the required outcome(s).
Before the Conversation
Give the Supplier notice, and set clear expectations for the conversation. Nobody responds
well if they feel ambushed or cornered. Notice can be as simple as highlighting it as a
specific item on the agenda for discussion.
Be fully prepared and ready to discuss the facts of the particular Performance issue,
consider the potential solutions rather than focusing on the problem.  In any Performance
discussion it is critical to describe the impact of the problem at the individual, team or
organisational level(s).
Being fully prepared ensures a clear focus on the issue at hand and any agreed resolution or
actions are aligned to an outcome.  It allows the focus to deal with the facts to resolve the
issue with all parties and understand the impact of non-resolution.

The Performance Conversation
It’s important that the process and subsequent conversation for managing Performance
improvement(s) starts with the facts.
During any Performance discussion, delivery and timing of the messages you want to
communicate is important.  You are potentially delivering a message that may provoke a
number of possible reactions from a Supplier, including challenging your message. Given
this, consider where Performance messaging is placed within a conversation to ensure the
best possible outcome for the meeting.
Accident Compensation Corporation
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Performance Management Guidelines
March 2018
For example:
First time failure of a Performance measure: may warrant a general discussion and form part
of a pre-arranged meeting or agenda
Repeat failures of a Performance measure: may warrant a separate conversation or meeting
outside of any pre-arranged engagement.
It’s important that during the Performance discussion your concerns are outlined politely,
concisely and directly to ensure no misunderstanding, along with examples to authenticate
your message.  Additionally, explain the need to have concerns dealt with in a manner that
serves the interests of all stakeholders (which includes the Supplier), you, ACC and clients
who are the recipients of their work.  Listen carefully and discuss the issues, to establish
what the root causes of under-Performance are and clearly identify the desired standards or
Performance improvement(s) needed.
The best way to provide feedback is for it to be straightforward and simple.  Focus on the
key themes throughout your conversation and don’t stray off into other areas; you’ll risk
diluting the messaging on your main points/issues.  It’s important you seek feedback from
the Supplier on the facts, and specific behaviours to ensure mutual understanding of the
Performance issues.
During the conversation, seek agreement from the Supplier about the facts, root causes and
Performance improvement(s) needed.
Get the Supplier to identify steps towards making the desired Performance improvement and
guide their thinking towards a solution(s), (as needed). If the Supplier has no insights to the
problems, then it may be up to you to suggest and establish the plan needed for
improvement.
Stay on message; this is your opportunity to set the agenda so stay focused on what you
want to deliver.  When indirect issues come up, decide whether they should be explored
during the meeting or a new meeting set up to discuss them.  This will keep the meeting
moving and focused on the key points.
Set a future date to review progress against any agreed action(s) or steps required to rectify
the Performance issue.
Agreed action(s) or activities should be recorded and form a record of conversation, so both
parties are clear on discussion and agreed action(s) or activity(s) to address the issue at
hand.  It’s important to keep accurate records of conversations, so any future discussions
are in line with previous discussions.  These records should be stored in CRM/Ariba.
Agreed action(s) activities or notes from the meeting should also be provided to the Supplier
for their records.
Example of a Conversation:
Scenario: Lack of Staff Coverage- as a result, no Psychologist available for a prolonged
period of time to assess clients. Impact is increase in costs for weekly comp.
A conversation such as this may take the lines of:
“Having no Psychologist available to assess clients for a prolonged period of time has led to
increased durations for clients and increased costs, such as weekly compensation. This was
raised by an ACC Case Manager as an issue in service delivery. This raises a concern to
how you interpret and understand the contract on minimum staffing requirements and your
notification processes’.
Accident Compensation Corporation
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Performance Management Guidelines
March 2018
The above has clearly outlined what the issues are:
1.
ACC was not advised of the unavailability of a Psychologist, which impacts service
delivery
2.
This has potential impacts on clients and where applicable on weekly compensation
costs
3.
There are concerns regarding the Supplier’s understanding of the agreement and
requirements to notify ACC
Any Performance discussion must solely focus on the facts, and without emotive influences.
Discussions should be clearly focused on achieving an outcome or action that will address
the issue and ensure the best outcome for ACC and its clients.
It’s important to listen to the Suppliers point of view and understand what has occurred, and
allow them to propose the solution or resolution.  For example just noting that they will notify
us next time may not address any underlying issues that exist, so it is important to
understand their internal  processes and procedures related to notifications in the first
instance.
Some helpful guides to Performance Discussions:
•  Suggest objectives for the meeting (i.e. Define “success” before you meet (what do
you want to achieve by the end of the meeting)
•  Identify and review the Supplier’s Performance versus contracted expectations
•  Identify areas of fully satisfactory or superior Performance (where Expectations have
been met) Positive feedback
•  Identify areas of under-Performance, with examples.  Identify the gap between
expectations and actual Performance.  Identify what impact this has on ACC/clients.
A Supplier cannot be expected to improve if they do not know what the areas of
under-Performance are
•  Obtain mutual understanding that something has to be done to improve Performance
and close the Performance gap
•  Provide a clear message that you want the Supplier to succeed, and that you are
there to help them do so
•  Identify any training or other support mechanisms available to assist the Supplier
•  Set objectives and timeframes for improvements.  Develop a “go forward”
Performance plan with milestones and tangible actions. This may require a
subsequent meeting to finalise any training, coaching or other activities designed to
help the Supplier
•  Decide on the necessity and schedule follow-up meetings to review progress against
the plan
•  Establish the framework and tone for any future Performance meetings.

