SOUTH AFRICA'S most widely distributed & read INDEPENDENT HUMAN RESOURCE PUBLICATION
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News & Views SOUTH AFRICA'S most widely distributed & read INDEPENDENT HUMAN RESOURCE PUBLICATION
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| ================================================= Equity Skills News & Views Volume 3, Issue 4, February 25, 2004 Registered as an electronic newspaper ISSN 1684-5722 ================================================= In this edition: 1. Portfolio Thinking: Performance Management in the New World of
Work Please add equity skills news & views to your list of approved senders if your Internet provider, or server administrator filters incoming e-mail, to make sure you receive periodic e-mail alerts and this newsletters to which you are subscribed.
------------------------------------ ------------------------------------ ------------------------------------ SOUL OF BUSINESS CONFERENCE ------------------------------------ 2-day event to learn from thought leaders & organisations playing a pioneering role as social change agents. Confirmed speakers include Taddy Blecher, Cida City Campus co-founder; Rabbi Warren Goldstein, co-author of the book African Soul Talk: When Politics is Not Enough; Paul Hollesen, Social Development Manager, Anglogold; Wayne Visser, author of Beyond Reasonable Greed. Date: 9&10 March, Sunnyside Park Hotel, Joburg. Call Lizzy (011) 880-9749 or register online www.qualitylife.co.za/events.asp ================================================= 1. Portfolio Thinking: Performance Management in the New World of Work* By Patricia A. McLagan who can be contacted ================================================= Every business is churning today. It makes it difficult to both articulate strategy and to bring strategy to life. Think about it!! We have entered the new millennium, and the workforce is now a blend of more traditionally trained baby boomers, in-your-face Gen X-ers, multicultural, semi-literate people from disadvantaged backgrounds and areas, and techies raised on computers. Workplace talent requirements are increasingly emphasizing technical skills, flexibility, continuous learning, teamwork capacity, and communication skills. Jobs go begging due to the mismatch of skills and needs. And, all this is happening while the old models of "employment for life" lie in shards on the floor of virtual offices, downsized organizations, and globally shifting distributions of work. Key questions – questions this article addresses – include "how can we manage people FOR the New World of Work?" "How do we align a diverse workforce – which may not even work directly for the company – behind a constantly shifting set of business goals and strategies?" And, more than this, "Is it possible to turn the churn into competitive advantage?" 2. Traditional Performance Management: A Dead End We can’t just go back to the "good old days," or introduce a new version of Performance Management, job descriptions, or command and control methods. Traditionalists would tell us to toughen up on the back end. Make performance appraisals work – be ruthless, or at least tough on poor performance. Reward the high flyers. Make performance ratings and feedback forms better – more differentiating. Hold managers accountable for the performance of the people they lead. While some of these methods are part of the solution, the exclusive use of back-end methods to drive performance doesn’t work. The best courses in the world, the best HR systems in the world have not been able to create the breakthroughs that the backend, or push approach to performance has promised (over and over again) to deliver. Self-esteem issues, reluctance to judge others or to "parent" adults in the workplace, aversion to manipulation are only a few of the emotional dampers on the most rational of back-end methods A 1990 study by the Brookings Institutions, which asked, "What pay systems have the most impact on performance," concluded something remarkable: "changing the way workers are treated may boost productivity more than changing the way they are paid." (Paying for Productivity: A Look at the Evidence, Alan Blinder, Washington, DC: Brookings Institutions, 1990) Decades ago, J. Edwards Deming concluded that performance appraisal systems created more quality problems than they solved. He and other quality experts made a strong case that systems and process problems were the main causes of performance problems. Individual people, they said, accounted for a small amount of both performance successes and failures. Focus on creating a system and processes that work, and people perform. There is also a lot of evidence that back end methods create special problems. They often discourage teamwork. They can discourage complex thinking (If I am rewarded for making sales, I may sell for today and create an unhappy customer for tomorrow. Or, if I am a credit clerk, whose pay is based solely on the amount of "bad debt" in my portfolio, I may do things that turn away potentially good long-term customers). Most importantly, the emphasis on the backend has turned many people’s focus away from the "front end:" the strategy communication, the negotiation about goals and roles, the team-based creative thinking and visioning that we know affects understanding and motivation over the long haul. Managers in the past often felt that because they "took people through a deck of slides on the strategy" that the strategy had sunk in, that commitment occurred, that aligned action would follow." Because back end management is reactionary, it is easier to focus on. It seems more tangible. Back end management relates to highly charged decisions like pay distributions, or downsizing, so it falls into that "urgent" category that Stephen Covey talks about (Seven Habits of Highly Effective People). Front-end management – like every disciplined thing we do BEFORE we act, often falls into the "important, but not urgent" category. It requires self-energized commitment to do. Therefore, front-end management often falls off the table. It is easier to respond to the current crisis than to take actions today to avoid problems tomorrow. And, usually these backend methods are part of a more "command and control" management style and a more "dependent" worker style. The manager sets goals for people, does the performance appraisals, decides the pay treatments, determines what is exceptional (good and bad) and expected performance. Command and control and dependency may work in a relatively closed system where there is little competition, lots of stability, and a corner on talent. But, today?…….