Accident Compensation Corporation
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Performance Management Guidelines
March 2018
Performance Management Guidance
Performance measurement and holding Performance discussions can be complex and is not
always a straight forward process, there is no ‘magic formula’ for Performance reviews,
discussions or conversations that will work in every case.
The diagram below (diagram A) is designed to outline suitable response(s) to a particular
Performance issue(s), it’s not designed to be exhaustive but provide guidance on the type of
response appropriate to the Performance issue(s) at hand. Please refer to the Performance
Management tools section of Diagram A for guidance of the response type. The working
document with active links can be found (Performance Management Tools)
If you are unsure to the best approach for any particular Performance issue consult with your
Manager to ensure ACC’s response remains appropriate given the issue and circumstances
at hand.
Additionally, it’s important that we view Supplier Performance on a rolling basis, to ensure
consistent delivery of services and alignment to Contract outcomes.
Some key points to keep in mind when looking at a performance issue may be:
•  Is this the first failure of Performance measure(s)?
•  Are there any repeated failed measures from the previous period, if so what may be
causing the failure?
•  Is the failure of a significant percentage when compared to their peers?
•  Are the failures of significant concern to believe that patient care may be
compromised and in turn our clients may not be receiving value or outcome related to
the cost of services?
•  If the Supplier is consistently meeting the measures, understand how they are
achieving this. This is useful insight and may be useful when helping other Suppliers
improve their Performance.  It may pay to ensure that they are capturing and
recording the information consistently in line with the measure requirements and their
peers.

Key Notes for Diagram A:
•  Performance should be addressed and considered on an ongoing basis, taking into
account recent and previous periods of Performance
•  These guidelines below apply to all contracted Suppliers, and thresholds noted for
Performance Measures are provided for guidance only, they should not be read as
absolute numbers.  Consult with your Manager if unsure
•  If a Supplier reaches or is escalating to a Stage 3 response, ensure you EPTM is
informed throughout this process and  consideration should be given to the
appropriate response for the circumstances at hand
•  Talk with your Manager and other Subject Matter Experts’ as noted within Diagram A,
before initiating any Stage 2/3 response
•  Service Measures relate to other obligations (not Performance Measures) contained
within the Contract. Example: requirement to notify ACC of staffing changes

Accident Compensation Corporation
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DIAGRAM A

Performance Management Guidelines
March 2018
Performance Management Tools
Decider /  Discuss with /
Example scenarios
Tool
Description
Inform
Links
Documentation
who signs it
consult
• First occasion of a performance report/data not being provided
Education tracker if a
• Relatively isolated issue of performance objective not being met, e.g.
Explanation of requirements and/or
formal education session
for the first time or <5%
Education
formal education session(s) with the
EPM
NA
NA
Resources
• Generic case owner or client feedback
provider to correct behaviour.
• Contract compliance issues affecting processes but not impacting
CRM/Ariba
client(s), service delivery, safety or security
• Failure to notify of incident/breach which had no significant impact on
client(s), service delivery, safety, or security
This is a written “line in the sand” and
Template
•
summarises the issue(s) to date. It must

A performance measure is not met for the second time, or it is not met
for the first time by 5-15%
mention the standard expected:
•
• Relevant clauses from the contract

Multiple performance measures are not met by <15%
Letter of expectation
EPM
NA
EPTM
CRM/Ariba
•
• Reference from the Treatment

Second occasion of a performance report not being provided
Provider Handbook
Exemplars
• Other relevant policies or standards
(e.g. professional body).
• Service delivery issues require improvement due to their risk to quality
of service provision and/or client outcomes, safety or security.
A structured plan signed by both parties
Template
CRM/Ariba
• An issue has not resolved or met the required standard after a letter of
that outlines areas for improvement. Must
expectation
mention the standard to be met and how
Performance
• Multiple performance measures are not met by >15%
progress will be monitored and measured  EPM
EPTM
NA
Weekly report at the
Improvement Plan (PIP) and by who. Include clear timeframes for
outset and then as a
• Performance against contractual performance measures is not meeting
improvements and mention the
Exemplars
success or at the next
the required standard and has not resolved after a letter of expectation
consequence of not meeting the standard.
action or milestone as
relevant.
• Failure to notify of incident/breach with significant impact on client(s),
service delivery, safety, or security.
Clearly state that it is a breach of our
Consider:
Template
CRM/Ariba
• Occurrence of an incident/breach with significant impact on client(s),
Standard Terms and Conditions and/or the
Breach letter
EPTM
Legal Services National Issues
service delivery, safety, or security.
Service Schedule. Must set out the
Manager
• Supplier does not achieve objectives of PIP
clauses relevant to the breach.
Exemplars
Weekly report (as above)
• Supplier accreditation lapse.
This tool is not relevant for all of our
Contract
Template
CRM/Ariba
Contracts.
Administrator
• A supplier needs to take on no new work while they are working on a
Letter is essentially putting the contract
Portfolio
PIP, so they can focus on achieving performance improvements in their
Notice of Suspension
EPTM
Legal Services
Exemplars
Weekly report (as above)
on hold and stopping any referrals. Clearly
Manager
current workload/caseload.
state the clause from our Standard Terms
National Issues
and Conditions and/or the Service
Manager
•
This tool is not relevant for all of our