3. Moving to the Future Management processes that rely on the back end are not the way to create and energize organization capacity in the knowledge era – or any era, for that matter. A recent Gallop survey of 55,000 workers matched corporate performance with worker responses. The findings? Four attitudes related directly to higher profits: # Employees feel they have opportunity to do what they do best every day # Employees believe their opinions count # Employees sense their fellow workers are committed to quality # Employees directly connect their work and the company’s mission ("Happy Workers, Higher Returns, and You Ind.: The 100 Best Companies to Work for in America, Fortune, January 12, 1998 On another track, industry and cross industry studies also show that companies that use high involvement people practices outperform those that don’t. These companies achieve: # 160% more growth in sales (Kravetz) # 400% more growth in profits (Kravetz) # $15,000-60,000 greater market value per employee (Huselid) # 200% more patents (Stern) # 500% more revenue growth, 800% more employment growth, # 1200% more stock price growth, 700% more net income growth (Heskett and Kotter) And, as for why people are attracted to companies and resist poaching, people in the 100 best companies to work for in America (Fortune, January 11, 1999) say they don’t "jump ship" because: # the workplace is fun # there is job flexibility and career change # they are using cutting edge technology # they are doing exciting work # they can advance # they are getting top-notch benefits # there are employee services, like cafeterias, college-planning and home purchase assistance All of this is NOT to say that there should not be control, standards, rigor, or even hierarchy in a business. It is NOT to say that performance feedback, differentiated pay, or management of performance problems are passé. It IS to say that management systems that are based PRIMARILY on backend methods endanger competitiveness. They endanger the firm. Talented people with in-demand skills, leave. Opportunities are sub-optimized or missed. It’s time to make dramatic shifts in how we – all of us, worker, manager/leader, HR professional – align the people in the firm’s economic web. 4. Design and Manage Organizations as Goal-Focused Communities The big message of all this is that "what is between people’s ears" is an increasingly important business asset. And, this asset comes with a variety of rational and non-rational qualities. And, a related message is that an organization is actually a community of people working together. Communities are not easily managed by back end, or push tactics. Peter Drucker has been talking about this for some time. He challenges us to manage organizations as though they are communities of volunteers. But, what does this mean for our initial questions? ("How can we manage people FOR the New World of Work?" "How do we align a diverse workforce – which may not even work directly for the company – behind a constantly shifting set of business goals and strategies?" And, more than this, "Is it possible to turn the churn into competitive advantage?") The overall answer is that there needs to be just enough discipline to get the best organization synergies, and lots of attention to unleashing the creative energies in and around the firm. For some people, this means a radical self-reengineering. For everyone it means balancing personal freedom with the discipline that any community needs to have to optimize itself. For organizations, it means creating the best synergy of front and back end methods – with major energy going now to the front end. Here are some key success factors for aligning people and work in a churning New World of Work: A. Implement personal portfolio management B. Provide individualized coaching toward a partnership style of work and managing C. Use the web and technology to create knowledge management synergies D. Create and maintain a context-creating communication infrastructure E. Reengineer the HR staff job These all require a new mindset about the relationship between people and the organization. They require a pull (more front-end) rather than a push (more back-end) approach to performance and productivity. Let’s see what each of these means. A. Personal Portfolio Management Everybody today is a business within the business. Furthermore, they must manage themselves as committed and responsible adults within their larger economic web. The old view saw individuals as the property of a "boss." But now, most of us are on lots of teams – the formal work team, task forces, quality groups, project teams….. The "boss" as a concept doesn’t work here, for only the individual has access to the full range of his or her responsibilities. Also, in a customer-focused world, it is useful for everyone to think
of work in terms of deliverables. "What do I provide to others that
adds value for customers and this business?" And, "what do I
need in resources, including skills, to be able to deliver the outputs I
am being paid for?" This is portfolio thinking. I provide things. I use resources. I develop. I set and negotiate priorities. I take accountability, keep commitments, and work to high standards. I get feedback from customers/receivers to help me continually ensure the highest value of what I am offering. I am part of a "value equation" where I provide and I receive. I am a business within the business – engaged in an economic, information, and emotional exchange. This applies whether I sweep floors, flip hamburgers, fly airplanes, coordinate production workers, do product planning, sell, do aerospace research, or run a $50 billion company. Portfolio thinking applies whether I have little education, or have a PhD. As a portfolio thinker, I keep aware of what I have delivered and what I can deliver. I work to continually improve my outputs – and to innovate new ones. I watch for shifting trends that may make my deliverables obsolete (technology??). And, I keep my ears open for trends and opportunities that may redirect my portfolio. I also have a heightened awareness of my knowledge and skills, of my own attitudes and values. I see them as my assets, and know that their value is changing constantly. I do a kind of "discounted competency flow" analysis, knowing that the life cycle of knowledge and skills is getting ever shorter. Like a good portfolio manager, I use simple, but effective tools to guide my decisions and actions. These are tools that enable me to set and negotiate goals, identify learning agendas, get and interpret feedback, make tradeoffs as I join new teams, negotiate and stand for the value of what I provide. I use tools that help me look into and prepare for the future, where the mix of my outputs and competencies will shift so I can thrive (not just survive) under the inevitable new conditions. I do not let others control my portfolio or keep its contents and direction secret from me. I get help; I get coaching. I develop the skills I need to be able to manage this important package. And, I expect the companies I work in and with to provide the information I need to keep my portfolio viable. B. Individualized Coaching Toward a Partnership Style Few companies are set up for personal portfolio management. The spirit is there in many entrepreneurial firms. It is there naturally for many Gen X workers. But, most companies, no matter how old, reflect the legacy of pre-internet business: a legacy that is often bureaucratic, slow, and encourages dependency ("boss" and "subordinate" say it all!!). We have a special challenge as we transition to the New World of Work and set the stage for aligned management of personal portfolios. The challenge is to help everyone develop a mindset of partnership to replace the boss-subordinate, dependency-creating view of the world. The New World of Work still requires a "management" function. It still requires executive work to be done. Businesses continue to need strategies, processes, budgets and financial stewardship, coordination of various kinds, mentorship and coaching. Companies continue to need various kinds of hierarchies and role differentiation. But, the definition of all of these is changing. Practices within each of these areas are changing – becoming more open, more participative and two-way, more sensitive to time, stakeholder alignment, and impact on customers and competitiveness. A big job of this management function today is to help formal leaders develop and use management processes that are appropriate for the people they lead, but that also help people learn how to manage themselves and stay in alignment with the business and co-workers. There is no time to waste. Businesses that allow formal leaders – supervisors, managers, executives – to work autocratically, to punish initiative, to pretend to "own" talent, to discourage diversity, to even abuse their rank and power, must make the mandate for change clear. Formal leaders "add value" to people when they help them work more independently and as responsible partners. Supervision and high levels of personal control are expensive (If I supervise you, making you check with me for everything, fixing your problems, requiring you to go through me to others, then it is taking both of us to do your job. This increases our costs of doing business. It is not a good competitive tactic! Individuals and relationships differ. Some start out dependent or even adversarial. Great leaders start where things are and work with people in ways that can most quickly build trust and independence. For the really great coach, everyone whose life they touch, rises to their best, most adult, most contributing self. We need to help all formal leaders develop the mindset and capacity to play this value adding role. C. The Web and Technology for Knowledge Management Knowledge management – accessing relevant information, turning it into ideas and actions, and rapidly making it available to the organization community – is at the heart of aligning people and strategies. It is fundamentally an interpersonal process. Why? Because knowledge has a huge "meaning" component. And meaning is a social phenomenon. Through conversation, we share and create meaning. We test it. Therefore, this and the next point ("create a shared context through a communication infrastructure") But, technology has an enormous role to play. And, that role is very new!! We must be careful not to use it to simply create electronic versions of what we did in the past – electronic versions of performance appraisals, of pay decisions, of information dissemination. There are new possibilities. They include the ability for us to make work far more flexible. We don’t need "jobs" to structure work. We can create menus of deliverables for the entire organization or value stream of a business. These can reflect the most current assumptions about strategies, markets, industries, and environments. As these assumptions change, rather than creating new job descriptions, we change the items on the menu. At any point in time we can use the menu to: help allocate and balance work, communicate about shifts in work and knowledge requirements, develop instant work profiles for use in hiring and in flexible work design. We can also use them as the common language for linking people and projects. Intranets and server-based systems provide the breakthrough infrastructure for these and other menu-driven applications. This is not such a new idea. But, the trick is to design menu-driven knowledge management systems in the spirit of personal portfolio management and partnership-oriented management. Most systems out there today reflect the secretive, more boss-subordinate models of the past. Rather than add value for the New World of Work, they thus prevent the very knowledge transformation they "seem" to serve. D. Context-Creating Communication Infrastructure Here we have the heart of pull management and leadership. Pull methods are methods that appeal to the most energy-creating aspects of people. "Pull" methods attempt to create a "context" within which people want to perform and excel in ways that will optimize the business and themselves. Here we have the heart of pull management and leadership. Pull methods are methods that appeal to the most energy-creating aspects of people. "Pull" methods attempt to create a "context" within which people want to perform and excel in ways that will optimize the business and themselves. Pull methods are the methods that High Performance Companies use and amplify energy and action (see www.StrategyInAction.com for up to date details). Pull methods are often in the "important but not urgent" category. This means that we have to have a commitment to using them, or else they are crowded out by crises – those urgent things that may or may not be important. Author Robert Fritz, (The Path of Least Resistance) tells us that having a vision of what we want to create is the biggest way to motivate and focus action. This is the path of least resistance!! The words "vision" and "want" are key here. The biggest leadership challenge as we enter the 21st century is to create these conditions. Doing this involves at least these things: # Continuous, dialogue-based communication about the big picture # A required, but dialogue-based method of turning context information into personal and team goals # Fear-free feedback, learning, trouble shooting, and innovation Continuous, dialogue-based communication about the big picture. The big picture is the current and projected reality of the industry, markets, technologies, competitive and stakeholder challenges. It is the business strategy and rationale for the strategy. But the key to bringing the big picture to life – bringing strategy into action, is dialogue. It is only through dialogue that people develop understanding. It is only through dialogue that people personalize information. It is only through dialogue that their own experiences can be brought to the table, perhaps to even change the strategies or perceptions of market conditions. Through dialogue we create community – shared meaning. This is the heart of success in a knowledge world, and the only real incentive to aligned action. Traditional methods assume that "if management says it, presents it, puts it in the newsletter, takes it on a ‘road show,’ that action will occur. Anyone experienced in business knows better. Required, dialogue-based goal setting. Goals are one of those not-so-popular issues in organizations. For one thing, people have different personal stances about goals. Some have seldom accomplished what they set out to do. Goals feel like a painful exposure. For others, goals are a protection against flexible action. "That’s not what I agreed to," they may say. For others, it is just hard to see their value in rapidly changing times. Ironically, goals have higher value when things are changing rapidly. This is true because they give us a direction in stormy times, not because they must be preserved at all costs. For a sailor on stormy seas, it is vital to have a point to aim for. He or she may have to tack to adjust to the winds and seas, but having the destination is important for navigation. But, with different information – about a better place to go, or a safer port – the keen sailor will change the goal. Goals are also very important in complex times because as we join additional teams, and as conditions change, we have to make decisions about how to spend our time. These decisions usually involve others. We need points of negotiation ("If I do this, then this will be affected. This will affect you in this way…. Let’s make some new agreements.") It’s all an interactive process – again, conversation; dialogue!! Goals are more important now than ever before. But their role is changing. They are not "gotcha’s." They are not fixed points of commitment. They are points of community agreement. They are points for customer and co-worker agreements. They are swing points for changing direction – but with cause. Goals are also counterpoints to "important/not urgent" and "not important/urgent" work that often monopolizes an individual’s day – after day… Taken seriously they help ensure that important/not urgent work gets done – that people are accountable for them in stormy times. Companies need a rigorous discipline of goal setting and goal management. But the mindset about goals has to change. The view of goals as a bureaucratic, "gotcha" exercise, fraught with paper, has to change. The view of goals as individual must shift to their role in connecting people and commitments, linking everybody to the strategy – accelerating it into action. Fear-free feedback, learning, trouble-shooting, and innovation. Think about the notion of "personal portfolio management." Think about everybody as a business–in-a-business. Businesses and portfolios need feedback. The best of them are learning machines. Now think about what feedback means to most people at work today. It means "exposure," "evaluation," "better/worse than others," "career opportunities lost or gained," "pay and rewards." We have a dilemma. It is a dilemma created by the emphasis on back end management. It is a dilemma created by boss-subordinate relationship structures. And, of course, there is always an element of the personal in any feedback about what people do, deliver, are. Part of the solution to this dilemma is to redefine "performance problem." When you are in a stable, "follow the rules" environment, performance problem may mean project failure, cost overruns, project problems, etc. When you are in a rapidly changing environment with many uncertainties, failures, overruns, etc., are inevitable – the consequences of innovative action, even of so-called "prudent" risk. In the New World of Work, we must stimulate and encourage learning. Failure rates of ideas are actually very high. A failure, per se, is not a performance problem. A performance problem (due to YOU) is something that occurs when you don’t honor commitments, don’t renegotiate, don’t get help when you need to, cover up problems, work as a lone ranger when you should collaborate. Admittedly, the line may seem fuzzy. But the New World of Work requires finer distinctions, more consciousness, more discernment – even as it expects very rapid action. One solution to the dilemma is to stop the practice of "boss as primary evaluator." The team leader or manager is really like a coach or homeroom coordinator. He or she can and must help interpret what happens, but the evaluations of performance? These must come mainly from the people who receive the work. This is the only way to bring customer focus into the any business. As long as the "boss" is the evaluator, the customer will never be the focal point. So, part of the secret of fear-free feedback is to stop viewing failure and project problems as personal performance problems. Another part is to put the evaluation power into the hands of receivers, not the hierarchy. The hierarchy is there to bring quality to the entire process of integrating people and strategy. The hierarchy is there to help develop the personal portfolio management concept. It is there to nurture people to a place where they can and will contribute at maximum. It’s there to ensure that the business has a great strategy, competitive processes. It’s there, too, to take action if performance problems do occur or if people renege on their commitments. But, for bringing strategy into action, the entire notion of feedback must change. This will only happen when people act like little businesses instead of pawns in a personally competitive game within the business. All of these are concerns of a pull, or a front end loaded approach to managing a business. Front-end management and leadership take discipline. But the rewards are tremendous. Think about it. One of the greatest businesses in the world, General Electric Company, has valued disciplined and "personal portfolio management" (they wouldn’t call it that, but it is a version of it) for many years. Companies that score consistently high in key financial and market performance areas also are companies where "people have clear goals, that they have helped create" (Kravetz). GE is a good example of what a blend of front and back end management can create. E. Reengineer the HR Role The Human Resource function is at a crossroads. It is clear that the challenge is to become a business partner. But, what is not so clear is, "How?!" The HR function can be the architect of the changes described so far. Specifically, HR professionals, with their knowledge of people, organization dynamics, learning, and (hopefully) business and finance, can and must: # Work with leaders to establish a participative, high performance philosophy for the people part of the business # Put as much routine HR work as possible into electronic systems and service bureaus: pay systems, people records # Create a menu-based knowledge management structure that is based on a personal portfolio and partnership philosophy (this means rejecting just automating people processes in a system that exudes boss-subordinate relationship patterns) # Eliminate many old mental models: the model of the job as