An individual provider is not appropriate to deliver services but the
Contracts.
Contracts
issue affecting the provider doesn’t affect the supplier organisation more
Template
CRM/Ariba
Clearly state the clause from our Standard
Administrator
broadly.
Removal of Approved
Terms and Conditions. This is generally
EPTM
Legal Services
Provider Status
•
used to allow time for improvements to
Consider:

A PIP relating to a single supplier has not resolved the performance
be made, or for mentoring or clinical
National Issues  Exemplars
Weekly report (as above)
issue.
oversight to address an issue
Manager
Contract
Must mention the termination if made in  Manager
Administrator
• Supplier does not remedy a breach of contract.
Template
CRM/Ariba
accordance with the Standard Terms and  Health
Portfolio
Termination of Contract Conditions. Ensure you briefly cover the  Procurement
Manager
issues and the steps covered to the point  &
National Issues
•
Acci The
dent suppl
Co i
mer has
pens de
atifraude
on C d A
orpCC
or.ation
that termination was applied.
Contracting Page 10 of 1 M
3  anager
Exemplars
Weekly report (as above)
Manager, SPP

Performance Management Examples

The below examples are not exhaustive and should be used as guidance only:
Example 1
Supplier A has returned their Performance report for Q1 and this contains a failure of a
Performance Measure by 4% or less. As this is the first failure of a Performance measure
and the failure is less than 5% no action is required at this stage given the failure can be
considered minor and education and guidance should be provided.
In the Q2 the same measure as Q1 is failed again by 2%, in this instance it is now a repeat
failure, however given the failure is again less than 5% the response should escalate to a
further discussion with the Supplier on how this can be rectified.
In Q3 the same measure is failed again by less than 5% and an additional measure has also
been failed by 13%.  Given the failure of the same measure in Q1, 2 and the additional
failure of a measure in Q3, the response should now escalate to a meeting or discussion
with the Supplier on achievement/rectification of the Performance measure(s), followed by a
Letter of Expectation as these failures of Performance measures can now be considered as
multiple.
In Q4 the same measure that was failed in Q1, 2, 3 is again failed in Q4 by 5% or less.
Given that the last activity in terms of our response was a discussion or meeting on
rectification and we have again seen failure, the response should now escalate to a formal
Performance Improvement Plan (PIP) to rectify the repeat failures.
As Supplier A is now on a formal PIP process this should be managed and tracked to ensure
closure of the identified actions of activity. Should any failures occur following the PIP
process the escalation should increase to the appropriate stage three response.

Example 2
Supplier B has returned their Q1 Performance data with one failure of a PM by 3%, this is
the first recorded failure of a PM for the Supplier, however given the failure is greater than
5% a meeting or discussion should take place with the Supplier on rectification of the
measure.
In Q2 all Performance Measures were met, so no action is required.
In Q3 all performance measures were met, however you discover that there was a Privacy
Breach in the same circumstances as a previous breach, for which a letter of expectation
was issued. Following investigation and given the nature of the event, a PIP was
implemented to mitigate any further occurrence, given that the expectation expressed after
the first breach was not met.  (i.e PIP is for breach, not performance against measures)
In Q4, the Supplier fails two different PMs from Q1 by 4%, taking the tally of failed measures
in the last year to 3. Although the failures could appear trivial in nature given the small
amount at which there is recorded failure, a discussion or meeting should still occur on the
basis of multiple failures. Additionally, as the failures are not within consecutive quarters no
Letter of Expectation is required at this point, however should there have been a third failure
within Q4 or the initial failures were >5% a Letter of Expectation or PIP should be considered

Additionally given there was a privacy breach during the period, this should be taken into
account when deciding upon any course of action.
Example 3
Supplier C has provided their Q1 reporting over 3 weeks late for the second consecutive
quarter. Due to the repeated delay a Letter of Expectation would be appropriate.
Q1’s performance measures were both failed by 15%. In Q2, the same measures were failed
by 25% and 33% respectively and again reporting was late. The delay is now a repeat
failure following a Letter of Expectation. Level 2 and 3 responses should be considered at
this point given the background of letter of expectation due to delay. Discuss this with your
team manager and get legal advice due to the mix and scale of performance issues.

It is important to remember that ACC’s clients should be at the centre of “what we do”
so effective Performance Management should keep this in mind and seek the best
outcome for ACC, our clients and Suppliers.

Accident Compensation Corporation
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Document Outline