a permanent structure; management work as the only thing to consider in succession conversations (tomorrow’s organization will value many career clusters!! – a consequence of being in a knowledge world rather than an industrial production world); performance management as something that managers control; feedback as a corrective device with zero sum implications (a few win, most lose). # Help people transition from old to new assumptions and skills. The "boss-subordinate" way of interacting has been around for a long time. The Soviet Union is a good example of what can happen to people when this is bred into their psyche. Personal portfolio management and partnership relationships are actually the natural state of a healthy adult. Sadly, we have bred a different psychology into our institutions. HR people must spend the next few years (with business leaders) undoing the damage. We have to help people develop the confidence and courage to bring their best to the workplace. This is an exciting challenge. Hopefully, though, HR people and business leaders will do what is necessary to take organizations beyond this plateau once and for all. This is probably the biggest legacy opportunity for HR people today!! # Provide very simple tools to help people manage themselves and support others. The day of the 100+ page ring binder of policies, procedures, and training is gone. Keep forms to a page or two. Be sure they encourage enquiry, deep thought, and conversation. See the forms of the past as one way people protected themselves. Change the rules of the game!! # Be sure that people who lead others are capable of doing so. Too many people are promoted to influential positions and roles without having the competencies of New World of Work leadership. Leadership is not something that the best salespeople, technicians, idea people are qualified for. In fact, the things that make us great as an individual contributor (e.g., our desire to achieve) can actually damage our ability to lead (we have to do things ourselves). A partnership style of leading is not "soft." It is very disciplined and skilled. It takes commitment, tenacity, evolving knowledge of the business, and a willingness to work with people, processes, and horizontal relationships. It takes skill in dialogue, coaching rather than doing, adapting to diversity, and courage in standing for quality and high performance. Management/formal leadership is a career choice. It is a practice, just as being an engineer, a consultant, a product planner, a salesperson, a procurement specialist is a practice. HR people will not be able to move into the business partner role they aspire to if they do not help formal leaders learn how to lead, and workers learn how to manage themselves. 5. Conclusion It doesn’t matter whether a business is in a highly developed country or struggling in Eastern Europe or Africa. Every business is a global business. Every business is an Internet business. Every business is a de facto player in the New World of Work. Yes, there are adjustments to make based on industry, workforce capacities, markets. But, the decisions are NOT whether or not to enter the New World of Work. Every company in every nation faces the challenge of creating a personal portfolio philosophy and a partnership style of operating. In some ways, this is more difficult in more developed and intellectually complex and nations and businesses. Their very success makes fundamental change difficult. But, no matter where the business, the challenge of accelerating strategy into action looms large. The ideas in this article reflect both personal and survey research. They reflect the author’s experience globally in some of the world’s greatest businesses, and in struggling, transitioning firms. They are the lessons from work with the world’s business thought leaders, and from work with illiterate workers in isolated areas. My conclusion is that the world is both homogenizing and opening to diversity. Management structures have to have both of these features for the future. *Reprinted by permission of the author ------------------------------------ ================================================= By Tom Krattenmaker who can be contacted at http://hbswk.hbs.edu ================================================= No, you shouldn't be broadcasting your employees' salaries. But a new survey suggests that companies need to articulate how pay systems work and how individual compensation packages are determined. The payoff for you? More employees satisfied with their compensation.
Over and over, we're told of the value in today's workplace of open communication, of transparency. Yet there's something critical that, in most organizations, remains top-secret. And that's compensation—specifically, what salaries are and how they are determined. It's in everybody's thoughts, yet rarely on their lips. "It's perceived to be the unmentionable. We're the most open society in the world except for this one topic," says Peter LeBlanc, senior vice president of Sibson Consulting/The Segal Company (New York City). "Companies aren't bringing up the topic of pay, and people aren't seeking answers, because it's verboten." But a new study coauthored by LeBlanc shows that more and better communication about compensation can boost employees' satisfaction with their pay, leading to stronger commitment to the organization, enhanced trust in management, and other benefits. And it doesn't cost much to get these payoffs. The Knowledge of Pay study, sponsored by the human resources professional association WorldatWork, in Scottsdale, Arizona, surveyed more than 6,000 managers and employees from twenty-six organizations in the United States and Canada. The study does not suggest that companies reveal individuals' salaries. But it is telling people to talk about how pay systems work and how individual compensation packages are determined. Companies aren't bringing up the topic of pay and people aren't seeking answers, because it's verboten. # Peter LeBlanc, Sibson Consulting/The Segal Company: "We found at all income levels that the more knowledge our study participants have about their pay system, the more likely they are to be satisfied with their pay and engaged at work," LeBlanc says. "That's pretty powerful." Knowing more about compensation not only made more employees satisfied with their pay, it also fostered work engagement—for instance, it improved retention, employees' commitment to the company, and their willingness to refer friends and family to the organization. This could prove to be a bright note in today's economic climate: It is usually less expensive to improve and communicate a compensation structure than to increase actual pay. 2. It's base pay that matters The study finds that base pay matters the most when it comes to communicating pay information. In a time of increasingly complex pay packages, this might disappoint the many companies that are committing time and dollars to bonus plans, short-term incentives, stock option programs, and the like. Nevertheless, the survey finds that satisfaction with base pay translates more strongly into work engagement than satisfaction with variable pay programs. Thus, organizations intent on doing a better job of communicating about compensation would do well to give the most attention to base pay. Why do organizations guard pay information so jealously, and why—as the Knowledge of Pay study finds—do employees so seldom ask for more information? Largely for the same reason people don't reveal their salaries to one another at cocktail parties. Several human resources and compensation experts interviewed believe the salary opaqueness that tends to prevail in workplaces is due to a long-standing cultural norm that has made pay a taboo subject. Other factors include the old notion that employee pay is the prerogative of top management; a worry that the more workers know about pay systems, the more they'll find to complain about; and management's desire to retain as much flexibility and subjectivity as possible in determining pay. Susan Zelinski-Davis, CCP, manager of employee performance and rewards at the insurance and financial services company Nationwide (Columbus, Ohio) believes companies with sound compensation programs have nothing to gain by hiding them. "Organizations should examine their pay systems and ensure they are well designed, which allows them to be open in communicating about them," she says. "As long as you have sound systems and guidelines, even if there remains some management discretion—and I don't think you can completely remove that—then you should be able to openly discuss pay." Perhaps surprisingly, managers surveyed for the Knowledge of Pay study report that employees ask about pay relatively infrequently. For example, just 17 percent of managers said they are frequently approached by employees with questions about their job grades, and only 15 percent are frequently asked about the consistency of pay practices. By contrast, 40 percent are asked frequently about performance issues. But the study authors are quick to discount a lack of interest as the reason for the relative dearth of questions about pay. More likely, they say, is the perception that such questions are unlikely to yield honest answers and, worse yet, could bring retribution. 3. The cost of silence With pay, as with any other subject, when there is an information vacuum, misinformation usually seeps in to fill it—and this misinformation is often more damaging than the truth. Martin Cormican, manager of compensation and benefits at Swarthmore College, notes that employees, even in highly secretive organizations, are bound to hear rumors about how management sets pay and how compensation compares with that in other (presumably more generous) organizations—even how much so-and-so in the office next door got in her last raise. "People take this information and internalize it, whether it's valid or not," he says. "That makes it more critical than ever for organizations to communicate their pay philosophy and strategy." Human resources professionals believe—and the new survey confirms—that employees are particularly keen on knowing they're being paid fairly relative to their peers inside the organization. Given the potential for the spread of misinformation and the damage to morale that can follow, tight-lipped leaders should ask themselves whether they are truly well served by maintaining silence on pay structures and how various jobs fit into them. Even if employees aren't asking managers for pay information, the study demonstrates that organizations are wise to give it. "You can have a great compensation program, but if you don't tell employees how it works, you're not getting the biggest bang for your buck," says Kay Sandvik-Schmitke, manager of surveys and research for WorldatWork. The new study finds that managers feel significantly less confident communicating compensation information than they do discussing and assessing performance. Whereas more than 80 percent of managers surveyed are either "very confident" or "completely confident" in their ability to give performance feedback and explain performance objectives, only about 40 percent report the same confidence in answering employee questions about job grades, how to move toward the maximum pay in a range, and consistency of pay practices in the company. The conversation can be particularly difficult when managers must explain a below-par raise to a report. To avoid such a conversation, Zelinski-Davis notes, managers are tempted to give proportionally equal raises to everyone. "Many managers tend to spread the dollars like peanut butter rather than allocating more dollars to higher-performing individuals and having to face the challenges of communicatingproportionally smaller raises to average or below-average performers," she says. While this approach avoids a sensitive conversation, it robs management of one of its most powerful motivational tools, and it makes less than optimal use of the company's finite compensation dollars. 4. Communicating about compensation Once they make the commitment to openness about pay, companies can communicate effectively by following several key steps, according to the study authors and several human resources experts interviewed. Organizations typically rely on mass communications—manuals, handbooks, large staff meetings, etc.—to inform employees about pay. But the Knowledge of Pay study suggests that most people find such vehicles ineffective. More useful are personal and interactive approaches, often best performed by an employee's manager one-on-one. The study also suggests that companies can communicate pay information effectively through interactive, individualized e-learning courses conducted on intranets. That doesn't mean it's enough to send one-size-fits-all memos out via e-mail. "In our electronic environment, everything is easily pushed to everyone," says Bruce Lawson, partner and president of the human resources consulting firm Fox Lawson and Associates (Roseville, Minnesota). But with pay information, it really doesn't work. "When it comes to communicating pay information," he says, "people really like personal contact." Answering questions isn't enough, experts say. Managers should initiate the conversation, both in formal meetings and through informal contacts. Of course, for managers to serve well as the principal vehicles for communicating around compensation, they need to be better trained for the assignment than they are now. First, they themselves must learn how the pay system works. Then, managers need to learn to translate the information for their staffs—to use language appropriate to the lay audience and to apply the concepts to an individual's situation "on the ground." 5. Make it relevant Managers can make pay communications most effective by focusing on aspects of the compensation plan relevant to the particular employee. For example, "a company can have different types of bonuses," Sandvik-Schmitke says. "If the bonus program pertains to the employee a manager is meeting with, the manager has got to put that person's line of sight on how the bonus program impacts them." Similarly, a lower-paid line worker ineligible for stock options certainly doesn't need details on that component of the pay plan. The pay conversation with this worker is best devoted to how his raise was determined and tangible ways he can improve his performance to move up in the grade system. Employees obviously will not always like their raises, Lawson says. "But if people understand how you got there, there's a greater likelihood they'll accept the outcome. If I tell you your salary is being cut by 10 percent you're going to be upset. On the other hand, if we started out by educating the work force—maybe the company is having problems, and the alternative to salary cuts is layoffs—then at least you'll understand why the decision had to be made." Key to earning that acceptance is giving employees information about the company's fortunes, which requires treating them more like trusted insiders than an external audience to impress or mollify. It's easy to be open when the news is good. Less common, but just as necessary, is informing employees about problems and unresolved challenges and issues. 5. No more mystery Honeywell Electronic Materials, Sunnyvale, California, a participant in the Knowledge of Pay study, took quick action based on the study findings. Ina Marie Johnson, director of human resources at the 1,200-employee unit, organized a symposium in early August to review the results and how they applied to the company. Typical of organizations participating in the study, employees at HEM were generally satisfied with their actual pay but not with the poorly understood processes by which it was determined. After devoting the first day of the symposium to reviewing the research results and external best practices, HEM spent the second and third days educating managers about the company's compensation system, with the aim of preparing them to communicate more effectively with their reports. "The whole idea," Johnson says, "was to take the mystery out of our pay processes." As a second step, HEM launched in late August a customized, online "Total Rewards Tool." Honeywell employees can now punch in a password to access a Web page that documents their complete compensation package—base pay, bonuses, benefits, etc.—and its cash value. The thought of communicating more openly about pay might cause squirming in the executive quarters of organizations that are used to keeping compensation information close to the chest. But in LeBlanc's view, open and direct communication about compensation is vital to strong employer-employee relations. Employees increasingly expect and desire to be treated less like hired hands and more like integral members of the team; the very act of letting them in on the long-held compensation "secret" can create good will, LeBlanc says. Coupled with that is an economic climate in which management is less able to buy employee happiness through raises. "I can't think of a better time in the last twenty years to reveal more about how pay systems work and compensation decisions are made," LeBlanc says. "There's a lot of retrenchment in pay right now. Maybe you can't distribute more pay right now, but you certainly can distribute more knowledge." * By permission of HBS Working Knowledge: http://hbswk.hbs.edu ------------------------------------ # ONLINE SURVEYS ------------------------------------ People Surveys & Renewal Resources provides online surveys to take stock of your organisation’s performance. Use the the results of a Transform Survey of Organisational Performance to engage your top team in the kind of decision-making that drives meaningful change. Contact Jeff Sacht at js1952@bigfoot.com about your survey guided change requirements. Visit Transform at www.workinfo.com/Renres/practiceareas/orgasses.htm
================================================= 3. Across The Board: Official communication from the SA Board For Personnel Practice (SABPP) By Huma van Rensburg CEO SABPP who can be contacted at www.sabpp.co.za ================================================= A. ACCREDITATION OF SMALL HR PROVIDERS BEING ROLLED OUT Are you a provider of HR courses? Are you accredited with the SABPP ETQA? A small HR provider can apply for accreditation with the SABPP ETQA if you: # Offers learning programmes and / or assessment, which culminates in qualifications or unit standards on the NQF in the primary focus areas of human resources as defined by the Standards Generating Body for Human Resources Management and Practices (SGB for HRMP). # Designs and develops learning materials based on qualification or unit standards that on the NQF. The process of accreditation has now been tested in practice and we proudly announce that the first private provider accredited. As the new ETQA on the block, it has taken us just on a year to get our process up and running. How the accreditation process works: # An application is completed by the provider # A designated member of the Small HR Provider (SHRP) Committee goes through the application with a checklist and generates a report. # This report is tabled at a SHRP committee meeting and a moderator is appointed to confirm the first recommendation and to write a short summary and further recommendation # This is then tabled at an ETQA committee meeting, where the Chairman will verify and sign off on the process. He will then table a recommendation at the next Board meeting that a provider be granted either full, provisional or no accreditation as the case may be. # As there are four Board meetings per annum, final approval for accreditation can be done four times a year. Applications received some two months before a Board meeting may possibly be finalised in time for approval. A quick turnaround time will be something to strive for. # The committee members who are entrusted with the applicant’s information are under instructions to respect the confidentiality of the material and any reports will be regarded as strictly confidential. # Once approved, the SABPP ETQA will issue a decision number, an accreditation certificate and will list the providers on the Board’s website. Our ETQA committee will be tabling accreditation recommendations at each of the four Board meetings per annum. Board meetings remaining in 2004 take place in May, August and November. Applications received at least two months before a Board meeting, may possibly be completed in time to be tabled for a decision if the application is comprehensive and correct. To apply for accreditation, send a Letter of Intent to sabpp@mweb.co.za. We will forward our guidelines, application form and other documents on receipt. The first step in becoming an accredited provider with a primary focus in human resource is to ensure that your skills programmes or short courses are unit standard based. You will find our unit standards on our web site www.sabpp.co.za, click on "Standards Generation" on the right hand side of the screen. If the majority of your courses fall within these unit standards, the SABPP ETQA is the correct ETQA to apply for accreditation.
# All training providers seeking accreditation with the SABPP ETQA must send in a Letter of Intent to Accredit and request and application form to sabpp@mweb.co.za. # Complete our application form # Submit all the relevant documentation requested (see last paragraph of each section). # Use a black pen and print clearly when completing the form. # At the end of the form is a checklist. Complete this checklist to ensure you have supplied all the necessary information. # Note that all information submitted as evidence may be checked on the site visit. # To accredit will cost R2000.00 plus R200.00 for each course or programme submitted. # Applications will not be processed if they are incomplete and/or without fees attached. # What happens if you have already been accredited by another ETQA? Please be aware that incorrect accreditation may be equivalent to no accreditation at all. The following can serve as a guideline: # If your courses are predominantly in another field, your HR specific courses may be accredited with the SABPP ETQA through a Memorandum of Understanding with the ETQA in question # If, however, your courses are predominantly in human resources, you may wish to consider commencing with a process of de-accreditation with the first ETQA while applying to the SABPP ETQA for accreditation. Both the ETQAs must be kept fully informed in writing of the above process and there will have to be a transitional period that will keep the current accreditation valid until the new accreditation has been finalised, in order to protect the learners. The Board is part of a legally constituted structure and technical requirements must be met.
B. LAUNCH OF CROSSROADS REPORT
The opinion survey research done at the Crossroads Conferences held in Johannesburg, Durban and Cape Town has now been finalised and will shortly be made available to the public. It is interesting to note that 91.5% of all HR people have indicated that an Act for HR Practitioners is either important or very important, 93% think that HR information needs to be reported in the annual reports of listed companies and 95% agree that HR professionals should have a formal tertiary qualification and/or have been given recognition of prior learning (RPL) by an accredited institution. Keep an eye on this Newsletter for further information on when and how this Report will be made available.
C. Great interest in the proposed Act for HR practitioners
After the Crossroads Conferences the Board has been inundated with requests to visit companies to discuss the ramifications of compulsory registration. One thing has become very clear – many many thousands of HR people will have to get in line to register once such an Act has been promulgated – the best course of action is to register straight away. The special dispensation, which will allow those with HR experience but without qualifications to register at our two entry levels, HR Technician and HR Associate, will also fall away and the complete RPL route will then have to be followed. The Board would like to encourage all HR Practitioners to register while the turnaround time is still good.
================================================= 4. Andrea Vinassa Interviews Bonang Mohale, CEO of Drake & Scull Facilities Management Andrea Vinassa can be contacted at vinassa@artslink.co.za =================================================
Bonang Mohale is a black executive in corporate South Africa. It’s a tough job, but, hey, someone’s got to do it. And Mohale thrives on it. He is approachable and self-effacing, and embodies that over-worked label "achiever". Although he has had numerous opportunities to go into business for himself and to participate in a variety of BEE initiatives, he has chosen to be a "corporate animal" in the jungle that is "white business" in South Africa. This role is something of a calling, a personal social responsibility to lead the way, to shine the light on the pathway so that other black managers can follow. "There must be a role for successful black executives in white companies, in as much as there is a role for them in state-owned enterprises, BEE consortia, etc," he says, with meaningful positions adding value to the running of the organisation, not just in support functions like corporate affairs, affirmative action manager and government relations manager. The role of black managers is to transform, amongst other things, the business model, the race and gender profiles, on many levels, companies that are now required to become internationally competitive. "To me BEE comprises the many instruments we have that are transformative in nature; we are changing anything and everything about this society. That’s why it is so exciting to be living in this country. Think about it: we are changing our healthcare system, we are changing our political system, we are changing our educational system. There is nothing that we have been doing for the last 46 years that will escape the scrutiny of the South African public. "If you look at it scientifically, we have made a lot of progress. We [black people] owned less that 2% of the market capitalisation of the JSE; that went up to almost 9,7% in 1997, representing almost 40 billion African rands at the time. Of course it can be improved upon, but you experiment, you try things and you stick with the ones that work." A past president of the Black Management Forum and a board member for many years, Mohale has been working at bringing people who were previously on the fringes of the economy into the mainstream. He has also demonstrated how effective one person can be in bringing about change in big corporations. Invited by Sanlam chairman Marinus Daling and CEO Leon Vermaak to "help turn around the big juggernaut" that was Sanlam, he spent two years helping to transform it in every way. Mohale understood early on that the successful of Sanlam would have to be at least on three levels: the rational, emotional and political level. He says BEE is a planned and positive process and strategy that is aimed at transforming the socio-economic environment which has excluded PDIs, in order for these individuals to gain access to opportunities, including developmental opportunities based on suitability. "BEE is not about disadvantaging anyone; it is about accelerating the development of PDIs. It is about ensuring that the cake becomes bigger; as the cake becomes bigger all of us can partake to our satisfaction. It’s not about fighting for crumbs." But Mohale is no mere manager, he is also a leader and before talking about his leadership style, insists that you understand the difference between management and leadership: "I define leadership as creating, interpreting and articulating the future. Leadership is about showing your people the dream on top of the mountain. It’s about motivating and inspiring people. "Management is about what happens when you are there; leadership is about what happens when you are not there. Management is about effectiveness and efficiencies as you climb the corporate ladder; leadership is about making sure the ladder is leaning against the correct wall to start off with. That said, Mohale describes his management style as "very decisive, participative and consultative, but also, it’s leadership that is people-based because business is about people. The definition of leadership is getting things done through other people, with other people, for other people. Sometimes we forget the people, so whatever we do, I always want to remember the people involved. "That’s very important to me, because success is about many things. It’s about a progressive realisation of a worthy ideal; it’s about achieving embarrassingly good results at work, but ensuring that you are still married to the same person that you fell in love with when you were young. It’s also about spending time, energy and effort in the community as a moral obligation. And then, lastly, it is about ensuring that you have some sort of spirituality." Spirituality as distinct from religion and "a recognition that things happen for a reason and that all of us are interconnected". Mohale draws much of his inspiration from African, writers, autobiographies and general business books. He has recently completed two of US author Margaret Wheatley’s books - The Simpler Way and Synchronicity. He is fascinated by her use of quantum physics to explain how every small event has effect somewhere else on the planet. This has made him aware of how his actions as a manager touch the lives of many people every day. His management style, on the other hand, is very organised, very disciplined and focused on achieving results, not just a list of activities. "I’m not concerned with what people do on an hour-by-hour basis; I am interested in whether they are able to achieve that which they set themselves to do on a particular day because the best preparation for tomorrow is to do today’s work embarrassingly well." He is now at Drake & Scull FM (SA) to take the company "from good to great", in the words of John Collins, author of From Good To Great, which he was reading when he conducted this interview. "Africa is perceived as a basket case and we have to show by example, not just passionate words, that we can achieve excellence." ================================================= Share Ownership Plans By Mark Bussin and Billy de Beer who can be contacted at www.21century.co.za & mbussin@21century.co.za ================================================= In summary the employer’s tax benefits in terms of an approved scheme are: # Costs incurred by the company to set up and administer the scheme are tax deductible, # The income of the scheme is tax exempt, and # The employer is exempt from Property Transfer Tax on shares transferred to the scheme. Employees are exempt from tax on benefits arising from an approved scheme. The salient requirements of the legislation for an approved scheme are: # Eligible employees must exclude employees who work less than a minimum of # 20 hours per week in a 2-year period, and employees who work for less than a minimum of 5 months during a 2-year period. Employees must be citizens or permanent residents of Zambia in order to qualify for the tax benefits,Shares are defined as ordinary shares in a company incorporated in Zambia or elsewhere, # The option price shall not be less than the market value at the time the option is granted, # The scope of participation must be based on some or all of the following: period of service, basic emoluments, and termination of service benefits, # The employer must bear all administrative and other costs of the scheme, # The vesting period may not be restricted to less than 5 years except where termination of services or death of an employee is earlier, # The rules of the scheme may not permit the granting of credit toward exercising an option to acquire shares, and No employee may hold more than 20% of the equity. What this boils down to from an employee perspective in Zambia is that the full growth in the value of share options is tax exempt from the date of accepting a grant of share options. The position in SA is the exact opposite—the full growth is taxable. Zambian legislation also has the effect that employees are able to hold onto their shares indefinitely—contrary to SA where a proportion of shares is almost always sold at exercise to fund the due tax. Precedence for taxation incentives in this regard also exists in the United Kingdom. There are two alternatives as far as we are aware: The section 401k plan that allows employees to defer income until retirement by investing in approved savings alternatives. One of these is the purchase of shares in the employer company. Furthermore the employer can contribute additional shares on a formula basis, and Employee stock purchase plans that confer tax benefits subject to set limits. The effect of the tax legislation in both Zambia and the United Kingdom is to promote share ownership on a broad basis by ordinary citizens. Let’s follow an example to illustrate the extent of the problem in SA:
Number of share options to be issued: R500 000/R50 = 10 000 share options Value of shares at date of grant of options = 10 000 x R50 = R500 000 Value of shares at vesting date: 10 000x R80.53 = R805 300 Tax Calculation Tax due upon exercising the share options: SA: 40% x (R805 300 – R500 000) = R122 120 Zambia: Zero If the SA employee is to fund the tax payment from the sale of shares, 40% of the shares (R122 120 /(R80.53 – R50.00)) must be sold at the vesting date. The primary consideration to our minds is that any country wishing to encourage broad based economic participation by its citizens must incentivise both employers and employees to do so—and certainly can not afford to penalise such initiatives with an onerous tax burden. If SA is intent on promoting black economic empowerment--surely our tax legislation is in dire need of change. ================================================= Invitation: Participate in the 2004 HR Salary & Wage Settlement Surveys By Gary Watkins who can be contacted at radwat@global.co.za; www.workinfo.com ================================================= # Following the enormously successful 2003 HR Salary Survey, Workinfo.com in association with People Dynamics & The Graduate Institute of Management and Technology & Equity-Skills News & Views present the 2004 HUMAN RESOURCES SALARY SURVEY. The 2004 HR Salary Survey questionnaire is now online. Join us in the exciting initiative to benchmark HR salaries. The survey is anonymous and FREE to all participants. To receive the results, you need to participate! So download the 2004 HR Survey today at: http://www.workinfo.com/newsletter/survey/surveyhr.htm # 2004 Wage Negotiation Settlement Survey - with the majority of companies preparing for their annual trade union wage negotiations, the Workinfo.com Wage Negotiation Settlement Survey is an excellent resource for IR practitioners. Participate in the Wage Survey today. Download the Survey at http://www.workinfo.com/surveyir.htm ================================================= 6. Complimentary HR downloads By Jeff Sacht who can be contacted at www.equityskillsweb.com; jeffs@worldonline.co.za ================================================= # Assessment of workforce planning readiness Workforce planning readiness represents the willingness and capability of an organisation to engage in workforce planning activities. This assessment of readiness considers the commitment of the organisation's leadership, management, and employees, and the availability of expertise, time, and technology to perform workforce planning. The ability to conduct workforce planning and address workforce related issues and problems depends on the organisation's commitment of resources. An organisation's level of readiness is one of the important considerations in deciding the appropriate level of resources to devote to subsequent workforce planning steps. In addition, the level of sophistication in workforce planning should correspond to the magnitude of the workforce problems that are addressed. Click here to download the 25-item questionnaire. www.workinfo.com/free/downloads/180.htm ================================================= 7. Book Reviews # The Accidental Leader: What to Do When You’re Suddenly in Charge By Harvey Robbins and Michael Finley Jossey-Bass, 2004 To order this book click on http://www.amazon.com/exec/obidos/ASIN/0787968552/workinfo The Book You Need When You Are Unexpectedly Put in Charge It could happen today. You are called into the office, and the boss tells you that due to unforeseen circumstances, starting today you will be in charge of a team, a project, an office, a committee, or a business unit. Without any warning (or preparation on your part) you’ve become an accidental leader. If you have been thrust into a position of sudden responsibility, you need The Accidental Leader. This book is a first aid kit that gives you the information and inspiration you need to Know what you bring to the challengeyour pluses and minuses. It is filled with practical answers to the many leadership questions that you will face. # Digital Economics: How Information Technology Has Transformed Business Thinking B y Richard B. McKenzie Greenwood Publishing Group, 2003 To order this book click on http://www.amazon.com/exec/obidos/ASIN/1567206441/workinfo Time was, if we wanted the latest ‘45, we had to walk into an actual music store, pick out a real live item, and pay with cold, hard cash. Now, much of what we buy is comprised of 1’s and 0’s that we pay for electronically and download onto our PCs. What does this mean for companies’ pricing strategies and production units? When traditional goods like movies, books, and music are digitalized, economic arguments take a new turn and many public policies, from privacy to piracy, must be reexamined. That said, McKenzie concludes, "The advent of network and digital economics poses no threat to conventional microeconomic models of markets." Richard B. McKenzie is the Walter B. Gerken Professor of Enterprise and Society in the Graduate School of Management at the University of California, Irvine, where he teaches a course for MBA students on microeconomics for managers, managing organizational incentives, and digital economics. He is also a regular columnist for Investor’s Business Daily ------------------------------------ Communications Workshop ------------------------------------ ================================================= 8. Case Law & Legislation Review By Gary Watkins who can be contacted at www.workinfo.com; radwat@global.co.za ================================================= Labour Court: C828/02 Lilian Dudley v The City of Cape Town & Another: Judge Tip Source: CCMAil January 2004 Reviewed by Sarah Modise www.ccma.org.za The applicant applied for a position and was informed that she was unsuccessful. She referred a dispute to the CCMA. After conciliation, the matter remained unresolved and a certificate declaring the matter unresolved was issued. The applicant then referred the matter further to the Labour Court. Noted: The applicant contended the following: firstly, that the respondent had breached its obligations in implementing affirmative action measures by appointing someone else. Secondly, that the respondent should have implemented affirmative action measures and appointed her. Therefore, such a breach had amounted to discrimination, Thirdly, the applicant contended that the failure of the employer to appoint her, had breached her right to equality as stipulated in the Constitution and fourthly, that the failure to appoint her had amounted to an unfair labour practice in terms of item 2(1)(b) of Schedule 7 of the LRA. The respondent in reply, raised five grounds, namely:
Grounds B & C Ground A was not persisted with and grounds B & C were combined. Noted: In terms of the EEA, there is a distinction between the processes to be followed. Disputes related to chapter II of the Act (unfair discrimination) need to be referred to the CCMA and disputes related to chapter III of the Act (affirmative action) are required to be referred to the Commission for Employment Equity. Held: The Court held that in terms of the Act, nowhere was it stipulated that an individual employee could bring a dispute related to affirmative action directly to the Court. The right procedure for an individual would be to refer an alleged contravention of the Act to the Director-General and the Commission for Employment Equity. See Stoman v Minister of Safety and Security and others (2002) 23 ILJ 1010 (T) , Sheetmetal Worker’s Industrial Association v EEOC 478 US 421 (1986) and Abbott v Bargaining Council for the Motor Industry (Western Cape) (1999) 20 ILJ 330 (LC). Further held: That the applicant did not have locus standi to approach the Court directly for an order that the respondent had to prepare and implement an employment equity plan.
Ground D Noted: The applicant first pleaded his case based on alleged unfair discrimination, which was then followed by the heading "affirmative action", the last paragraph of which reverted to the allegations related to unfair discrimination. Held: It was unclear what the applicant wanted to say. The applicant needed to discretely state his case in order for the respondent to be clear on the case it had to meet. Ground E The applicant’s unfair labour practice claim was based on item 2(1)(b) of Schedule 7 of the Labour Relations Act Noted: The relevant procedures for such a dispute are governed by item 3(4)(b) which stipulates that such disputes need to be resolved through arbitration. Further Noted: S 158 (2) of the LRA stipulates, " if at any stage after a dispute has been referred to the Labour Court, it becomes apparent that the disputes ought to have been referred to arbitration, the Court may -
Held: That the Court did not have jurisdiction to preside over the matter as the other party did not consent to it. The Court upheld that the exceptions that were taken by the respondent under grounds B, C, D and E. The applicant was granted one month from the date of the order to apply for leave to amend her statement of case, or by agreement with the other party, extend the period. In the event that the applicant sought not to amend her statement within the given period, the application was to be dismissed. Costs were reserved. Case references Bargaining Council for the Motor Industry (Western Cape) (1999) 20 ILJ 330 (LC) Coetzer and Others v Minister of Safety and Security and another (2003) 2 BLLR 173 (LC) Department of Justice v CCMA & Others (2001) 11 BLLR 1229 (LC) Harmse v City of Cape Town (2003) 6 BLLR 557 (LC) Marnitz v Transnet Limited t/a Portnet (1998) 19 ILJ 1501 Sheetmetal Workers’ Industrial Association v EEOC 478 US 421 (1986) Stoman v Minister of Safety and Security and Others (2002) 23 ILJ 1010 (T) ------------------------------------ Ensure that your company has legal protection against unfair dismissal claims (actual or constructive), discrimination claims, sexual harassment, or failure to employ or promote employees or job applicants. EMPLOYERASSIST LABOUR INSURANCE PROTECTION provides your company with assessments of current labour practices, customised industrial relations manuals, telephonic access to qualified labour officials and attorneys, access to a team of qualified attorneys and labour officials for representation and consultation. For more information, visit http://www.employerassist.co.za ================================================= ------------------------------------ # DOES YOUR EMPLOYMENT EQUITY COMMITTEE DELIVER RESULTS? The DoL is on the warpath for non-compliance! Train an entire committee for the price of 1 electronic manual with full reproduction rights. http://www.workinfo.com/mall/escmt.htm
# Download the updated HUMAN RESOURCES POLICIES & PROCEDURES MANUAL. Contains pro-forma policies and procedures. Save today and buy both downloads. Available in MS Word for easy customization. http://www.workinfo.com/mall/hrm.htm # MANAGING FOR DIVERSITY WORKSHOP. New and improved version of this workshop for supervisors & managers now available! Comprehensive facilitator's guide and participant workbook is now available as a download. Train as many groups as you like for the price of 1 download! http://www.workinfo.com/mall/diversity.htm # Use the 600 page electronic manual with detailed action plans and guide notes for IMPLEMENTING EMPLOYMENT EQUITY. This is a companion piece to the EQUITY-SKILL DEVELOPMENT COMMITTEE TRAINING COURSE; http://www.workinfo.com/mall/eeim.htm =================================================* |
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